Impact of US govt. shut-down on nation’s agri-industry

03-10-2013 | |
Impact of US govt. shut-down on nation’s agri-industry

On October 1st, the US federal government shut down and will remain closed until Congress can reach an agreement on how to fund day-to-day operations. But in the meantime how will this impact US agricultural operations at home and abroad.

The statistical reports produced by US Department of Agriculture (USDA) will cease during the shut-down, leaving traders and food producers in the dark about most activities in the world’s largest farm exporter.

A major blow will be if the shut-down continues and the release of the monthly crop estimates (due October 11) have to be delayed. This report impacts the corn, soybean, wheat and cotton markets to the tune of billions of dollars.

“If you don’t have the October crop report, that’s really the big one.” said Dan Basse president of AgResource Co.

Export reports will also be suspended, which in turn will impact market fluctuations .

Also affected, is the Food and Drug Administration, which will be unable to support the majority of its food safety, nutrition, and cosmetics activities. The agency has ceased safety activities such as routine establishment inspections, some compliance and enforcement activities, monitoring of imports, notification programmes (eg, food contact substances, infant formula), and the majority of the laboratory research necessary to inform public health decision-making.

However not all operations will be impeded services inspections will continue on meat and poultry facilities to ensure the nation’s commercial supply of meat and poultry products. If this was not the case it could have shut down the entire US meat industry as by law it cannot operate without USDA inspectors to assure safety.

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