WASHINGTON D.C. (RFD-TV) — The government shutdown started 19 days ago, and the impact on agriculture is beginning to cascade on producers across the sector -- from the ongoing disputes over trade with China to halted relief payments promised to struggling producers that will not be delivered until the shutdown ends.
Senator Cindy Hyde-Smith (R-MS) said that she is unsure how much longer farmers can wait for help from Washington.
“American agriculture is in serious trouble, and Congress must act now with short-term assistance,” Sen. Hyde-Smith said. “Without immediate action, we risk losing not only farms, but also the rural communities and the food security they provide. This is no longer a warning. It’s an emergency. Even with strong crop yields this year, many farmers are facing a loss of between $100 and $400 per acre.”
Sen. Hyde-Smith tells us that new price support levels passed by Congress will help, but also will not kick in until next year. She reminds her colleagues at Congress that farmers are counting on them to come together and “meet the moment.”
American Farm Bureau Federation (AFBF) President Zippy Duvall agreed with Hyde-Smith, saying farmers need a lifeline right now. However, he noted that any relief will only be a “band-aid” to the real problem.
“While emergency aid will help temporarily ease the burden facing farmers, only long-term solutions will improve economic conditions in rural America,” Duval said. “That includes fair trade agreements, year-round renewable fuels, and protecting interstate commerce, just to name a few.”
On the renewable fuels side, just a couple of months ago, lawmakers filed the “Ethanol for America Act.” It would require the EPA to finalize long-delayed rules, make E-15 labeling clearer, and confirm it is safe for use with existing fuel equipment. Supporters say the move could cut gas prices by up to 30 cents a gallon and expand markets for U.S. farmers.
However, without movement on ethanol or soybean deals with major international players like China, farmers are facing record hauls and increasing issues with grain storage. AFBF economist Bernt Nelson said they are closely watching grain storage levels, warning that a lack of space can play a big role in prices.
“The increase in crop size with limited increase in demand or storage space could continue putting some pressure on our crop prices,” Bernt Nelson told RFD-TV News on Friday. “It also could have a big impact on basis. A weakening basis would really add a significant price risk to the farm sector on the bottom line.”
This year’s corn crop is projected to be a record 16.8 billion bushels. Nelson said that grain storage levels across farm country have largely held steady in recent years, while harvest levels continue to rise.
Dairy Industry: Shutdown is Another Bump in the Road
The government shutdown has touched nearly every sector of the ag industry since it began, and now impacts are spilling over into dairy. Chris Galen with the National Milk Producers Federation (NMPF) says the increasing murkiness in market transparency and overall economics is just another bump in the road this year.
“Prices have been really decent this year, but certain commodities like butter have really dropped. Cheese has dropped to an extent, but not to the same degree as butter,” Galen explained. “So, we’re looking at some headwinds here, and part of it is the tariff situation, particularly when it comes to China and our exports there. Part of it is just the economy, and a lot of it is production. One of the reasons why butter has dropped as much as it has is that the amount of butter fat coming out of our cows has just grown by leaps and bounds in the past decade.”
Galen warns that if the government shutdown carries on, it could make the marketplace more volatile, largely because reports are on pause and they do not have any solid information around supply and demand.
Shaun Haney joined RFD News to discuss the potential impact of the Trump-Xi summit uncertainty, ongoing agricultural trade talks, and why geopolitical developments could carry important implications for farmers and global commodity markets.
