Some said the first week of April was when the coronavirus outbreak and business closures would hit the make-or-break point for the U.S. economy. Things would have been much worse if Congress and the president had not taken action—passing and signing the coronavirus aid package the week prior.
Most people are focused on businesses such as restaurants or airlines, which certainly have experienced a sharp and sudden decrease. What they may not be thinking about is the cumulative impact on agriculture. Most hospitality and travel industries were doing well before the virus. Farmers and ranchers were not. Coronavirus is just the latest in a string of misfortunes that have kept the farm economy down for several years: weather disasters; a trade war; and, even before that, commodity prices have been below the cost of production. Which is worse: a sudden blow or a prolonged downturn? The answer is whichever one you and your industry are facing. But none of us can afford to lose farms and ranches, especially now that we’re more focused than ever on the security of our food supply chain.
Consumers understandably might think that farmers and ranchers are doing well, given the empty shelves we’re all seeing at grocery stores. But those buying habits could slow down, and we’ve already seen a dramatic drop in demand from food service, restaurants and schools and universities. There are unofficial estimates that the current market price of milk is down 40 percent compared to January. Prices for cattle, corn and other farm goods also are falling. We are thankful for the aid package that will help us sustain our food producers. Farm Bureau worked tirelessly to include up to $23.5 billion that USDA can use to help farmers and ranchers when estimates turn into hard data on the impacts to producers.
People are driving less, and that has driven down demand for ethanol made from corn at the same time as oil production has increased. Ethanol plants are idled, corn prices are down, and livestock producers who relied on distillers dried grains—a byproduct of ethanol production—are scrambling to replace that source of animal feed.
Agricultural futures, which many farmers and ranchers depend on to lock in better prices later on, are down as well. That shows a concern that consumers will buy less in the coming weeks and months, as the economy slows and unemployment worsens. It also reflects worries about whether our overseas markets will return if product can’t move and as economies around the world are reeling from the virus outbreak and restrictions to contain it. We’re certainly hopeful that trade will continue and grow.
Another concern that came to our attention quickly after the federal government began taking more stringent actions to curb the spread of coronavirus was whether our farmers would get the workers they were expecting from Mexico and other countries. Each spring tens of thousands of farm workers make their way to the U.S. to do the hard work many American citizens don’t want to do: pruning; plowin;, planting; and picking produce.
Farm Bureau and others worked overtime to ensure that processing of visa applications submitted by farm workers would not be adversely affected, and the State Department at the end of March made changes to make available more seasonal farm workers, while also protecting public health. Our farmers and ranchers are committed to feeding our country now and in the future, and we need workers to do it. About 20 percent of farm workers in the U.S. come through the H-2A program. They play a critical role in ensuring Americans have access to the food we need. Now we are monitoring to make sure the visa process operates smoothly as more government agencies move to telework.
Another impact we’re watching is the availability of farmers markets as some local governments order that they be suspended. Many farmers depend on farmers markets for most of their sales. With restaurant business severely cut, farmers who sell meat and produce directly to restaurants are more dependent on direct-to-consumer sales. The assistance passed by Congress should help farmers and ranchers who will be affected by the loss of their markets, but we must keep an eye on this to make sure the assistance is adequate to ensure that those farmers will be there for us when things get back to normal.
Our ability to clear hurdles for America’s farmers and ranchers depends on our awareness of issues surfacing across the country. By working together, we’ll address the economic impacts of the virus and ensure our fellow citizens have the nutritious food they need. We will get through this. —Zippy Duvall, American Farm Bureau president
