Farmers Carry the Burden of the 2025 Government Shutdown

Stretching into week three, the current government shutdown is forcing farmers to make business critical decisions with limited information. A federal standstill is rarely beneficial, but the timing of this particular shutdown adds extra stress to an already pressurized agricultural sector. Not only did October 1st mark the beginning of a new fiscal year for the federal government, but most of ag country is also in the middle of harvest season and waiting for supply and demand data typically provided in the World Agricultural Supply and Demand Estimates by the USDA.

Farming operations were disrupted during spring planting when growers faced uncertainty in demand dynamics amid tariff negotiations and USDA downsizing. They planted anyway, hoping for good news in biofuel markets, global trade deals, and input cost reduction efforts. Today those same farmers are out harvesting cotton, corn, soybeans, and wheat hoping supplies match demands enough for them to breakeven and that loan applications will be processed in time to keep operations running smoothly.

American ag is resilient, but can it withstand another season of unknowns, and will there be long term effects from the current shutdown?

Not Every Door is Closed Until Further Notice

If there’s one thing we learned from the previous shutdown, it's that some aspects of agriculture are too crucial to be halted indefinitely. Export inspections are still being conducted, and livestock information is still being dispersed. Banks are still doing loan work and both drought monitoring and vegetation health surveillance is underway. We know the importance of contingency plans and our food economy has built in support systems for such a time as this. Despite the fact that thousands of government workers are currently furloughed, those in charge of getting food onto the tables of consumers are still working to keep the supply chains secure.

Departments halting operations have resulted in burdens felt solely by the farmer. The USDA’s ability to approve any loan requests is paused until regular government operations resume. Farm payments have stopped for programs like CRP, ARC and PLC with 67% of government staff in these departments currently on furlough and unable to issue conservation or assistance payments. There are no flash sales happening. And, as mentioned above, the WASDE report for October has not been issued. Let’s not forget that the current Farm Bill is now expired and without funding some aspects of agriculture could revert to outdated regulations.

The Far-Reaching Effects of a Government Shutdown

In a worst-case scenario, the 2025 government shutdown is the straw to break a farm’s back. If yields are estimated to be in surplus of demand and crops are sold under what farmers need to recoup operational costs the books won’t balance. Unable to breakeven and also unable to secure any new loans to make good on outstanding notes farmers could be stuck with mounting interest payments.

Even if farm families are not forced to close up shop, they are still in a gambling situation. Should they sell crops now and take what they can get? Or is it better to wait, store what they have and hope that cash prices rise during winter months? Those decisions could come down to a farm’s ability to pay storage fees or make good on outstanding bills without harvest income.

The lapse in data collection directly affects a farmer's ability to assess risk. As part of the shutdown the Commodities Future Trading Commission is not operational. Growers are left with September's data and estimates as they consider harvest sale options for October and November. Supply could be easier to calculate considering drought information and vegetation health data is collected largely without human intervention. Demand actuality is less clear without the assistance of the USDA and the CFTC.

Supplies could be tighter than September estimates suggest due to drought which would bode well for growers. However, understanding supply dynamics is more valuable when you have a realistic perception of demand. Growers were frustrated during planting season by biofuel uncertainty and global trade shifts. Now they wonder how saturated biofuel markets are and if demand from overseas remains stable.

The longer the government shutdown continues, the more inflexible American agriculture becomes. Unfortunately, this shutdown adds an element of chaos to an already complicated year for American growers.