As the federal government shutdown continues, farmers across the country are facing mounting financial strain due to their inability to access marketing loans — a critical cash flow tool during harvest season.
Many producers typically use USDA’s marketing assistance loan program in the fall, pledging their harvested grain as collateral in exchange for a short-term, low-interest loan. The funds help pay down operating loans and maintain relationships with lenders while farmers wait for potentially higher market prices later in the year. But with USDA offices closed during the shutdown, this option has suddenly disappeared.
“It sort of takes away a tool that was on the table for them to be able to pay off or pay down those operating notes in the fall and keep a good relationship with their lender,” says Mykel Taylor, professor and interim department head of Agricultural Economics & Rural Sociology at Auburn University. “Now you’ve got the situation where they don’t have the ability to do that. And so they’re going to continue accruing interest on those operating notes.”
Taylor explains many producers are holding onto their crops, hoping for a winter price rally. But the margins are tight.
“They’re waiting out this fall downturn in prices hoping that this winter something will turn their way,” she adds. “But we are really, in some ways, talking about pennies when we need to be talking about quarters. We need big movements to make a difference when it comes to the breakevens for these folks. They are doing what they can, but they are in a very bad situation.”
Regional Differences and Commodity Pressures
The use of marketing loans varies across the country depending on local economics and commodity markets. For cotton producers, current price levels make the loan program particularly important.
“When we think about cotton, we’re in a situation where the cash price is in and around 60¢
a pound, the marketing loan rate is at 52¢, and it’s going to jump up to 55¢ for the 2026 crop,” Taylor says. “But our breakeven prices are 92¢ to $1 a pound. That math is not working in the farmer’s favor.”
Without access to these loans, farmers lose a vital bridge between harvest and market recovery, amplifying financial stress in a season when cash flow is critical.
Policy Uncertainty Adds Pressure
The shutdown’s timing is particularly challenging. Harvest season is when many producers rely on marketing loans the most. With USDA offices closed and no clear timeline for reopening, the longer the shutdown drags on, the more strain farmers will face heading into winter.
Taylor notes these programs are designed to provide flexibility in a volatile market environment — something the shutdown has abruptly undercut.
“They really were looking at these marketing loans as a tool to keep things on good terms with their lenders,” she says. “And that’s where they’re missing out.”