How would a Government Shutdown Impact Meat Exports?

With the possibility of a federal government shutdown looming next week, USMEF often fields questions from members and other stakeholders about the potential impact on red meat exports.

If Congress does not approve a continuing resolution (C.R.) by Sept. 30 – the end of the current U.S. government fiscal year – many functions of the federal government will be suspended. However, USDA meat inspectors will remain on the job to ensure that U.S. plants can continue to operate. FSIS will also continue to sign export certificates, so any meat destined for international markets will have the necessary paperwork.

This does not mean, however, that a government shutdown won’t create obstacles for meat exports. Companies in need of assistance or support for customs clearance issues or other regulatory matters may encounter delays, if U.S. government agencies are not staffed at normal levels and/or are operating on reduced hours.

Trade negotiations could also suffer a setback in the event of a government shutdown, as the Office of U.S. Trade Representative (USTR) would be operating with a significantly reduced staff. This could make it very difficult to finalize the Trans-Pacific Partnership (TPP) if negotiations extend into October. USTR’s work on other key trade issues would be delayed as well.

USDA Market Access Program (MAP) funding operates on a calendar year basis, so USMEF’s utilization of these funds through the end of 2015 should not be impacted by a temporary government shutdown in early October. However, a shutdown would almost certainly dampen the prospects for Congress to approve an FY 2016 budget in a timely fashion, creating a heightened level of uncertainty for MAP funding beyond the current budget cycle. The Foreign Market Development (FMD) program operates on the U.S. government’s fiscal year, so FMD funding will only be available beyond Sept. 30 if a C.R. is approved, and then only for the duration of that C.R. (in the current Senate version, this date is Dec. 11, 2015).

It is also important to note that under the C.R., MAP and FMD funds are likely to be subject to sequestration requirements, which apply to all non-exempt federal programs. A 7 percent to 8 percent reduction in funding available for these programs is currently projected as a result of sequestration, which is an impact similar to last year. These figures may change, however, as Congress debates an FY 2016 omnibus budget bill.

Both the House version (H.R. 3049) and Senate version (S. 1800) of the FY 2016 Agriculture Appropriations bill include funding for MAP ($200 million) and FMD ($34.5 million) at the levels authorized in the 2014 farm bill. But these bills have only been approved by the respective appropriations committees and have not yet cleared the full House or Senate.

If you have questions about any of these issues, please email Thad Lively or call 303-623-6328.