USDA Inspectors Furloughed in July, Vilsack Says

21 Mar USDA Inspectors Furloughed in July, Vilsack Says

By Allison Floyd, Growing Georgia, March 20th, 2013

The USDA will begin to furlough inspectors for 11 days beginning in July, Agriculture Secretary Tom Vilsack told the Sioux City Journal on Tuesday.

Some 6,200 inspectors might be forced to take furlough days under mandatory budget cuts that took effect on March 1. Vilsack warned a month ago that furloughs would affect meat processing and testified last week in front of the U.S. House Agriculture Committee about the inevitability of furloughs.

Farmers, producers and agriculture advocates still don’t know how much furloughs would impact production, but since production lines can’t run without an inspector onsite, any furloughs likely would have a ripple effect through the industry.

“In the past, when we have had a temporary shut down because of lack of passing a budget, but the meat inspectors were kept on the job,” said Mike Giles, the president of the Georgia Poultry Federation. “In that scenario, they had the flexibility to shift schedules, but this may be different.

“There are a lot of unknowns. What we want to avoid is the shutdown of any plant,” he said.

Leaders of agriculture states are urging the USDA to find a way to avoid the furloughs.

Kansas Gov. Sam Brownback wrote Vilsack a letter Monday stressing that “failing to provide these inspections will negatively impact consumers, farmers and ranchers, meat processors and their employees.” Additionally, the letter strongly encourages Vilsack “to seek options other than furloughing front-line safety inspectors to meet USDA’s spending reduction obligations.”

Vilsack has said that the furloughs will cost $10 billion in meat production losses, but that the budget cut language is worded in such a way that it prohibits him from transferring money from other areas of the department to pay for food inspectors.

Plant shut-downs could complicate or even stop a recovery in pork prices, according to Purdue University Extension agricultural economist Chris Hurt.

U.S. live-hog and futures prices have fallen, and furlough federal meat inspectors is just another challenge for an industry already dealing with high gas prices (which leave Americans with less expendable income) and waning demand from foreign buyers, Hurt said.

“Price weakness is coming from demand concerns,” Hurt said. “The first of those concerns is the weakened buying power of U.S. consumers. Unusually high gasoline prices for this time of year and increased payroll taxes since Jan. 1 have reduced the buying power of consumers.”

Still, the potential reduction in federal meat inspectors as a result of automatic spending cuts could mean animal-processing plants would operate fewer days of the year.

“If plants were to shut down some days, they wouldn’t buy hogs for those days, thus weakening hog prices,” he said

The USDA already has suspended several livestock reports, including the July Cattle report. According to the USDA’s National Agricultural Statistics Service (NASS), other surveys and reports also will be suspended through the end of the government’s fiscal year in September.

Meat processing plants likely won’t see any major changes until this summer.

But any plant shut down is bad news for poultry industry, which has a short window for processing.

And a plant cannot run without an inspector on site, Giles said.

“Every hour, every minute of every day,” he said, an inspector must be at the plant for it to run.