The Sequester Hits Iowa's Agriculture - ABC5 News Des Moines, IA

The Sequester Hits Iowa's Agriculture

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by Phil Prazan

pprazan@myabc5.com

@PhilPrazan

On Friday President Barack Obama signed the order authorizing the government to begin cutting $85 billion from federal accounts, officially enacting across-the-board reductions that he opposed but failed to avert.

Obama has insisted on replacing the cuts, known as a "sequester," with tax increases and cuts spread out over time. Republicans have rejected any plan that included tax revenue.

The government says the reductions will soon result in furlough notices to government employees, including USDA meat inspectors.

Union rules say these furloughs won't kick in immediately because employers have to give up to 30 days notice.  However, come the beginning of April some meat processing plants could furlough up to a third of their employees.

Those and other aspect of the budget cuts are going to shake up the agriculture industry in Iowa.
 
The Tyson Foods plant in Columbus Junction processes pork and employs 1200 people.  It has to have a USDA meat inspector there to operate, so furlough days could mean days the plant goes dark.

That would affect the small town in a big way.  Including where all those livestock trucks get washed, a nearby business called Hogwash.  Employees there said jobs would be on the line if anything happened to Tyson.

Dave Miller from the Iowa Farm Bureau says if the furloughs happen on consecutive days, it could devastate an industry that depends so much on the flow of pigs coming in and pork chops going out.
 
"If there's a manufactured shortage, if you will, at the grocery store, my guess is prices would rise in retail.  But prices at the farm, if you can't move animals to slaughter, prices may well drop, or plummet in fact," says Miller.

He believes the smarter way would be to stagger the days throughout the year.

Disruption of the meat industry's work flow is one thing but there are also other consequences.

The Farm Service Agency will have to cut the amount of young farmer loans.

"They can cut the amount that's available to loan immediately.  That was probably cut today," says Miller.

The Ag industry doesn't need anymore obstacles right now: the drought is expected to continue, prices keep going up, Congress still hasn't completed an updated Farm Bill and these budget cuts are just adding to an already uncertain situation.

"There's no immediate impact back to the politicians so it's kind of frustration more than anything and then the other thing is: it doesn't need to happen.  So it's a double frustration," says Miller.
 
And remember, this is only round two in a three part congressional fight.

We'll hit another "debt ceiling" on March 27th and if it isn't raised, we could face a complete government shut down.

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