October 1 marks the start of the Federal government’s new fiscal year, and as has become the norm in recent years, Congress did not complete any of the 12 appropriations (funding) bills for fiscal year 2026 that began the first of October. The House did pass a short-term funding bill (Continuing Resolution or CR) in September that would fund all of the government operations at current levels until November 21, allowing additional time to complete the full year funding bills. As of this writing, the Senate has been unable to pass the CR, which requires 60 votes and thus far only 3 Democrat Senators have voted with Republicans in support of the CR, so they are at least 4 votes short of the 60-vote threshold. Most Senate and House Democrats are withholding their support for the CR over the issue of expiring, Covid-era health insurance premium subsidies for the Affordable Care Act. There is a push by Congressional Democrats to extend these enhanced premium subsidies that are set to expire the end of this year.
The government shutdown has a variable impact across Federal programs and employees in Federal agencies. For USDA, almost half of all employees have been furloughed and USDA county office service centers are generally closed for most business and transactions with producers except for select loan servicing to protect the security of collateral.
While many of the USDA farm and conservation programs are funded with mandatory spending that was approved in the One, Big Beautiful Bill Act earlier this year that extended and enhanced many Farm Bill safety net programs, the shutdown means USDA staff are not in place to administer the programs and process the applications, etc. Here is a top line summary of the key USDA programs that are and are not impacted by the current shutdown:
- Final 14 percent payment under Emergency Commodity Assistance Program (ECAP) has already been issued and is not impacted
- Crop insurance is not impacted
- ARC/PLC payments on the 2024 crop that are due to be paid in October will not be paid until USDA reopens
- Marketing assistance loan activity is stopped and USDA cannot issue any new marketing loans nor can commodities under loan be redeemed during the shutdown
- Delayed rollout and sign-up for the Supplemental Disaster Relief Program (SDRP) Stage 2
- Emergency Livestock Relief Program (ELRP) applications are not being accepted or processed
- Generally, programs and services that are funded by user fees can continue to operate, such as grain inspection and cotton classing, along with activities to protect animal health through the Animal and Plant Health Inspection Service (APHIS)
At this time, there is no clear indication when the shutdown will end as both sides seem deeply entrenched in their positions. However, the longer it drags on, the more public and political pressure both sides will face to find a solution. One trigger point may be mid-October when military service members and Federal workers will not be paid according to the pay schedule.
