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Government shutdown continues to hamper ag industry

By Staff | Jan 23, 2019



United States farmers have already taken a hit from the trade war with China and are now facing additional financial strain thanks to the government shutdown that looms as the longest in U.S. history.

Chinese tariffs on U.S. ag products were imposed in response to U.S. duties enacted upon goods imported from China; these caused crop prices to drop.

Now the shutdown is wreaking havoc on the ag industry and farmers are unhappy.

Recently the U.S. Department of Agriculture offered some relief by announcing a deadline extension for farmers to apply for aid in the hopes of counterbalancing the impact of the trade war.

However, they cannot apply for loans or receive payments from the market facilitation program that’s funneled through Farm Services Agency offices, because those offices remain closed.

Certain USDA activities remain active because they are “related to law enforcement, the protection of life and property or are financed through available funding (such as through mandatory appropriations, multiyear discretionary funding, or user fees).”

During the first week of the shutdown, 62 percent of USDA employees were either exempted or excepted from shutdown activities. The longer the shutdown goes on, the more this percentage decreases, the department said.

The National Farmers Union tweeted last week that “shutdown stories are pouring into” its Farm Aid hotline.

“The cotton farmer who couldn’t get disaster assistance to recover from a hurricane,” the tweet said. “The woman in her 90s facing foreclosure on her family farm. The dairy farmer trying to renegotiate her FSA loan.”

Mark Recker farms near Arlington and serves as chair of the Iowa Corn Growers Association. He said any work that needs to be done with the FSA office is being hampered by the shutdown.

“I know guys trying to get loans and that process has stopped entirely,” Recker said. “That’s the biggest impact this shutdown is having on farmers.”

The shutdown also is frustrating farmers because all of the hard work that has gone into pushing forth legislation to better agriculture likely will have to begin again, he added.

“From a policy perspective, everything’s been put on the backburner and the focus is on resolving the shutdown,” Recker said. “But from a corn farmer’s perspective, we want to make corn into ethanol and hope to get E15 moving forward for summer usage, but that’s at risk now from the shutdown.”

Farmer Pat Swanson works as a federal crop insurance adjuster and serves as a director of the Iowa Soybean Association. She said there are concerns about signing up for the livestock disaster program through the FSA office, too.

“As a federal crop insurance agent, we don’t have the information we need to compile reports for determining regular rates or adjusted rates for high risk ground and livestock protection products, because the government is shut down,” she said. “We also need the USDA supply and demand report and not having that information is also causing the markets to struggle.”

Producers are wanting to lock in prices now and prepay for discounts, but they can’t because the information they use isn’t available, Swanson said.

“They want to determine whether to plant more corn this year or not, or look at alternative options, but we need accurate information to do that,” she said. “As farmers, we want our elected officials – the people we put in office – to resolve their issues, make the best decisions for our country, and get us back up and running again. The good thing out of all of this is that the farm bill was signed before this happened.”

Anna Johnson, policy manager of the Center for Rural Affairs, said the USDA cannot carry out their “marching orders in the new farm bill” because of the shutdown. USDA activities ranging from farm loans and farm payments to rural development loans and grants have ceased. Other halted activities include investigations of fraudulent and anti-competitive activities by packers and stockyards.

“To serve the country and do their jobs effectively, USDA employees need to be at work,” Johnson said. “Congress should pass a spending bill to reopen the government, and override any potential presidential veto.”

Katie Olthoff, director of communications for the Iowa Cattlemen’s Association, said in 2013, the government shutdown at that time impacted livestock mandatory reporting, including mandatory price reporting. The ICA has since lobbied to ensure that the mandatory price reporting would never be affected again in the event of a shutdown.

“Those reports give producers valuable information on pricing their cattle,” she said. “The January cattle on feed report and cattle inventory report are likely to be delayed, but those do not have the same impact on day-to-day operations on the farm as MPR.”

Dal Grooms, communications director for the Iowa Pork Producers Association, said most producers signed up for the MPF before the shutdown and those payments were processed within two weeks.

“The USDA was very efficient,” she said. “If there are some (producers who waited until 2019 to sign up), I’m sure they are thankful that Secretary (Sonny) Perdue has decided to provide an extension.”

Iowa Department of Agriculture and Land Stewardship Deputy Secretary of Agriculture Julie Kenney said that NRCS offices remain open across the state and while other government departments are shut down, IDALS employees are trying to fill in the gaps.

“Our team is planning a concentrated effort on conservation efforts at the NRCS, talking with landowners about conservation efforts,” Kenney said. “We’re trying to focus on the things that we find absolutely critically important and work on those in the meantime. We also receive a number of grants through the USDA and FSA, and those continue to be administered.”

USDA activities that will continue beyond Jan. 1 include:

  • Meat, poultry, and processed egg inspection services.
  • Grain and other commodity inspection, weighing, grading, and IT support services funded by user fees.
  • Inspections for import and export activities to prevent the introduction and dissemination of pests into and out of the U.S., including inspections from Hawaii and Puerto Rico to the mainland.
  • Forest Service law enforcement, emergency and natural disaster response, and national defense preparedness efforts.
  • Continuity and maintenance of some research measurements and research-related infrastructure, such as germplasm, seed storage, and greenhouses.
  • Care for animals, plants, and associated infrastructure to preserve agricultural research and to comply with the Wild Horses and Burros statute.

– Eligible households will still receive monthly Supplemental Nutrition Assistance Program (SNAP) benefits for January.

– Most other domestic nutrition assistance programs, such as the Commodity Supplemental Food Program, WIC, and the Food Distribution Program on Indian Reservations, can continue to operate at the state and local level with any funding and commodity resources that remain available. Additional federal funds will not be provided during the period of the lapse, however, deliveries of already-purchased commodities will continue.

– The Child Nutrition (CN) Programs, including School Lunch, School Breakfast, Child and Adult Care Feeding, Summer Food Service and Special Milk will continue operations into February. Meal providers are paid on a reimbursement basis 30 days after the end of the service month.

– Minimal administrative and management support, including to excepted IT systems and contracts, will be maintained to support the above activities.

– Natural Resources Conservation Service offices will remain open to support conservation technical and financial assistance (such as Environmental Quality Incentives Program and easement programs).

– Market Facilitation Program payments for producers who have already certified production with the Farm Service Agency.

– Trade mitigation purchases made by USDA’s Agricultural Marketing Service.

-Agricultural export credit and other agricultural trade development and monitoring activities.

– USDA’s Market News Service, which provides market information to the agricultural industry.

USDA activities that are not continued include:

  • USDA Farm Service Agency county offices will close at the end of business on Friday, December 28, 2018.
  • Provision of new rural development loans and grants for housing, community facilities, utilities, and businesses.
  • Recreation sites across the U.S. National Forest System, unless they are operated by external parties under a recreational special use permit, will be closed. While technically closed, many will still be physically accessible to visitors at their own risk, but without staffing at ranger stations and without access to facilities such as public restrooms.

– New timber sales.

– Most forest fuels reduction activities in and around communities.

– NASS statistics, World Agricultural Supply and Demand Estimates report, and other agricultural economic and statistical reports and projections.

– Assistance for the control of some plant and animal pests and diseases unless funded by cooperators or other non-appropriated sources.

– Research facilities except for the care for animals, plants, and associated infrastructure to preserve agricultural research.

– Provision of new grants or processing of payments for existing grants to support research, education, and extension.

– ERS Commodity Outlook Reports, Data Products, research reports, staff analysis, and projections. The ERS public website would be taken offline.

– Most departmental management, administrative and oversight functions, including civil rights, human resources, financial management, audit, investigative, legal and information technology activities.

– Mandatory audits (financial statements, FISMA, and potentially improper payments) will be suspended and may not be completed and released on the date mandated by law.

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