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October 7, 2013

Shutdown spawns vacuum in farm market information

WICHITA, Kan. — When Tim Peterson finished planting his 900 acres of winter wheat last week, the usually market-savvy Kansas farmer unexpectedly found himself struggling to make critical marketing decisions without being able to access to vital agricultural reports, casualties of the federal government shutdown.

“We have no clue what is going on in the market,” said Peterson, who farms near Monument in northwest Kansas. He typically protects his investment in seed and fertilizer by “locking in” the price his wheat crop will fetch next July with a futures contract that shields farmers from market fluctuations by guaranteeing a price while the crop is in the ground.

Farmers and livestock producers use the reports put out by the National Agriculture Statistics Service to make decisions — such as how to price crops, which commodities to grow and when to sell them — as well as track cattle auction prices. Not only has the NASS stopped putting out new reports about demand and supply, exports and prices, but all websites with past information have been taken down.

“It is causing a direct void in information that is immediate,” Peterson said.

This worries him far more than his other problem: When will his $20,000 subsidy check from the government, which usually comes in October, arrive?

Since the U.S. Agriculture Department’s local farm services offices also have been shuttered, farmers can’t apply for new loans, sign up acreages for government programs or receive government checks for programs they’re already enrolled in. And at a time when researchers who are seeking new wheat varieties and plant traits should be planting experimental plots, all work has ground to a halt.

Kansas Farmer’s Union president Donn Teske, a grower in the northeast Kansas town of Wheaton, worried about payments he’s owed for idling some environmentally sensitive land under the Conservation Reserve Program.

“I always look forward to that check coming in the mail,” the 58-year-old said.

But all of that, farmers say, pales in comparison to the lack of agriculture reports, because farmers today depend far more on global marketplaces than government payouts.

The reports, for instance, can alert them to shortfalls in overseas markets or if there’s a wide swing in acres planted, both of which would prompt U.S. growers to plant extra crops to meet those demands or hang on to a harvest longer to get a better price.

“That information is worth a lot of money, a lot more than $20,000 a year,” Peterson said, a reference to his subsidy.

Major commodity players can pay for crop size estimates usually provided in the NASS reports from “private sources,” said Dalton Henry, director of governmental affairs for the industry group Kansas Wheat. “Producers aren’t going to have that same luxury,” he said.

During the shutdown, the USDA won’t provide sales reports from Oklahoma livestock auctions that are used to help set prices on the Chicago Mercantile Exchange, state Department of Agriculture employee Jack Carson said.

“We are working. They are not,” Carson said.

Another ripple effect is that farmers may see a delay in checks they’re owed from federal support programs, said Wisconsin agriculture secretary Ben Brancel.

Brancel also noted that his office heard from a farmer on the first day of the shutdown who had received a check for a cow he sold, but because he had a Farm Service Agency loan, he couldn’t cash it without obtaining a signature from an FSA official.

“Our advice to him was he was going to have to wait, that there wasn’t anything he could do about it,” he said.

The shutdown came just as the current farm bill expired. Farm subsidies remain intact for fall crops currently being harvested. Crop insurance, funded under a permanent authorization, is mostly unaffected.

The expiration of the law won’t have an impact until the end of the year, when some dairy supports end and milk prices are expected to rise sharply.

Congress has been debating the new farm bill for more than two years, but a resolution has likely taken a back seat.

“Farmers, all of those impacted, have been waiting and waiting and waiting. And frankly have had enough,” said Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., last week. “They want this to get done.”

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