How is the government shutdown impacting the food industry?
- As the government shutdown enters its third week, farmers, producers and the market are expected to feel added pressure as the U.S. Department of Agriculture delays publishing several reports they rely on to make decisions, Bloomberg reported.
- These reports — on supply-and-demand estimates, grain stockpiles and winter-wheat seedings and crop-export sales, among others — will eventually be released, but it will take time to gather and analyze the data after the shutdown ends, USDA Chief Economist Robert Johansson told Bloomberg.
- Shutdown-related squeezes could hit other USDA and Food and Drug Administration policies, programs and services, according to Food Ingredients First. USDA food safety inspectors who look for problems that may lead to an outbreak are working without pay while their counterparts at FDA are working on a limited basis, which hampers prevention of foodborne illness outbreaks, Business Insider reported.
The timing of this latest government shutdown is particularly bad for farmers and other food producers who need to make decisions about what to plant, process and market, and how much and when. They will have to wait until USDA gets back to collecting the information they need — assuming the shutdown comes to an end fairly soon.
Even after the shutdown ends, however, farm producers and others in the food industry could feel a longer-term impact as the supply chain potentially crimps from insufficient production. The result could be more reliance on exports at a time when tariff disputes and trade agreements leaving out the U.S. have already put products at a relative disadvantage and hiked the value of certain foreign foods and beverages.
And that's not the only potential problem. Without access to timely export sales data from the government, the U.S. market may need to depend on information that's hard to confirm and even just rumors, Bloomberg noted. There could also be detrimental lag times between farm operations applying for USDA loans and getting short-term relief from U.S.-China trade tensions, which could spell serious problems in covering expenses for this production year.
Some offices and programs within the FDA and the USDA are remaining open during the shutdown, but many on the district level have closed, putting a temporary stop to facility inspections, according to Food Ingredients First. The FDA is maintaining core public health programs that are deemed essential and will respond to emergencies involving outbreaks and product recalls, but the agency cannot accept user or regulatory fees without congressional action, the site reported. About 40% of the FDA's staff is furloughed, Kaiser Health News said.
Food-safety inspections are continuing for USDA's Food Safety Inspection Service — which regulates meat, poultry and eggs — but inspectors aren't being paid during the shutdown, Business Insider noted. The FDA is completing limited inspections of imported foods, but most of its food-inspection operations are on hiatus.
The situation is a serious gamble since foodborne outbreaks can happen at any time and any place. While the FDA will no doubt spring to action for recall and other enforcement purposes when it is needed, the regular inspection duties that help to limit those outbreaks aren't at full operational efficiency. On the plus side, staff at the Centers for Disease Control and Prevention are on duty because its parent agency — the Department of Health and Human Services — has already been funded through September.
It's not clear how long this current shutdown will last since President Trump has tied a resolution to congressional approval for his U.S.-Mexico border wall, which the Democrats have been unwilling to fund. It's already the third-longest such shutdown in recent times, according to Business Insider, with 11 of 20 previous federal government shutdowns or funding lapses since 1974 going five days or fewer and seven lasting three days or fewer. And when the shutdown does end, it's anyone's guess how long it will take food-related functions to ramp back up.
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