Ag Feels Immediate Impact of Shutdown

USDA offices close as ag groups wonder how long shutdown will last

Published on: Oct 2, 2013

There was certainly no shortage of negative reaction Tuesday morning as Americans – and ag stakeholders – awoke to news that legislators had failed to reach a budget agreement that would fund government activities for the next fiscal year.

Many in the ag industry consider the latest impasse just part of a "double whammy" of sorts, comprising a second government foible following continuing, yet rather messy farm bill negotiations.

Where the legislature will go from here is uncertain, but those in the ag industry are already bracing for the effects of missed opportunities for the now-expired farm bill, and the elimination of government funding for what are considered "non-essential" services.

USDA offices close as ag groups wonder how long shutdown will last.
USDA offices close as ag groups wonder how long shutdown will last.

Noticeable immediately Tuesday morning for many who regularly access government data was the absence of many government websites – and government employees. USDA, for example, was allowed to keep operational services considered "essential," like food inspections.

"We have heard and received confirmation that food inspectors will stay on the job, so packing plants will continue to operate, which is good," Colin Woodall, Vice President of Government Affairs for the National Cattlemen's Association, said.

"On the other hand, though, we have heard that mandatory price reporting will no longer be maintained during a government shutdown. So that starts to bring into question what's going to happen with cattle pricing mechanisms. What could this mean to the marketplace? We don't have a good handle on that yet."

To that end, the CME Group Tuesday issued a statement to its customers, noting that a prolonged shutdown could impact market settlement procedures of dairy and livestock products due to a lack of Agricultural Marketing Service data.

Specifically, CME estimates September 2013 Class III Milk, Class IV Milk, Butter, Whey, Cheese and Non-Fat Dry Milk futures and options, as well as October 2013 Lean Hogs, Live Cattle and Feeder Cattle futures and options will be affected.

Also in the lurch during the shutdown are Farm Service Agency and Risk Management Agency offices and employees, whose absence American Soybean Association President Danny Murphy said would be "painfully apparent."

As far as further producer impacts, Woodall said it's a wait-and-see issue. "I think we'll have to see just how long this shutdown stays in place and really try to get some good feedback from the countryside," he said.

Though some speculate that the shutdown will continue for at least several days, political news outlet The Hill reports that House leaders Tuesday convened a closed-door meeting in effort to negotiate funding provisions for the National Park Service, Department of Veterans Affairs and operations for the District of Columbia.