Government shutdown directly affects agriculture
When the House of Representatives and Senate failed to reach an agreement on the eve of Sept. 31 on the continuing resolution to fund the federal government for the next fiscal year, federal agencies were shut down until appropriations are restored.
A partial federal government shutdown would cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc.
With the exception of “essential” functions of government, most federal employees have been furloughed.
For agriculture, that means that U.S. Department of Agriculture, the Natural Resources Conservation Service (NRCS) and National Agriculture Statistics Service, among others, are out of business for the time being.
Despite the shutdown, there are still some federal government actions that will be available.
For example, CME Group said, “USDA graders who are integral to the cattle delivery process are still on the job, since they are fee-based and technically not government funded.”
They continue that information shortages, however, could create gaps in reporting key agricultural pricing data.
However, the cattle market is fortunate in that it has groups, such as CattleFax, that provide some price information to its members.
“For a few days a least, the Denver-based information cooperative may be about the only game in town for broad-based fed cattle and feeder cattle price data,” said CME Group. “Local feeder and stocker cattle markets are an entirely different matter, however, where we may see a significant void in the short run.”
National Cattlemen’s Beef Association (NCBA) Vice President of Government Affairs Colin Woodall said that NCBA is not yet aware of the effect that missing data could have on markets.
Reuters columnist John Kemp said, “If the U.S. government shutdown continues for more than a few days, commodity markets will find themselves flying blind, as the public servants responsible for producing statistics on which traders and investors rely are sent home.”
Woodall further clarified that Food Safety and Inspection Service inspectors will remain in packing plants, as they are deemed essential.
In a weekly NCBA interview, Woodall said he was surprised by the government shutdown, citing all that’s politically at stake for both Republicans and Democrats. Despite the immediate impacts, Woodall remained focused on the long-term issues and the letdown as Congress failed to pass a new farm bill.
Farm Bill concern
American Farm Bureau Federation President Bob Stallman notes that farmers and ranchers are frustrated with the shutdown, as key issues involving agriculture, such as immigration, waterways, the Farm Bill and tax reform, have come to a halt.
Stallman voiced his members’ concern regarding the shutdown, emphasizing the savings a settled farm bill would have on the deficit.
“Now that the 2008 Farm Bill extension has expired, farmers once again are left with uncertainty as to the safety net and risk management tools that are important in planning for next year’s crop. Come January, consumers once again face the impact of high food costs as decades-old farm policy kicks in,” Stallman said.
Iowa Farm Bureau Federation President Craig Hill commented, “I think farmers have kind of gotten tired of talking about it.”
Speaking on the lack of a new farm bill, Hill continued, “It just goes on and on and on – every month another disappointment and lack of progress. We don’t hear as much from producers as we were earlier because I think it’s just such a persistent frustration.”
National Farmers Union President Roger Johnson told House Speaker John Boehner that the Farm Bill is now in his hands.
Johnson’s letter says this is an opportunity for Boehner and the House to demonstrate that Congress is still able to get things done. With the budget and debt ceiling discussions looming, Johnson says the Farm Bill may be the very best opportunity for any major, forward-looking legislation to pass this year. He says the country’s family farmers, ranchers, fishermen, consumers and hungry citizens are depending on Boehner.
Jason Weller, chief of the NRCS, noted that NRCS activities have also been shut down.
“We understand the uncertainty that the current circumstances present for Americans that USDA serves every day, as well as our many partners around the county,” said Weller in a statement. “Except for critical activities that protect life and property, many NRCS staff will be furloughed pending reinstatement of funding by Congress.”
Those activities that are deemed essential include work on high-hazard dams and preservation of plants at Plant Materials Centers and Service areas.
Also impacting citizens is the shutdown of federal lands and national parks.
“As a result of the federal government shutdown, essentially all services provided by the Bureau of Land Management will be suspended, with the exception of law enforcement and emergency response functions,” said Wyoming BLM in a press release.
The closure of national parks is also expected to have economic impacts.
The Casper Star Tribune reported that the Cody Chamber of Commerce expects to see losses at $200,000 to $300,000 per day if the shutdown lasts more than a few days, and Jackson is predicting a loss of $4 million.
The full impacts of the action remain to be seen.