FACTBOX-USDA is entwined in U.S. farm output, markets

Fri Mar 1, 2013 2:40pm EST

WASHINGTON, March 1 (Reuters) - The U.S. government has a
hand in every stage of American agriculture, from planting the
crop to harvesting and price discovery. Among other things the
automatic budget cuts that began on Friday will affect the
Agriculture Department's role in measuring farm output and
tracking market prices.
    Most prominently, USDA says budget cuts may force it to
furlough all 8,400 meat inspectors for 15 days. By law, meat
plants cannot operate without USDA inspectors, so a furlough en
masse would shut down the meat industry.
    Some $10 billion in production would be lost if that
happens, USDA estimates. It says it will try to minimize the
impact, perhaps through non-consecutive days off for inspectors.
    Up to one-third of USDA's 100,000 employees may be affected
by furloughs, USDA says. They will get at least 30 days' notice,
which means layoffs are still weeks away.
    At least ten of USDA's agencies and offices have a direct
impact on production, marketing and price-setting. The following
is a list of what they do and, in cases where USDA has provided
details, how the sequester may affect them.
    -Food Safety and Inspection Service: inspects meat packing
and processing plants to ensure meat is wholesome and safe to
eat. Also inspects meat imports and exports. Furloughs of all
8,400 inspectors are possible.
    -National Agricultural Statistics Service: produces most
USDA reports on crop and livestock production, marketings and
stocks, including the monthly crop report that is one of the
most widely followed agricultural reports in the world. USDA
says NASS would stop analysis of its 2012 Census of Agriculture,
the foundation for USDA forecasts, under a sequester. The crop
report and other major NASS reports, such as Prospective
Plantings due at the end of March, would continue.
    -Office of the Chief Economist: produces the monthly World
Agricultural Supply and Demand Estimates (WASDE) report, a
companion to the crop report and equally influential in
affecting agricultural commodity prices.
    -Agricultural Marketing Service: provides hundreds of
reports daily on local prices for livestock and crops. Its
"market news" data are used as benchmarks for livestock futures
at exchange operator CME Group Inc. AMS provides a
weekly report on the volume of grain and soybeans inspected for
export, watched by traders as an indicator of demand.
    -Foreign Agriculture Service: produces the weekly Export
Sales report for U.S. grains, soybeans, beef and hides, and
cotton, which influences commodity prices worldwide. FAS also
provides data and analysis for WASDE, makes quarterly forecasts
of U.S. farm exports, publishes reports on crops worldwide and
has a network of foreign attaches who report on developments in
major food exporting and importing nations.
    -Grain Inspection and Packers and Stockyards Administration:
weighs U.S. grains, pulses, oilseeds, and processed and graded
commodities. Also enforces fair-trading rules in livestock, meat
and poultry markets, including timely payment.
    -Farm Service Agency: operates crop subsidy programs,
including loan programs that set a minimum price for major
crops, tracks plantings of major crops, assists in WASDE
estimates.
    -Economic Research Service: makes periodic estimates of crop
and livestock production and prices as well as farm income and
indicators of financial health of the farm sector. Its analysts
also have a hand in WASDE estimates.
    -Animal and Plant Health Inspection Service: duties include
preventing introduction of crop and livestock pests and diseases
as well as approval of biotech crops for farm use. APHIS was a
lead agency in combating mad cow disease and has surveillance
programs against deadly or debilitating livestock ailments such
as hoof and mouth disease. 
    -Risk Management Agency: oversees the federally subsidized
crop insurance system. Duties include approval of new types of
coverage, setting the premium rate for policies and sharing part
of the losses when claims are high. So far, growers have
collected a record $14.7 billion on losses due to the 2012
drought, which is $4 billion more than insurers collected.

 (Reporting By Charles Abbott;editing by Sofina Mirza-Reid)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.