The federal government shutdown could wreak havoc on U.S. agriculture, and the rural economy, as farmers wait on subsidy payments, loans and data they need now to make plans for the spring.

The timing could hardly be worse, according to some farmers, as they've already been hit with fallen commodity prices and the loss of foreign markets in President Donald Trump's trade wars.

Now as a result of the shutdown, farmers say, applications are on hold for a $12 billion emergency aid package Trump and the Department of Agriculture announced for farmers hurt by retaliatory tariffs from China and other nations. The deadline to apply for that program was supposed to be Jan. 15 but may have to be extended.

One round of payments was made in November, but it's uncertain whether a second round was processed before thousands of USDA employees were furloughed.

“Farmers are waiting on that second payment because they need to start buying their seed, fertilizer and chemicals for 2019,” said Michael Slattery, a Manitowoc County grain farmer and economist for Wisconsin Farmers Union.

“The earlier in the year you buy seed, the bigger the discount you get,” Slattery said.

USDA Farm Service Agency offices, which process farm loans and gather data farmers need to make decisions, are closed.

"Everything just grinds to a halt," said Mike Ballweg, a University of Wisconsin Extension agent in Sheboygan County.

Some home buyers will wait for mortgages. The USDA provides — through private lenders — mortgages with no down payment requirements and low interest rates and fees to rural and suburban home buyers. It’s a small program, nationwide helping just over 140,000 people to buy a home in 2017, but is considered one of the best options around if you’re eligible.

“A lot of paperwork is probably just setting on a desk somewhere in Washington, and it's not going to move until the government opens again. By then it might be too late for some people applying for loans,” said Jim Goodman, a board member of the Wisconsin-based group Family Farm Defenders.

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Tough times for farmers

Farmers count on the USDA for a wide range of services, many of which are now suspended during the shutdown that began Dec. 22 at 12:01 a.m.

It's especially troublesome as farmers have been caught in a downward spiral of lost markets and low prices for milk, crops and livestock. Also, the shutdown threatens the implementation of the 2018 farm bill and its program aimed at helping small dairy farms endure one of the worst downturns in the dairy industry in recent memory.

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The rules and policies to put the massive piece of legislation in place are largely written by USDA employees at many levels.

“And that’s a mad scramble. They really work hard to get all that in place as quickly as possible,” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison.

The shutdown is “coming at a bad time, for sure,” Stephenson said.

USDA isn’t “writing the checks or doing the things to get payments out to dairy farmers, corn and soybean growers. So that’s a problem,” he added.

When farmers are hurting, it's felt throughout the rural economy.

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Each dollar of net farm income results in an additional 60 cents of economic activity as farmers spend money in their local communities, according to UW research.

That translates to millions of dollars in urban centers as well since most of the items farmers buy come from other places.

And to some degree, farmers are gamblers. They borrow money in the spring to plant crops, betting that the fall harvest will cover their loans and generate a profit. They borrow money to raise livestock, hoping the price they receive when the animals are sent to market will be sufficient.

"There are a lot of farmers who count on FSA loans to pay bills. And that works its way through the community," said Goodman, who recently retired after 40 years of dairy farming in Wonewoc.

During the shutdown, the government continues to inspect meat, poultry and eggs. It's also releasing data needed for setting farm milk prices.

Certain USDA activities will continue if they are related to law enforcement, the protection of life and property, or are financed through available funding.

But a lot of farm data, necessary in forecasting global agricultural trends, isn't getting processed, and that could undermine commodities markets.

“We have not seen export sales figures since the shutdown began. And it's at a time when China supposedly has been making some new soybean purchases from the U.S.,” said Todd Hultman, a markets analyst with DTN/The Progressive Farmer in Omaha, Nebraska.

“It’s unfortunate that we’re not able to get confirmation in the markets. I think traders would have a little more confidence if they could see, in black and white, the reports from USDA about what sales are being made,” he said.

The Census Bureau and Bureau of Economic Analysis are shuttered and not releasing their usual reports on the economy's health. This past week, scheduled releases on new home sales and trade were no-shows. A report on construction spending next week would also be pushed back unless the federal funding deadlock is broken.

A prolonged stalemate that delays reports this month on retail sales, consumer spending and gross domestic product could further cloud an uncertain economic outlook, according to analysts.

Hultman said the USDA will probably have to push back a major report, scheduled for Jan. 11, that would contain agricultural data for global markets.

“We are just a little bit in the dark at this time,” he said.

As traders, investors and farmers look ahead in 2019, many of their concerns remain the same as they were in 2018, said Alex Breitinger with Breitinger & Sons, a commodities futures brokerage firm based in Indiana.

“Trade disputes with China, Mexico, and Canada still hang over all markets, especially major U.S. exports like grains, livestock, and machinery. The United States seems to have won some battles in the ongoing trade wars, but the long-term damage suffered by both sides may exceed any gains notched so far,” Breitinger wrote in a recent column.

USA Today contributed to this report.