U.S. agriculture takes a double punch from shutdown and tariffs

The U.S. federal government shutdownthat began on Wednesday has suspended key agricultural payments and delayed access to federal farm loans, dealing another blow to American farmers already grappling with falling crop prices, record debt levels, and ongoing trade tensions during the critical harvest season.

Under the shutdown protocol, a significant proportion of federal employees have been furloughed, forcing numerous government operations to pause indefinitely. The U.S. Department of Agriculture (USDA) has furloughed nearly half of its 85,000-plus staff, according to its contingency plan.

Many essential USDA services have been disrupted, including processing of farm loans and distribution of payments to farmers— covering billions in disaster aid previously approved.

Tim Wells, an Arkansas sheep farmer affected by recent extreme weather told Reuters he had planned to apply for disaster relief this month, but all new applications are now on hold.

"The way the farm economy's been, nobody needs to wait because it takes so much just to operate," he said.

The shutdown coincides with one of the most difficult autumn seasons in recent years for U.S. farmers. Trade disruptions have led international buyers to seek alternative suppliers, while a record corn harvest is expected to further depress prices. At the same time, costs of essential inputs like seeds and fertilizers continue to rise.

In an interview with CBS, Gary Wertish, president of the Minnesota Farmers Union, highlighted the compounded pressure on farmers.

The government shutdown comes at a time when tariffs are already severely impacting agricultural producers — it's a two-punch situation, Wertish stated.

He also noted a sharp increase in financial distress within the farming community. Under Minnesota's mediation law, lenders must offer farmers mediation before initiating foreclosure.

"We're only about two-thirds into 2025, yet we've already have more requests for mediation than we did all of 2023 and 2024," Wertish added, signaling deepening economic strain in rural America.