How will the coronavirus affect agriculture?
I’m writing this from an empty bedroom in my house, which I’ve converted into my new Pandemic Office Space. My webcam is set up so that I am always perfectly lit for online classes and Zoom meetings. I have a desk I’ve hauled out from storage to give myself some semblance of professionalism when I can’t summon the energy to change out of sweats. Best of all, I have a fancy video-editing computer that I was given permission to practically rip out of the table from our university computer lab. That is, I signed a piece of paper saying that an iMac was necessary for my work, and I tucked it under my arm and walked out of the building with it the day Mizzou closed for the semester. Something that, a few weeks ago, would have been unthinkable. Has it only been a few weeks?
For most of us, we’re thinking about the change to classes, work and life in general as we knew it. However, the novel coronavirus and its accompanying disease, COVID-19, is going to have far-reaching consequences, for everyone, including agriculture.
Perhaps even especially for agriculture. Here is the breakdown of what we can expect to see, in a timeline:
- Farmers are missing their workforce. Why? Because they don’t know if they’ll be able to hire back migrant workers that ensure that the American agriculture sector functions. Visas for migrant workers from Mexico have been suspended, and there’s not a lot of information about when they will start allowing workers into the United States.
- American farmers are elderly. This means they are among the high-risk groups for COVID-19, a disease that can hospitalize its victims for weeks. The average age of American farmers is nearly sixty.
- Agricultural markets took a nosedive with the rest of the economy. Futures for soybeans, dairy, hogs, cattle, hogs, and yes – corn, have plummeted. This means different things for different producers. For cattle ranchers, it’s devastating. Cattle futures are falling with the stock market while restaurants who buy the best cuts of beef are closing, meanwhile, the regular cuts that are sold in supermarkets are bought by packing plants like Tyson and sold for far more than they are worth because demand for meat during the pandemic is high. For corn and soybean farmers, they are losing $50 to $90 an acre according to Successful Farming. Basically, farmers will probably be selling the crop at a loss. For a group of producers already relying on government subsidies to remain stable, this adds another dash of uncertainty.
THREE MONTHS FROM NOW
- As the amount of travel declines, so does the demand for ethanol. This is important, because roughly 40% of American corn goes to biofuels. This would further weaken corn farmers’ place in the market, which is already seeming to shift to favor soybean planting this year.
- As more people get sick, supply lines might be affected. “Supply lines” don’t necessarily apply to the regular groceries that people buy at the store (the USDA has specific powers that allow them to make rules to ensure people are fed), but plants and factories and drivers for products that keep food prices down might be. While there will be plenty of pigs to eat and corn to turn into corn syrup, we might see “bottlenecking” as the people in the agricultural industry get sick, along with the people that move these products from farms to store shelves.
- Internationally, trade is going to get complicated. Because of the ongoing trade wars, which put tariffs on soybeans from making their way to China (the United States was China’s biggest supplier of soybeans) soybeans were at a very low market value. Other countries in South America had taken up the slack, happy to trade with the Chinese without much taxation involved. Now, however, the pandemic has disrupted international trade and the United States might find itself in a much stronger position to take back the US soybean market than before.
The novel coronavirus comes at a very interesting time in the corn sector. While this year was originally slated to be the biggest harvest in five years, there is also some concern about how summer flooding is going to affect corn harvests, particularly here, in the Midwest.