USDA partially reopened local Farm Service Agency offices across the United States on Oct. 23, which will allow some farm-level FSA functions to resume after being shut down for over three weeks. The partial shutdown of the U.S. government began on Oct. 1, and is now the second longest in history. The longest government shutdown was in late 2018 and early 2019, and lasted 34 days.

Farmers in the Midwest have been in the middle of harvest season in recent weeks, so there has probably not been a lot of attention paid to the government shutdown to this point. Most of the federal government services through USDA that are administered through the Farm Service Agency, the Natural Resource Conservation Service, and the Risk Management Agency have been discontinued while the government shutdown is in effect.

Part of the USDA announcement on reopening FSA offices was that approximately $3 billion in scheduled farm program payments will now be paid to farm operators, which includes the 2024 Ag Risk Coverage payments that were scheduled to be paid in October. Crop producers in many portions of Minnesota, as well as in some adjoining counties in northern Iowa and eastern South Dakota, will likely receive fairly large ARC-CO payments, which are being paid to offset low commodity prices and poor corn and soybean yields in 2024. Please refer to a more complete analysis of the likely 2024 corn and soybean ARC-CO payments later in this article. The funding for the 2024 ARC-CO payments was already allocated; however, the release of these payments may be slightly delayed.

There has been no announcement by USDA regarding payments for 2023 and 2024 Supplemental Disaster Relief Program payment on applications that were submitted prior to Oct. 1, and were waiting for approval. There is also no indication when USDA might move forward with Stage II SDRP payment application process. SDRP II payments will affect crops that were not eligible for Stage I SDRP payments, as well as Stage I eligible crops that had shallow crop losses in 2024 that were above the threshold to qualify for Stage I SDRP payments.

The government shutdown has also delayed the annual rental payments for the Conservation Reserve Program that are typically sent out during October; however, it has not been announced if the 2025 CRP payments will now be released.

The reopening of FSA offices also means that producers will now be able to take out Commodity Credit Corporation marketing assistance loans at local FSA offices. The MALs are nine-month loans that could be taken out by farmers on their 2025 grain production that is now in storage. The MALs 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 will likely utilize MALs 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 MALs could also be used for payment of prepaid crop input costs for 2026.

FSA offices can only provide some limited servicing for direct and guaranteed loans and other FSA loan functions that stopped with the government shutdown on Oct. 1. 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 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. Farmers are reminded that FSA offices will have limited staff in local offices until the government shutdown ends.

The federal government shutdown has eliminated the USDA weekly crop reports, as well as the monthly crop reports, the monthly supply and demand reports, and many other regular USDA reports. The National Agricultural Statistics Service's October crop report was widely anticipated, as many farmers and marketing analysts were wondering if the USDA would 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 report that was scheduled to be released on Oct. 9 was also 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. If the government shutdown extends past Nov. 1, it may put the WASDE report scheduled for Nov. 10 in jeopardy as well.

Likely payments for corn and soybeans

Many farmers in Minnesota and adjoining areas welcome the USDA announcement that the 2024 corn and soybean ARC-CO payments will now be paid by FSA offices. USDA has announced the final market year average (MYA) prices for 2024-25, which are used to calculate 2024 farm program payments, at $4.24 per bushel for corn and $10.00 per bushel for soybeans. Based on the final 2024 MYA price of $4.24 per bushel, eligible farmers in 26 counties in Minnesota will receive the maximum ARC-CO payment for corn, farmers in 5 counties will receive two-thirds or more of the maximum payment, and farmers in 22 counties will receive a smaller ARC-CO payment.

Based on the final 2024 MYA price of $10 per bushel, eligible farmers in 23 counties in Minnesota will receive the maximum ARC-CO payment for corn, farmers in six counties will receive two-thirds or more of the maximum payment, and farmers in 26 counties will receive a smaller ARC-CO payment.

Estimated 2024 PLC and ARC-CO payments for corn and soybeans, based on the final MYA prices:
Corn: The 2024 PLC corn reference price was $4.01 per bushel, the benchmark price for ARC-CO payments was $4.85 per bushel, and the final 2024 MYA corn price was $4.24 per bushel. This is $.23 per bushel above the threshold for 2024 corn PLC payments, so there will be no 2024 PLC payments. The estimated MYA price is $.61 below the 2024 benchmark price, which will initiate 2024 ARC-CO payments in many counties with reduced corn yields in 2024. At the final 2024 MYA price, ARC-CO payments would be initiated with a final 2024 county corn yield that is about 2% below the county benchmark yield.

Soybeans: The 2024 PLC soybean reference price is $9.26 per bushel, the benchmark price for ARC-CO payments is $11.12 per bushel, and the final 2024 MYA soybean price is $10.00 per bushel. This is $.74 per bushel above the threshold for 2024 soybean PLC payments, so there will be no 2024 PLC payments. The estimated MYA price is $1.12 below the 2024 benchmark price, which will initiate 2024 ARC-CO payments in many counties with reduced soybean yields in 2024. At the final 2024 MYA price, ARC-CO payments would be initiated with a final 2024 county soybean yield that is about 5% below the county benchmark yield.