Extened Government Shutdown Could Impact Farmers

A partial shutdown of the U.S. government began on October 1, with no indications regarding how long that shutdown may last. Most farmers in the Midwest are in the middle of harvest season, so there has probably not been a lot of attention paid to the government shutdown to this point. However, if the shutdown continues for several more weeks it could start to impact financial decisions for farmers and ag lenders. Approximately half of the nearly 86,000 USDA employees have been furloughed (placed on leave) and most local FSA offices are closed until the shutdown ends. Most of the remaining USDA employees are considered “essential,” related to ongoing food and nutrition programs and inspection services for food and agriculture. The second phase of the Economic Commodity Assistance Program (ECAP) payments were made to eligible farmers prior to the shutdown; however, most other USDA farm-related program payments will be halted during the government shutdown.
 
Most of the federal government services through USDA that are administered through the Farm Service Agency (FSA), the Natural Resource Conservation Service (NRCS), and the Risk Management Agency (RMA) will be discontinued while the government shutdown is in effect. The shutdown also impacts programs and the release of funding through USDA Rural Development and other USDA agencies. In addition, the government shutdown will delay or cancel important reports that are regularly released by the National Agriculture Statistics Service (NASS) and the Economic Research Service (ERS).
 
Farm operators in many portions of Minnesota, as well as in some adjoining counties in northern Iowa and eastern South Dakota are expecting to receive 2024 Ag Risk Coverage (ARC-CO) farm program payments in October. The ARC-CO payment are being paid to offset low commodity prices and poor corn and soybean yields in 2024. Farmers in several southern and central Minnesota counties are expecting 2024 ARC-CO payments of $75-$85 per corn base acre and $45-$50 per soybean base acre. The ARC-CO payments will not be released and paid during the duration of the federal government shutdown; however, the payments are guaranteed and will be paid at some point. The shutdown will also delay the annual rental payments for 10-15 year Conservation Reserve Program (CRP) that are usually sent out during October. Farmers waiting for approval of 2023 and 2024 disaster assistance payments or other government payments will also see delays in those payments during the shutdown.
 
The government shutdown also means that producers will not be able to take out Commodity Credit Corporation (CCC) marketing assistance loans (MAL’s) at local FSA offices until the shutdown ends. The MAL’s are 9-month loans that would be taken out by a farmer after harvest on 2025 grain production that is in storage. The MAL’s allow crop producers to receive partial value for their grain following harvest for cash flow purposes, while maintaining marketing flexibility into the following Spring or Summer. This is especially important in a year such as 2025, when farmers are facing very low corn and soybean prices and quite wide basis levels in many areas of the Midwest. Many farm operators would likely utilize MAL’s for short-term financing after harvest to finish paying any remaining 2025 crop expenses, second half land rental payments, and the pay year-end real estate and term loan payments. The MAL’s could also be used for payment of prepaid crop input costs for 2026.
 
Many ag lenders utilize FSA direct and guaranteed loans as financial tools for providing financing to farm operations. FSA loan guarantees become extremely important during periods of reduced farm income and low profit margins in crop farming, such as currently exist in many areas. The government shutdown will likely slow the FSA loan approval process, and if the shutdown continues, it could result in difficulties for some farm operators being able to finalize their 2026 farm operating loans on a timely basis. The FSA direct loans are especially important to younger farmers and those with less than 10 years of experience, who may have difficulty getting financing through traditional lenders. The direct loans typically provide longer term loans at lower interest rates to producers for land purchases and other capital improvements. An extended shutdown could delay the FSA loan approval process to a point where some farmers might miss out on a land purchase opportunity. 
 
The federal government shutdown will likely delay or eliminate the USDA weekly crop reports, the October monthly crop report, as well as the October supply and demand report. The National Agricultural Statistics Service (NASS) October crop report was being widely anticipated, as many farmers and marketing analysts are wondering if USDA will lower the estimated 2025 corn and soybean yields, which could help improve the current low market prices. The monthly World Agricultural Supply and Demand Estimates (WASDE) report was scheduled to be released on October 9, but will also likely be delayed or eliminated. The WASDE reports include updated grain usage and export estimates for U.S. grain supplies, as well as projections for farm-level grain prices for the current marketing year. These reports can be very useful to crop producers, livestock producers, processors, and others, as they are making marketing decisions, doing cash flow projections, and planning ahead for the coming year.
 
Since 1976, there have been 21 shutdowns of the federal government, though most have been quite short. The longest shutdown was in late 2018 and early 2019, and lasted 34 days. As of this writing, there is no compromise on the horizon that would end the government shutdown; however, government services could be restored and FSA offices reopened quickly once the shutdown ends. Most farmers and ag lenders are hoping for a timely solution to the government shutdown to avoid serious challenges following the harvest season.
 
September 30 USDA Grain Stocks Report Summary
The September 30th USDA Grain Stocks Report was released prior to the government shutdown, and it surprised most grain marketing analysts. The biggest surprise in the September Report was the estimated total U.S. corn stocks at 1.53 billion bushels, which was nearly 200 million bushels higher than the pre-report estimates. The total 2025 corn stocks compared to 1.76 billion bushels in the September report a year ago. USDA estimated that just over 643 million bushels of corn was stored on farms as of September 1 this year, which was a decrease of 137 million bushels or 18 percent from a year ago. The increase in 2024-25 corn ending stocks will now transfer to beginning corn stocks on the 2025-26 USDA balance sheet. This could potentially impact corn market price increases, if USDA reduces the estimated U.S. national corn yield in future months.
 
The latest report implies total corn usage for feed, ethanol, exports, etc., from July 1 to September 30 this year at 3.11 billion bushels, which was down slightly from 3.23 billion bushels during that same period a year ago. In addition, USDA adjusted the final 2024 U.S. corn production totals upward by 25 million bushels from previous estimates, based on adjustments in the final 2024 U.S. corn acreage and average yield. The CBOT December corn futures closing price on 9-30-25 was $4.15 per bushel, compared to similar CBOT corn prices on September 30 of $4.32 in 2024, $4.76 in 2023, $6.17 in 2022, $5.37 in 2021, $3.79 in 2020, and $3.88 in 2019.
 
The USDA soybean stocks estimate was 316.5 million bushels as of September 1, which was down about 8 percent from the U.S. soybean inventory of just over 342.5 million bushels a year ago on September 1. It was estimated that 91.5 million bushels of soybeans were stored on farms as of 9-01-25, which represented approximately 29 percent of the total stocks. The “on-farm” soybean inventory is about 18 percent lower than a year ago at this time; however, soybean basis levels in late Summer and early Fall at many grain elevators and processing plants in the Upper Midwest have remained quite wide due to poor soybean export demand.
 
The projected soybean usage of 691 million bushels for processing, exports, etc. from July 1 to September 30 in 2025 represented about a 10 percent increase from the soybean usage during the same period in 2024. However, the 2025 estimated soybean use level is still well below the usage level of 858 million bushels during that same period as recently as 2020. There was very limited soybean market reaction to the latest USDA grain stocks report due to the ongoing over the lack of soybean export sales to China. The CBOT November soybean futures price closed at $10.02 per bushel on September 30, compared to late September soybean prices of $10.37 per bushel in 2024, $12.75 per bushel in 2023, $13.66 in 2022, $12.56 in 2021, $10.23 in 2020, and $9.06 in 2019.  
 
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For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone --- (507) 381-7960; E-mail --- [email protected]