The U.S. government shut down on Oct. 1 after failing to pass an appropriations bill to fund the federal government through Nov. 21. Governmental agencies have temporarily ceased operations, and federal workers are furloughed until a spending bill passes. 

While geographically away from America’s farmlands, shutting down the government has trickle-down effects that are immediately impacting ag producers. 

The U.S. Department of Agriculture’s posted shutdown plan involved furloughing nearly half of its workforce, 42,000 employees, not deemed necessary to protect life and property. Specific activities being suspended include “payment processing, disaster assistance processing, regulatory work, and surveys for high-risk plant pests and diseases for certain swine, cattle, and aquatic animal diseases,” as well as research on animal diseases.

Animal and plant health emergency programs, including the New World Screwworm, are not included in the cessation of animal disease research.

The plan also states that the majority of activities by the Risk Management Agency, Natural Resources Conservation Service, Foreign Agricultural Service, Food and Nutrition Service, National Institute of Food and Agriculture, Economic Research Service, National Agricultural Statistical Service, Rural Development, and Staff Office have halted for the duration of the shutdown.

So how does this impact you?

During the government shutdown, the following activities will be paused.

Payment and Loan Processing: Payments from the agency to farmers will be paused. All farm loan activity is halted as well, including processing and closing loans, and signing off on guaranteed loans or lines of credit. 

Disaster aid: Disaster assistance processing, including for recovery from recent weather events, has ceased. The inability to apply for this support has the potential to impact both crop and livestock farmers who have experienced severe weather and droughts over the past weeks and months.

Publishing reports: Reports, including the upcoming WASDE, will not be published during the shutdown. During the last government shutdown in 2019, Brownfield Ag News reported that over 35 days the USDA missed more than 60 reports. Already, the weekly export sales report on Oct. 2 has been delayed, resulting in less information for farmers marketing crops during harvest season.

Funding for meat and poultry inspections: According to the USDA plan, 29 states run Meat and Poultry inspection programs. States that use funding from cooperative agreements for inspection services may run out of funds for these activities. This could lead to slow inspections. 

How long will this last?

The length of the government shutdown depends on when lawmakers can come to a compromise and pass a budget resolution for the new fiscal year. 

Until the shutdown ends, be prepared for the effects of fewer government workers and information available to support farms.

While the government is shut down, the global markets are not. The longer support for farmers is low, anxiety around the current situation increases. This can lead to market volatility, impacting commodity prices.

Trader PhD is here to provide what expert insights we can to our customers during the shutdown and after it ends, as the markets react. 

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Hi! We’re Trader PhD, an Ag Marketing service located in West Des Moines, Iowa. We give commodity market advice to grain and livestock producers across the U.S. and Canada. 

With over 30 years of experience serving farmers and ranchers, our team specializes in strategic hedging and speculating in the livestock and grain markets. We offer essential tools and market insights that help agricultural professionals make informed decisions, safeguard profitability, and manage commodity marketing efficiently.

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