A federal shutdown doesn’t just close parks. A government shutdown can cause slowdowns for the cash, credit, and conservation pipelines rural landowners rely on. During a recent episode of the National Land Podcast, Editor for Progressive Farmer Chris Clayton laid out the real-world impacts for landowners, buyers, and sellers.

Here’s what landowners should know about how the government shutdown could affect them.

Payments & Loans: Cashflow Shock and Deal Risk

October is when USDA program checks usually land, including ARC/PLC, ERP, and conservation payments. In a shutdown, they don’t. As Clayton puts it: “ERP payments, which are nearly $2 billion to landowners… none of those checks went out… they’re all on hold until we get some sort of CR that authorizes the USDA to cut those checks again.”

The bigger immediate hit is financing. FSA operating and ownership loans are already slower-moving programs, and shutdown stalls can push sellers toward cash buyers and leave young or first-time buyers behind because loan operations may be impacted.

Landowners should expect delayed program cash and more fragile closings. Add flexible timelines or shutdown contingencies and keep a backup buyer or lender warm.

Conservation & Insurance

Natural Resource Conservation Service technical staff are largely furloughed, so EQIP/CSP/easement work stalls. Clayton warns some programs won’t reimburse you if you front project costs during the shutdown: “If you go ahead and advance the money… you’ve lost out.” Unless your contract guarantees reimbursement later, it may be prudent to put NRCS-dependent work on hold for the time being.

By contrast, crop insurance continues because private carriers administer claims. Clayton predicts indemnities will not be delayed as a result of the shutdown.

Bad Timing for Ag Producers

The longest shutdown ran 35 days in 2018–19 and fell over the holidays; this time, the shutdown falls during harvest season, which has significant implications for ag landowners. Storage pressure, weak basis, and slower financed demand can extend days on market for post-harvest listings. It’s important for ag landowners to be flexible on price/terms and assume a thinner pool of financed buyers until Washington reopens.

An aid package is plausible once the government reopens. There’s a recent “blueprint” (Emergency Commodity Assistance) and precedent for large payouts, “about $23 billion… in 2018 and 2019,” but Congress has since tightened USDA’s Commodity Credit Corporation authority, which could limit speed or scope.

What to Do Now

Landowners would be wise to tighten cash flow with temporary lines or staged payments, add shutdown contingencies to contracts, pause NRCS-dependent projects, keep crop-insurance claims moving, and line up alternate financing or backup offers until checks and FSA desks restart. As Clayton sums up, these standoffs “become a real headache for everybody… and here we are again.”

If you’ve got questions about how your property or business could be impacted by the federal shutdown, get in touch with your local Land Professional today!