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Government shutdown affects farmers

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As of Oct. 1, the federal government officially went into a “shutdown” mode, meaning that all government services deemed as “non-essential” were temporarily discontinued. Federal offices were closed and federal employees were placed on indefinite furlough. There have been 17 federal government shutdowns since 1976, with the longest lasting 21 days in 1995-1996. As of this writing, there is still no resolution forthcoming on the federal government shutdown.

The USDA was impacted by the shutdown, along with all other federal agencies, including the USDA website, which is widely used. Most local FSA and NRCS offices were closed as of Oct. 1, and most employees were placed under furlough. USDA is continuing meat, poultry and grain inspections, and food stamp benefits under the Supplemental Nutrition Assistance Program (SNAP) are being continued. USDA describes “essential” employees as those who perform emergency work involving the safety of human life, or protection of property.

While the impact of the federal government shutdown may not be instantly noticeable to farm families, the implications become more noticeable as time goes on. Most corn, soybean and wheat farmers are scheduled to receive a direct payment in October as part of the 2013 government farm program. Even though the direct payments are guaranteed as part of the 2013 Farm Bill extension, the actual payment to farmers will not occur until the government shutdown ends and FSA offices reopen.

Similarly, many grain producers utilize CCC loans on harvested grain that is placed in on-farm storage from late fall until the following spring or summer when the grain is sold. The CCC loans are initiated through local FSA offices and will not be available until the government shutdown ends. Many farmers will be relying on the CCC loans for second-half cash rental payments for 2013, and to make prepaid crop expenses for the 2014 growing season. Certainly if the government shutdown drags beyond Nov. 1, this will become more of an issue.

 

 

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Numerous FSA loan guarantees on land, equipment, etc., were secured by farm operators with local banks and other lending institutions in the past few months, which were waiting to be processed and funded after Oct. 1, are on hold until the federal government shutdown ends. This should not affect FSA loan guarantees that were previously approved, but could cause delays by banks and other lending institutions in approving further FSA loan guarantees. NRCS staff are not available to provide technical assistance on existing conservation projects until the government shutdown ends. Conservation Reserve Program (CRP) payments for existing CRP contracts are not affected by the shutdown; however, the actual payments will be delayed until local FSA offices are reopened.

There was no USDA Crop Production and Supply/Demand Report as scheduled on Oct. 11, due to the USDA shutdown, which includes the National Agriculture Statistics Service (NASS). Grain markets have been highly volatile in recent months, reacting to the 2013 crop production estimates, and the impact of future U.S. and world grain supplies. The October USDA report was expected to give a bit clearer picture on the 2013 crop production numbers. These USDA reports not only impact grain traders, but are also useful farm operators as they make their grain marketing decisions at harvest time. The report information is also helpful to livestock producers as they determine pricing opportunities for future feed needs for their livestock.

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