As the COVID-19 pandemic continues to spread throughout the world, people everywhere have been impacted on a personal or financial level. The health impact and loss of lives is obviously the first priority in our minds. But once the crisis has passed, the economic impact might be with us for years to come.
Economists worldwide have been gathering data in order to speculate on the potential economic impact of this crisis. While many have been focused on the travel and hospitality industries, many may have not yet considered the impacts that COVID-19 could have on the agricultural sector. It is now as important as ever to ensure that the supply chain of agricultural goods continues to move efficiently.
While this health crisis has been the most immediate impact on the agricultural industry, there have been other setbacks for farmers and producers before COVID-19 was even named. Between trade wars with China, natural disasters such as hurricanes, and low commodity prices, farmers in the United States have faced many challenges over the past couple of years.
Commodity Prices Decline
Nationwide, agricultural goods have seen a decline in price at least partially due to the COVID-19 crisis. Corn, for instance, has seen a 14% decline in it's commodity price. According to the American Farm Bureau, here are some of the other nationwide decreases in commodity price for agricultural goods between January and April:
- Soybeans: -8%
- Live Cattle: -25%
- Class III Milk: -26%
- Cotton: -31%
- Hogs: -31%
- Ethanol: -35%
- Class IV Milk: -36%
These declines are a worrying trend for the agricultural sector. According to an April 20th Florida Seasonal Crop COVID-19 Impact Assessment report by FDACS, the losses to Florida's agricultural sector may have reached $522.5 million. Florida's Agricultural Commissioner Nikki Fried stated that "These crop loss figures reported by growers are the tip of the iceberg — without quick access to meaningful federal assistance, many of Florida’s multi-generational agriculture businesses could be sunk."
While the initial effects of the pandemic led to increased demand for agricultural goods and the emptying of shelves, the demand for many products has begun to decline. With unemployment claims at a record-breaking high, there is a worry that consumers will have less money to spend on agricultural goods. While more people are also cooking at home and Publix reported first quarter sale of $11.2 billion, a 16.1% increase from $9.7 billion in 2019, the disruption to the restaurant industry had widespread negative impacts.
Florida farmers, like many across the country, experienced some supply chain interruptions and struggled to get food distributed or sold, resulting in many losses of perishable produce. In response, the Florida Department of Agricultural Services (FDACS) launched a program aimed at connecting farmers directly to consumers for sales of fresh produce called Florida Farm to You. The program is representative of a national movement of Consumer Supported Agriculture programs (CSAs) which may provide a lifeline to farmers during the ongoing crisis.
In another effort to help farmers across that nation, and to help food-insecure consumers, the US Department of Agriculture (USDA) announced plans to purchase food through its Farmers to Families Food Box program. According to the USDA, they are "partnering with farmers, ranchers, specialty crop producers, food processors and distributors, and
non-profit organizations to ensure that all Americans have access to the fresh and wholesome food
they need during the COVID-19 national emergency."
In Florida, Publix also announced it would begin buying food from Florida farms and dairies to donate to food banks, in an effort to provide aid to the industry and to individuals.
Florida farmers, like other businesses across the nation, are able to apply for various forms of aid established by the CARES Act. The USDA recently announced $300 million in funding from the CARES Act will go to fisheries, providing a specific opportunity that could aid a significant segment of Florida's agricultural industry. FDACS has also encouraged Florida farmers to apply for Economic Injury Disaster Loans through a dedicated portal for agricultural industry applicants.
Much of the agricultural work in this country, and in Florida, is done by immigrants. The Trump administration has been taking steps to lower immigration into the United States in an attempt to stall the spread of Coronavirus across national lines. But with many farmers relying on foreign workers to do the hard work of picking the produce, these stringent measures may end up negatively impacting Florida's agricultural workforce.
University of Florida Impacts Survey Responses Due May 15
The University of Florida (UF) is collecting information through a survey study to assess impacts of the pandemic on Florida's agriculture industry. Responses will be collected through May 15 to provide some updated insight into the ongoing situation. Results of a survey conducted last month by UF IFAS can be viewed here.
As the effects of the pandemic continue to impact people everywhere, it is important that agricultural goods continue to flow and Florida's creativity in meeting the needs of farmers and consumers will be vital in the days ahead.
For helpful resources regarding COVID-19, check out this article.