As the President prepared to address the nation the night of Jan. 8, at the Food Institute, our minds were squarely focused on the continuing government shutdown, and how it is affecting food producers.
The government was partially shuttered Dec. 22, 2018, with some 800,000 non-essential government workers furloughed. Once-robust websites featuring reports and press releases for FDA, CDC, EPA and USDA are now mostly barren of updates, save some verbiage indicating publication schedules will resume following the passage of a spending bill. Anecdotally, we've found that FDA food recalls are still being published and some USDA reports are being released. However, the lion's share of monthly publications have been postponed.
A Dec. 27, 2018 press release from USDA's Agricultural Marketing Service (AMS) indicated that the agency foresaw no disruptions to its current purchasing plans, but others are indicating applications for the $12 billion emergency aid package offered by USDA are on hold. The deadline to apply for that program was scheduled for Jan. 15 but may be extended. The first round of payments was made in November 2018, but it's uncertain whether a second round was processed before federal employees were furloughed, reported Milwaukee Journal Sentinel (Jan. 4).
"Farmers are waiting on that second payment because they need to start buying their seed, fertilizer and chemicals for 2019," said Michael Slattery, a Manitowoc County, WI-based grain farmer and economist for Wisconsin Farmers Union. "The earlier in the year you buy seed, the bigger the discount you get."
Oklahoma producers expected the shutdown to negatively impact the state's farmers and ranchers, according to the Oklahoma Pork Council. As USDA is offering limited statistical services during the shutdown, farmers and ranchers who use those services are finding it difficult to make planning and marketing decisions. The council noted data access is particularly important due to trade disputes limiting exports to some markets, reported The Wichita Eagle (Jan. 3).
"Livestock need to be cared for and the feed bills need to be paid," Terry Detrick, president of American Farmers and Ranchers/Oklahoma Farmers Union, said. "Expenses keep piling up. Producers operating with FSA Farm Credit loans cannot get their money in time to pay bills and are being hurt the most from this shutdown."
The delays aren't relegated to the regulatory sphere alone. The partial government shutdown is prompting the postponement of a trial accusing Smithfield Foods of creating nuisances for rural North Carolina neighbors. The court ordered the jury trial scheduled to start Jan. 8 must be postponed because jury pay couldn't be guaranteed, reported The Fresno Bee (Jan. 3).
A blog piece by Farm Aid published Jan. 3 indicated that "investigations of fraudulent and anti-competitive activities by meat and poultry processors are suspended" and that "grants and payments are no longer being processed for agricultural research and education and extension projects" under the shutdown. However, the blog piece saliently noted that implementation of the hard-won 2018 Farm Bill could also be delayed, as the rulemaking to enforce the law is under the purview of FDA, USDA and other government agencies.
While it remains to be seen how long the government shutdown will last, in the short-term, it seems farmers are bracing for the worst as 2019 begins.
[EDITOR'S NOTE: The following items were added Jan. 9 following updated information on two USDA programs.]
USDA developed a plan to provide full benefits for SNAP participants in February, with plans to issue the month's benefits earlier than usual. The agency noted SNAP benefits were fully funded for January prior to the expiration of USDA's funding Dec. 21, 2018.
Meanwhile, USDA will extend the deadline to apply for payments under the Market Facilitation Program by one day for each day Farm Service Agency (FSA) offices are closed under the government shutdown. Applications were originally due Jan. 15, but FSA closed Dec. 28 after running out of funding, reported WTVR.com (Jan. 8).
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Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
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