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Government Shutdown Impacts Farmers

Written by: Kent Thiesse

As of October 1st, 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 1995-96. As of this writing, there is still no resolution forthcoming on the Federal government shutdown.

 

The United States Department of Agriculture (USDA) was impacted by the Federal government shutdown, along with all other Federal agencies, including the USDA website, which is widely used. Most local Farm Service Agency (FSA) and Natural Resource Conservation Service (NRCS) offices were closed as of October 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 that 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 November 1, this will become more of an issue.

 

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 October 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 October 11, due to the USDA shutdown, which included 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.

 

 

LIVESTOCK  DISASTER  IN  SOUTH  DAKOTA

One of the worst natural disasters in recent times to affect livestock producers in the U.S. occurred in early October, when an extreme early season blizzard hit western South Dakota, and the surrounding States. In South Dakota alone, it is estimated that 80,000 or more beef cattle died from the blizzard. Most ranchers still had their cows and calves on Summer pastures, which remained green and lush, and had not moved cattle to the more protected areas for the Winter. The ranchers not only lost the beef cows, which are their livelihood, but lost the cash income from the 2013 calf crop, and the potential income of the 2014 calf crop. It is likely to cause severe financial distress to many ranchers and local communities in western South Dakota.

 

The Federal Government shutdown, as well as the lack of a new Farm Bill, are impacting the response to the blizzard in South Dakota. Local FSA offices usually gather data on agricultural losses, including livestock, following a severe natural disaster. This data is then used to determine if a Federal disaster declaration is appropriate. However, local FSA offices are closed, and local FSA employees are on furlough, due to the shutdown. The last Farm Bill did contain provisions for a livestock disaster program, when significant livestock and financial losses occur, such as with the South Dakota blizzard. However, as of October 1, those provisions do not exist due to the expiration of the Farm Bill extension. It is possible that provisions for these losses could be covered under a new Farm Bill, when that legislation is finalized.

 

Several private charitable entities are setting up disaster assistance and relief efforts to assist the South Dakota ranchers affected by the blizzard. Those resources are listed on the following web site :

http://beefmagazine.com/blog/5-resources-south-dakota-ranchers-hit-october-blizzard