Day 7 Shutdown Update

As the federal government shutdown enters its second week, what began as a short-term disruption has turned into a sustained operational slowdown across multiple agencies. With Congress still at an impasse, businesses regulated by FDA, USDA, and import authorities are now facing tangible, cascading effects—from delayed payments and data blackouts to bottlenecks in regulatory reviews and shipments.

FDA: Limited Operations Under Mounting Pressure

The FDA remains constrained by statutory limits on spending during the lapse in appropriations. The agency continues to perform critical, public health and life-safety functions, including import entry screening, high-risk inspections, and outbreak response. However, other activities are scaling back:

• No new user-fee submissions accepted – FDA cannot legally receive new applications or user-fee payments for drugs, biologics, devices, or animal drugs until funding resumes.
• Carryover-funded work continues – Reviews already in progress and fully funded by carryover user fees remain active, but timelines are slowing as staff bandwidth tightens.
• Furloughs increasing – Reports indicate that approximately 14% of FDA staff are already furloughed, up from the initial contingency plan. This affects internal review coordination, communication, and support functions.
• Import entry backlogs – Import screening continues, but field reports point to slower release times and lengthening queues, especially for high-volume ports.

The cumulative effect is growing uncertainty for sponsors, manufacturers, and importers with time-sensitive regulatory filings or shipments.

USDA: Program Suspensions, Data Blackouts, and Local Office Closures

The USDA’s operational slowdown is now severe, with critical farm and food system programs suspended.

• Farm and disaster assistance halted – USDA has suspended farm loan processing, commodity program payments, and disaster relief disbursements, cutting off key financial support during peak harvest season.
• County offices effectively closed – Many local USDA offices are now unstaffed, leaving producers unable to submit documentation or access technical assistance.
• Animal and plant health under strain – While emergency operations continue, routine monitoring and diagnostics are lagging as resources are diverted to essential response-only work.
• Data blackout deepens – Statistical releases from NASS and ERS, including crop, export, and economic reports, are paused. Commodity markets are already showing increased volatility due to the lack of real-time data.
• Food safety inspections steady—but isolated – FSIS continues meat, poultry, and egg inspections as essential services, though support functions and reporting are thinning.

The agricultural sector now faces operational blind spots, liquidity strain, and diminished situational awareness at a critical point in the production cycle.

Imports and Trade: Accumulating Delays

• CBP remains operational but stretched – U.S. Customs continues core cargo processing and tariff collection functions, but is increasingly strained as coordination with other agencies slows.
• Multi-agency bottlenecks – Imports requiring review from multiple PGAs (FDA, USDA, APHIS) are experiencing longer clearance times, often delayed until all agencies can complete their steps.
• User-fee funded services persist—but slower – Where user fees support APHIS or FDA import operations, processing continues, though with slower turnaround due to limited staff and coordination.
• Industry guidance shifting – Logistics providers and trade advisors now recommend building in a full week of additional lead time for FDA-regulated goods, emphasizing contingency routing and early document submission.

What Industry Should Do

1. Reassess regulatory timelines – Adjust expectations for pending or planned submissions; assume additional delays even in carryover-funded reviews.
2. Monitor imports proactively – Communicate with customs brokers daily, ensure all entry data and documentation are complete, and track holds through FDA’s entry systems.
3. Prepare for data and reporting gaps – Commodity and export data interruptions may affect forecasting, contracts, and pricing. Consider alternative analytics or third-party data sources.
4. Document operational impacts – Maintain records of any missed deadlines, delayed imports, or suspended payments that may later support requests for extensions or regulatory discretion.
5. Engage early for reactivation – Once funding resumes, agencies will triage backlogs based on urgency. Early engagement and readiness will determine who gets attention first.

Outlook

The transition from a temporary lapse to a prolonged shutdown brings escalating risk to regulated industries. If funding is not restored this week, cumulative backlogs will deepen, and both FDA and USDA will face weeks of recovery once operations resume.

We are continuing to monitor agency communications and trade developments daily. For clients with pending FDA submissions, USDA interactions, or high-volume imports, contact our team to discuss proactive mitigation and post-shutdown reactivation strategies.