USDA calls back 2,500 workers from shutdown furlough as farmers wait for trade war bailouts

  • The U.S. Department of Agriculture announced Wednesday that it plans to temporarily reopen about half of its Farm Service Agency offices around the country and call back about 2,500 employees.
  • More than 2,100 of the FSA offices nationwide have been shuttered due to the partial government shutdown, which entered day 26 on Wednesday.
  • The FSA offices serve an important function in processing and administering crop insurance and farm loan programs as well as in administering the Trump administration's $12 billion trade mitigation relief program for farmers.
Secretary of Agriculture Sonny Perdue 
Aaron P. Bernstein | Reuters
Secretary of Agriculture Sonny Perdue 

The U.S. Department of Agriculture announced Wednesday that it plans to temporarily reopen about half of its Farm Service Agency offices around the country and call back about 2,500 employees furloughed because of the partial government shutdown.

The USDA operates more than 2,100 FSA offices and nearly half are expected reopen for at least three business days, starting Thursday.

About 800,000 total federal workers are either furloughed or working without pay during the shutdown, which started days before Christmas after President Donald Trump refused to sign any spending bills that don't include more than $5 billion in funding for his proposed southern border wall. Democrats have rejected any proposal to fund the wall.

"Until Congress sends President Trump an appropriations bill in the form that he will sign, we are doing our best to minimize the impact of the partial federal funding lapse on America's agricultural producers," USDA Secretary Sonny Perdue said in a release. "We are bringing back part of our FSA team to help producers with existing farm loans. Meanwhile, we continue to examine our legal authorities to ensure we are providing services to our customers to the greatest extent possible during the shutdown."

The shutdown comes as agricultural producers around the country are preparing to make plans for the upcoming planting season as well as considering crop insurance and credit and loan programs. The FSA offices serve an important function in processing and administering crop insurance and farm loan programs.

An unidentified USDA spokesperson responded to a CNBC inquiry Wednesday by indicating that "983 out of 2,124 FSA offices are reopening."

The nation's largest organization of farmers and ranchers applauded the USDA's announcement that it will temporarily reopen the FSA offices.

"We are delighted to hear it," said Will Rodger, director of policy communications at the American Farm Bureau Federation. "It's a good move and something our farmers need. It's particularly welcome since FSA lends to new smaller and disadvantaged farmers as well as more established farms and ranches."

Insurance and relief

Many banks require crop insurance certification that has been difficult to obtain with FSA offices closed. If crop insurance isn't available, banks usually require a different form of collateral to secure loans to agricultural producers.

According to Rodger, the shutdown has created "a fair amount of anxiety among some of our members."

The FSA also administers the so-called Market Facilitation Program, or trade relief payments to corn, cotton, dairy, hog, sorghum, soybean and wheat producers. The original deadline for agricultural producers to apply for the $12 billion trade mitigation program was Jan. 15 but it was extended last week by the USDA.

There have been two rounds of trade relief payments to farmers under the emergency aid program announced last summer by the Trump administration in response to retaliatory tariffs from China and others. Some farmers missed the first round of payments and were waiting to submit paperwork for the second round.

"We have a lot of folks who are waiting to file ... and to generally just get the payments that they deserve under the tariff mitigation program," Rodger said.

The Trump administration's farm bailout money also will go to JBS, a large Brazilian-owned meatpacker, The Washington Post reported last week. JBS, which has some operations in the U.S., will get about $5 million for selling 1.8 million pounds of pork products through a commodity program linked to the USDA's Agricultural Marketing Service.

Data and reports held up

The shutdown also has led to the USDA delaying the release of key agricultural reports, including the quarterly report on U.S. grain stocks, crop production and weekly export sales data as well as the World Agricultural Supply and Demand Estimates report.

The January WASDE report had been originally scheduled for release Jan. 11. The WASDE report can sometimes move the futures markets and is closely followed by grain traders and others, especially for supply and demand for all kinds of crops globally, including soybeans, corn and wheat.

At the same time, the lack of hard data on U.S. exports also has proved frustrating given uncertainty about trade with China.

"In a time where we're all very curious and really paying very close attention to the situation with China, we really can't tell if China is buying or not — at least not in the conventional way," said Ted Seifried, chief market strategist at Chicago-based Zaner Ag Hedge.

Siefried said there are ways of watching the Gulf Coast and Pacific Northwest markets for any soybean exports or other commodities leaving the U.S. but he explained that it's not always helpful in determining who are the buyers or quantity purchased.

"The longer this is going on, the more we're having to guess at things – and probably the room for error — is going up significantly," he said.