As of this writing, the Federal government shutdown continues, now the longest on record at 37 days and counting. In recent days, there was emerging optimism in the Senate that bipartisan discussions would soon yield a breakthrough that could lead to reopening the government and restarting the appropriations process to fund Federal departments and agencies with full-year funding bills. However, that momentum seems to be waning now, partly due to the performance of Democrat candidates in key elections this week, which may be bolstering Senate and Congressional Democrats to hold out for a stronger commitment on extending Affordable Care Act (ACA) tax credits/premium subsidies, which is the primary driver of the shutdown.
A path to reopening the government likely requires three components of a deal or agreement between both parties in both the Senate and House. The three items are:
- Agreement to extend (with modifications) ACA tax credits
- Short-term Continuing Resolution (CR) to fund the government (likely through January)
- Vote on pending appropriations package negotiated between House and Senate (includes the Agriculture-FDA funding bill, along with Military Construction-Veterans Affairs, and Legislative Branch)
If and when Congressional leadership can drive to an agreement on such a package, we should see relatively quick votes in both the Senate and House, which will require bipartisan support for passage. A key positive of this potential agreement is the full year funding of USDA and key agriculture programs, so they will not be subject to only short-term funding like much of the remainder of the Federal departments and programs.
As the shutdown has continued, USDA has been modifying its operating plans in certain areas, including now having partial staff in the county office service centers to conduct necessary activities, such as processing marketing loans, handling farm operating and ownership and loan guarantee activities, and processing ARC/PLC payments for the 2024 crop year.
USDA has also been required through legal action to utilize its contingency fund for SNAP (food nutrition benefits) to issue partial SNAP benefits for November. This will result in SNAP beneficiaries receiving approximately half or less (depending on household income) of their typical monthly benefit.
At this time, there is no clear indication when the government shutdown will end or what “action forcing” event may ultimately drive the pressure necessary to bring all sides together for a solution. The longer the shutdown lasts, the more acute the impacts will be on many Americans.
For the remainder of 2025, we expect minimal activity on the farm bill, although there remains the possibility for the House Agriculture Committee to markup their version sometime in December, though with the shutdown ongoing the markup may slip until early 2026. The Senate Agriculture Committee is not expected to act this year on the farm bill.
Also, both USDA and Congress are contemplating additional economic assistance for producers struggling with low commodity prices and continued, elevated input costs across the board. USDA and the White House continue to signal that an aid package will be announced once the government shutdown ends, while agriculture leaders in Congress have indicated there will be a need for Congress to act with additional assistance to supplement what USDA is planning. The contours of such assistance may likely track with the Emergency Commodity Assistance Program (ECAP) support that was delivered early this year for the 2024 crop.
