The long-feared government shutdown kicked in, affecting millions of people.

D.C. Watch: Can members of Congress bridge their differences?The shutdown caused Farm Service Agency offices and Risk Management Agency offices around the country to close, and most government websites were shut down.

Food stamp benefits continue but federal funds for the Women, Infants and Children (WIC) will no longer be available though some states may be able to keep the program going for a little while.

Social Security payments continue through the shutdown and Congress did vote to continue to pay people in the military. However, even these payments will stop mid-month unless Congress raises the debt ceiling.

The Secretary of the Treasury says that the government will be unable to meet its financial obligations by Oct. 17.

There is so much acrimony in Washington that it is hard to see how Congress will bridge their differences and prevent even more damage to the U.S. economy.

As the government shutdown drags on, it is increasingly likely that USDA’s October Crop Production and Supply and Demand reports will be delayed – or even canceled altogether.

There was some movement on the farm bill this week, albeit relatively modest. Senate Majority Leader Harry Reid, D-Nev., re-appointed members to a hoped-for conference Committee on the Farm Bill.

The Senate had already appointed them months ago.

But the House has still not appointed conference committee members and the extension of the 2008 Farm Bill expired on Monday.

There will be little impact until the end of the year. That’s when, absent new farm policy, milk price supports soar by default under the provisions of “permanent” legislation set in 1949!

We would see stronger economic growth and more job creation in the short term if the sequester budget cuts were eliminated according to the Congressional Budget Office (CBO). However, the report also says eliminating those spending cuts would add to the federal budget deficit over the longer term.

If the planned sequester cuts for fiscal 2014 were eliminated CBO says GDP would be 0.8 percent higher and 1 million more jobs would be created than is the case if the cuts go into effect. Further, the larger budget deficit would then eventually reduce economic growth and income.

Other news from Washington:

  • The Food and Agriculture Policy Research Institute (FAPRI) released an analysis comparing the provisions of the House and Senate farm bill proposals. FAPRI’s analysis shows that the Senate bill reduces government outlays by $18.4 billion over 10 years (compared to a continuation of current programs) while the House bill’s savings come in at $12.6 billion. The Congressional Budget Office calculated the net savings of both bills near $16 billion over 10 years. Net farm income would be lower under both bills due to the elimination of direct payments according to FAPRI. The analysis also shows the House bill provides a stronger safety net for crops such as rice, barley and peanuts while the Senate bill provides more support for corn and soybeans.
  • The United Nations Intergovernmental Panel on Climate Change has just issued a report that says it is “extremely likely” that human activity is the dominant cause of global warming observed since the 1950s. The co-chair of the panel said “Our Assessment of the science finds that the atmosphere and oceans have warmed, the amount of snow and ice has diminished, the global mean sea level has risen, and the concentration of greenhouse gases has increased”. The panel predicts that sea levels will rise by between 10 inches and 32 inches by the end of the century. Significance for farmers? It provides new ammo for those seeking increased environmental regulation and restrictions.