April 26, 2020

COVID-19 Impact on Agriculture

COVID-19 Impact on Agriculture

The Coronavirus pandemic is disrupting the lives of American farmers and ranchers. The agriculture business is forced to dump and destroy products, causing a lack of financial stability. “After years of a down farm economy and damaging severe weather, the COVID-19 ripple effects are forcing farmers and ranchers to face heartbreaking financial realities,” said American Farm Bureau Federation President Zippy Duvall.

In a matter of five days, 30 million school lunches, 15 million school breakfasts and 100 million meals at restaurants stopped being served daily. In the past month, dairy prices have dropped 26-36%, corn futures have dropped 14%, soybean futures are down 8%, and cotton futures have plummeted 31%. Despite a rise in retail prices in some areas, the prices paid to cattle ranchers have fallen 25%, Duvall said. Additionally, 40% of all produce consumed in America is shut down.

The produce industry estimates that the sudden turn of events has resulted in $5 billion in losses to produce growers, shippers, and wholesalers during this emergency. More than 80 produce organizations sent the Produce Market Stabilization Program to the U.S. Department of Agriculture (USDA) requesting $5 billion to immediately support critical financial needs in the produce supply chain. Additionally, 108 members of Congress sent a letter to Agriculture Secretary Sonny Perdue urging USDA to support immediate relief.

The pork industry states that they differ from farmers and dairy producers because “The pork industry is based on a just-in-time inventory system. Hogs are backing up on farms with nowhere to go, leaving farmers with tragic choices to make. Dairy producers can dump milk. Fruit and vegetable growers can dump produce. But, hog farmers have nowhere to move their hogs,” said National Pork Producers Council (NPPC) President Howard “A.V.” Roth. The pork industry is searching for a lifeline, with the NPPC releasing a statement, stating the industry is facing $5 billion loses for the remainder of the year due to COVID-19. “We remain committed to supplying Americans with high-quality U.S. pork, but face a dire situation that threatens the livelihoods of thousands of farm families,” said Roth. “We are taking on water fast. Immediate action is imperative, or a lot of hog farms will go under.”

NPPC is asking USDA to purchase over $1 billion of pork products to clear out a backed-up meat supply, supplementing agency food bank programs facing increased demand due to rising unemployment, and accommodating pork products packaged for restaurants and other segments of the food services market. NPPC is also asking for equitable direct payments to producer’s participants without eligibility restrictions, and seeking a legislative fix to emergency loan programs that have left farmers behind

A study by The National Cattlemen’s Beef Association (NCBA) estimates cattle industry losses as a result of the COVID-19 pandemic will reach $13.6 billion. “This study confirms that cattle producers have suffered massive economic damage as a result of the COVID-19 outbreak and those losses will continue to mount for years to come, driving many producers to the brink of collapse and beyond if relief funds aren’t made available soon,” said NCBA Chief Executive Officer Colin Woodall in a press release.

NCBA states that relief funds that were meant to provide aid directly to cattle producers were divided among multiple commodities, many of which already have government programs in place to support production. Because of this, NCBA is asking members of congress “for additional funds to be made available specifically for cattlemen and women,” to give some relief. NCBA also recognizes that this current situation is fluid, so additional damages and economic losses are likely.