What farmers need to know about COVID-19
As COVID-19 makes headlines and heightens uncertainty around the country, farmers and others in rural America are looking for answers. The new coronavirus has been disruptive to markets as well as farm families’ lifestyles.
- READ MORE: Six possible impacts of COVID-19 on farming
Ag economist David Widmar predicts that the decisions made during the COVID-19 outbreak will be studied for years to come. He says four key sources of uncertainty make this time difficult for agriculture.
Relief for Farmers and Agriculture Industry
Congress allotted $23.5 billion for agriculture in the coronavirus relief package, but "that amount of money will not sustain" the farm sector, said Zippy Duvall, American Farm Bureau Federation president.
Markets and Prices
Stock prices have fallen over the last month, and commodity prices have followed.
- READ MORE: Soybeans start April 22¢ lower Wednesday
Economists Brent Gloy and David Widmar explained the outbreak is costing farmers $50 to $90 an acre from the lost corn and soybean revenue that farmers expected this year.
However, market analyst Ray Grabanski says demand for food is going up much faster and more than even the most optimistic food producer expected.
As the virus continues to spread quickly, consumers are stocking up on necessities such as bread, crackers, and pasta. Grabanski says this is why wheat is trading higher than before the virus sell-off occurred on March 21.
Shoppers stockpiling meat has caused wholesale beef prices have jumped to record levels, but the spike in prices isn't helping cattle farmers. Cattle prices have actually declined since January, putting many ranchers in a precarious financial position.
- READ MORE: Meat prices spike, cattle prices fall, and ranchers and lawmakers see market manipulation
In addition to groceries, live chickens are on some people's panic buying list. Poultry specialist and veterinarian David Frame shares eight important points to consider before purchasing chicks.
- READ MORE: Baby chicks are on the panic buy list
Farmers who sell directly to the public or institutions are especially concerned about market closures.
David Newman of Missouri sells 95% of his pork to the restaurant industry, which has been hit hard by the pandemic. He says demand has still been good as restaurants have moved to take out and delivery options, but the situation has added new logistics challenges.
“Farmers markets are essential activities for the economic livelihood of farmers and for food access for millions of Americans,” says Ben Feldman, executive director of the Farmers Market Coalition. “The closure of markets has the potential to bankrupt farmers and force people to go without food.”
In a recent teleconference about farmland, Mark Dozour, former chief economist of the Real Estate Center at Texas A&M, and Steve Bruere, owner of People's Company, said farmland is holding relatively steady in the wake of COVID-19.
- READ MORE: How COVID-19 affects the farmland market
Banking and finance
Low interest rates have been dropped further creating an opportunity for some farmers to refinance. After a phone call and a bit of paperwork with his banker, Indiana farmer Brian Scott is on track to save $100,000 in the next four years by refinancing one farmland loan and his home mortgage.
The Farm Credit Administration has urged the institutions in its system to work with farmers who have been affected by COVID-19. These institutions may be able to alleviate stress for farmers by extending the terms of loan repayments, restructuring borrowers’ debt obligations, or easing some loan documentation or credit-extension terms of new loans to certain borrowers.
Economist David Whitaker says he expects COVID-19 to be a small shadow compared with the economic downturn to come.
At the beginning of the month, some ethanol producers worldwide said demand was up for their products as people stockpiled hand sanitizer, which can be made from the biofuel.
Now, fewer Americans are driving to work, school, and events amid the outbreak. This could have a dramatic negative impact on corn demand by the U.S. ethanol oil industry, says Todd Hubbs of the Department of Agricultural and Consumer Economics at the University of Illinois.
Renewable Fuels Association president Geoff Cooper confirmed U.S. ethanol producers are on track to shut about 2 billion gallons of annualized output by then end of March because of the slump in demand for fuel.
Supply chains and logistics
COVID-19 is also creating supply chain concerns for farmers around the country. Iowa pig farmer Katherine Marcano-Bell says, “We worry about plants shutting down and us having to keep pigs for a longer period of time.”
Although the plant is not closing, the first confirmed case of a slaughterhouse worker infected with COVID-19 was reported Monday at a Mississippi poultry processing plant.
In a tweet last week, Secretary of Agriculture Sonny Perdue said, “Food supply is sound, it’s stable & there’s plenty of food available. To the folks working in grocery stores & driving trucks full of products: Y’all are the heroes in the food supply chain.”
Many farm families with school-age children now must juggle childcare along with the usual farm chores. This may require relying on family members who normally work on the farm or are of higher risk for the virus.
For Marcano-Bell, labor issues are top of mind as COVID-19 shutters businesses and schools in the state. Her family does the work on the farm themselves.
- READ MORE: What COVID-19 means down on the farm
The Iowa Department of Public Health has recommended farms and other businesses cross-train and prioritize critical functions.
In 2019 about 180,000 farmworkers from other countries worked in the U.S. under the H-2A program. More than half of all these workers are concetrated in five states and many come to work on large fruit and vegetable farms. Farmers who rely on these seasonal workers are concerned delays caused by COVID-19 will keep workers from arriving on time.
Economist Todd Hubbs says, "We'll be swimming in corn" after farmers indicated they will plant a larger-than-expected 97 million acres of corn. That could produce 15.9 billion bushels of corn, assuming normal weather and yields.
With classes canceled across the country, parents and students are clamoring for educational activities that can be done in isolation. FFA Advisor Alex Rogers recommends a host of online activities for high schoolers interested in animal science, welding, and more while they’re away from school.
- READ MORE: Ag students can learn online
While people are working and learning behind their screens at home to prevent the spread of COVID-19, people in rural America are having a harder time getting connected.
- READ MORE: COVID-19 highlights the digital disadvantage
Although online farm auctions have been a way of business for some companies for years, some farmers are buying equipment online for the first time as the CDC has recommended gatherings of no more than 10 people to help slow the spread of COVID-19.
Farmers are proud of being hard working and tough. “It’s not a time for farmers to be that tough guy,” says veterinarian Jim Lowe. “If you get sick, after getting on the tractor to plant, get yourself isolated and don’t infect your family.”
After a tiger at a New York zoo tested positive for the respiratory virus, the USDA says you should restrict contact with pets and other animals while you are sick with COVID-19, just like you would with other people.