Grain News


NGFA: What The End of The Government Shutdown Means For Grain, Feed, and Processing Industries

Date Posted: October 21, 2013

This article is reprinted by permission from the NGFA Newsletter, Volume 65, Number 20, Oct. 18, 2013.

The 17-day-old government shutdown has come to a close.

In the early morning hours of Oct. 17, President Obama signed the bill that originated as a deal struck by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky.

Later that day, federal employees were back on the job.

Information is provided below to help wade through the deal, and what it means in terms of resumption of services for the grain, feed and processing industry.

 What was the deal that was struck that allowed the government to get back up and running and avoid the debt-limit default?

A: Despite the efforts by many of the most conservative Republicans to force particular changes or outright defunding of Obamacare through the government shutdown, the deal does not include any significant changes to the President’s signature health care legislation.

For many Democrats, the goal was to fund the government and raise the debt-limit on the federal government’s ability to borrow money until well into 2014, if not through all of the 2014 fiscal year. But that did not happen either.

In the end, the agreed-upon deal will fund the federal government through Jan. 15, 2014, and will raise the borrowing limit through Feb. 7, 2014.

The bill also sets up another round of budget negotiations that must be hammered out by Dec. 13.

The bill also will deliver back pay to federal workers who were furloughed by the shutdown.

There is one Obamacare-related component to the legislation that requires a study of income verification for people seeking health insurance subsidies, a small victory for Obamacare opponents.

 When will U.S. Department of Agriculture (USDA) statistical reports resume?

A: USDA announced the cancellation of the National Agricultural Statistics Service’s (NASS’s) Production and Cotton Ginnings reports and the World Agricultural Outlook Board’s World Agricultural Supply and Demand Estimates (WASDE) that were scheduled for Oct. 11.

The next scheduled release for these reports is Nov. 8. Additionally, NASS’s Crop Progress reports scheduled Oct. 7 and Oct. 15 are cancelled.

NASS’s Cattle on Feed and Peanut Prices reports scheduled for October 18th are postponed.

The resumption of the daily and weekly export sales reports was unknown at the time of publication for this newsletter.

 Now that furloughed Congressional staff members are back on the job, what will be on top of the legislative agenda?

A: Congressional sources are saying the Water Resources Reform and Development Act (WRRDA) will come to the House floor next week.

That’s the bill that would authorize – but currently not fund – renovation of inland waterway locks and provide for dredging at harbors and ports.

It also appears Secretary of Agriculture Tom Vilsack may go before the Senate Agriculture Committee to discuss biofuels, a hearing that had been planned for earlier in October until the shutdown occurred.

 When will USDA’s Farm Service Agency (FSA) county offices be fully operational to remove liens on two-party checks to farmers and perform other duties?

A: FSA county offices opened no Oct 17, and officials told the NGFA that they will be fully operational by Monday (Oct. 21) at the latest.

FSA said ramp-up time is needed to get computer and other operating systems back on line and functioning before marketing assistance loan transactions can be processed.

All county offices were closed during the government shutdown, with only 70 employees retained – about 1/2 percent of its work force.

How long will it take USDA to clear the backlog of emergency and temporary storage applications? What if I need to expedite approval for my facility given harvest volumes?

A: FSA’s Kansas City Commodity Office (KCCO) told the NGFA that as of Oct. 1, when the federal government shutdown began, it had about 95 million bushels of emergency storage (ground pile) applications pending.

They project that number probably doubled during the two-week shutdown.

FSA is putting a high priority on processing emergency storage applications, and told the NGFA it hopes to review and complete all pending applications within a week.

In fact, when it became clear on Oct. 16 that legislation to reopen the federal government would be enacted, FSA authorized two KCCO employees to return to work before the official reopening of the government to begin work processing emergency storage applications.

USDA’s emergency and temporary storage rules apply to federally licensed warehouses operating under the U.S. Warehouse Act.

For state-licensed warehouses, including those holding Uniform Grain and Rice Storage Agreement (UGRSA) contracts with USDA, it is the state licensing authority (if one exists) that determines whether and under what conditions facilities are allowed to use emergency and temporary storage.

Importantly, federal warehouse operators needing expedited action on their emergency storage applications because their permanent storage capacity is nearing full utilization may contact Tim Mehl, chief of the Warehouse License and Examination Division at FSA’s KCCO at timothy.mehl@kcc.usda.gov. In the request, indicate the date you anticipate needing to utilize emergency storage so your request may be prioritized.

Otherwise, emergency storage applications are being handled on a firstcome, first-served basis.

FSA said it is giving priority to reviewing emergency storage applications over temporary storage applications.

Routine requests for emergency or temporary storage should be sent to: Larry Cahow at the FSA Licensing Branch at larry.cahow@kcc.usda.gov or by fax to 816-926-1774.

FSA reports that as of Sept. 30, it had approved applications for 132.5 million bushels of emergency storage and 510 million bushels of temporary storage thus far for the 2013 harvest season.

It is important to stress that FSA requires pre-approval of emergency and temporary storage before such space is actually utilized under the warehouse operator’s license. Otherwise, on a warehouse examination, the warehouse operator is not credited for grain stored in such unauthorized space when calculating its storage obligations, and must have sufficient company-owned grain on hand to cover those obligations.

More details on rules governing emergency and temporary storage were published in the Sept. 6 edition of the NGFA Newsletter.

 What Food and Drug Administration (FDA) proposed regulations were in the cue when the government shutdown occurred? What’s the timing for FDA issuing those rules?

A: For NGFA members, probably the most important FDA regulatory proposal that was pending at the time the government shut down were the proposed rules implementing the animal feed and pet food provisions of the Food Safety Modernization Act (FSMA).

FDA officials told NGFA that they anticipate the proposed feed/pet food rules will be issued within a week, and will be open for comment for 120 days.

Separately, the NGFA on Oct. 14 submitted a request to FDA to extend the comment period on two other FSMA-related proposed rules important to the grain, feed and processing industries.

Those involve FDA’s rules requiring importers to verify the safety of products imported from foreign suppliers and the procedures FDA will use to accredit thirdparties to verify the safety of imported products.

NGFA requested that the current Nov. 26 comment deadline on those two rules be extended so that they end 120 days after the date of publication of the animal feed/pet food proposed rules – so the suite of all three FSMA-related rules can be considered as a whole.

 Why are there reports that say the debt-limit and federal spending deal included money for the inland waterways?

A: The legislation did not include a new spending measure for inland waterways.

The U.S. Army Corp of Engineers is running up against its spending cap to continue work on the Olmsted dam project on the Ohio River.

Some members of Congress apparently were concerned the WRRDA legislation referenced previously would not be finalized before the Corps hits the spending cap, thereby shutting down the Olmsted project.

So language was included to increase the cap and allow the Corps to continue work on this particular project.

 Is the “15 working day” requirement for an informal conference suspended facilities for receiving citations from the Occupational Safety and Health Administration (OSHA) because of the shutdown? If the company decides to pay and abate within the abatement dates, does the 15-day payment requirement apply?

A: When OSHA issues a citation to an employer, it also offers the employer an opportunity for an informal conference to discuss the citation, subsequent penalty and potential settlement.

If you had an informal conference scheduled with OSHA during the government shutdown, it should not be a problem to reschedule this event since timing of the conference is flexible.

However, employers must submit the "Notice to Contest" an OSHA citation within 15 working days of the date the citation was issued by sending a written notice to the Area Director.

If the "Notice of Contest" deadline occurred during the shutdown, it is suggested that your attorney send a formal letter to OSHA expressing the general assumption that all deadlines are extended by the length of the shutdown.

Due to the shutdown and subsequent delay in response time as the government reopening, it may be difficult to get immediate confirmation either verbally or in writing from the Area Director.

Were crop insurance claims affected by the shutdown?

A: In most cases, crop insurance companies continued processing claims and issuing indemnities to producers during the shutdown.

The end of the shutdown will allow crop insurance companies to seek reimbursement from the Federal Crop Insurance Corporation.

 What is the status of conservation reserve program (CRP) payments and direct payments?

A: CRP and direct payments were scheduled for release during the first week of October.

The Farm Service Agency plans to issue the payments as soon as they are able. Note: direct payments will be reduced by 5 percent to account for sequestration, but CRP payments are exempt.

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