By Charles Abbott
WASHINGTON, March 6 A leaked Agriculture
Department email briefly rattled the U.S. livestock market on
Wednesday as traders interpreted it as meaning the department
might implement mandatory budget cuts in ways that deliberately
worsen disruptions at meat-packing plants.
Agriculture Secretary Tom Vilsack has said USDA will
cushion the impact on the meat industry and consumers as much as
possible. Still, there could be brief plant-by-plant shutdowns
and scattered meat shortages, although months in the future.
The memo, from an official at USDA's animal and plant health
agency and confirmed as authentic by the agency, was circulated
by some Republican lawmakers and viewed by traders as evidence
that the Obama administration wants the so-called budget
sequester to be as disruptive as possible.
The leaked email, dated Monday, makes reference to a USDA
regional wildlife services manager being told that in making
sequester cuts "make sure you are not contradicting what we said
the impact would be." While critics said the phrase showed an
intent to be inflexible, USDA said the email actually was an
approval of a request to curtail certain wildlife services in an
additional 16 states as a way to avoid furloughs.
USDA shared with Reuters a preceding email in which the
request to avoid furloughs was made. It says the agency proposed
the wider reduction in service in budget documents sent to
Congress months ago.
USDA funding for the 2013 fiscal year that ends Sept. 30 was
cut by $1.9 billion, or about 5 percent, by the reductions that
took effect on March 1.
Officially, USDA says it is working to minimize the impact
of cuts. "If we can find a way to do something to reduce the
impact of the sequester, we will do it," USDA spokeswoman
Courtney Rowe told Reuters.
Uncertainty over potential meat inspector furloughs is said
to have contributed to weak U.S. cattle and hog markets this
week, although other factors, including selling by large
investment funds and weak demand for pork, have also weighed on
By law, meat plants cannot operate without USDA inspection.
Packers would buy fewer animals and produce less hamburger, pork
and chicken during a furlough. USDA says inspectors would be
furloughed for a total of 11 or 12 days each but the days off
would be non-consecutive and it would try to minimize the impact
on packers and processors.