WOOSTER, Ohio — The government shutdown of 2013 may seem like an out-of-sight, out-of-mind issue for most farmers in Ohio and Pennsylvania. After all, no farms have been able to shut down. Crops are ready to harvest and livestock need fed and cared for every day — no matter what happens in Washington.
However, the longer the shutdown drags on, the more likely farmers and rural America will bear some of the consequences of a stalled government.
Now in its second week, the shutdown has resulted in at least a partial closure of government websites like the U.S. Department of Agriculture, Natural Resources Conservation Service and the Environmental Protection Agency.
Missing information
And it’s not just websites that are down; so is information like the U.S. crop yield report and weekly progress statistics for each state.
Mike Mock, senior risk manager for The Andersons, said the problem is there’s no transparency and no certainty. The latest USDA yield report was scheduled to be released Oct. 11, but with the shutdown in place, it’s unclear if or when that report may become available.
Farmers can measure their own yields, but they need a universal set of data to make sound market decisions, especially when trading.
“We’re right in the middle of harvest,” Mock said. “It’s important for the trade to get a sense of how many acres have been harvested and how many acres have not been touched yet.”
Monthly reports
Reports are released each month during harvest and typically become more accurate as the harvest nears completion. Missing just one report could mean a whole month of speculation and estimates.
Another issue, Mock said, is farmers and commodity brokers don’t have export data, so they don’t know how much grain is being sold to other countries — a huge marketplace influence.
He said overall trade volume for grains also is down, something that’s been seen in other markets, as well, including the Dow Jones Industrial Average.
No direction
Ralph Wince, grain merchandiser with Agland Co-op of Canfield, said the market simply “doesn’t have a direction.”
He said the shutdown may not have a huge daily impact, but if the country goes into November without its government back open and without a crop report, the effects will likely worsen.
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He believes corn yields across the country are better than first forecast, but without the data, it’s hard to be certain.
“The trade has to have something to focus on,” he said.
He doesn’t expect it will affect farmer’s storage plans much, especially for corn. They faced low prices of about $4 a bushel long before the shutdown, and many already planned to wait for better prices, Wince said.
Looking ahead
As for the 2014 planting season — those decisions are still a few weeks to a few months away.
The Chicago Board of Trade says trading will continue during the shutdown, but that it is “possible that a prolonged shutdown of the federal government could impact our CME livestock and dairy markets.”
As for dairy, the USDA’s Agricultural Marketing Service has not released class and component dairy prices.
However, the CBOT says it is “currently our understanding that going forward the Upper Midwest Federal Order will continue to release both the weekly and monthly prices as scheduled. Therefore, it is our intention that the final settlement of the Chicago Mercantile Exchange milk (Class III & Class IV), cheese, butter, whey and nonfat dry milk futures and options contracts will occur on Wed., Oct. 30, as scheduled.”
Loaning money
There also is some concern about getting farm loans and farm credit during the shutdown.
Randy Barbee, director of communications for Farm Credit Mid-America, said their customers continue to have access to credit as usual, because the company’s loans are not funded by the government.
However, she added, the shutdown could delay government services like crop insurance claim processing and the issuing of Farm Service Agency loan guarantees.
Delays likely
A lot could change in the next few days, but if it doesn’t, the consequences keep getting worse. Even if the government were to suddenly re-open, it’s unclear how long it might take to release crop data, or whether the data would still be current.
