Coronavirus shakes up ag industry
As the coronavirus continued to widen its deadly reach across the country last week, infecting thousands, confining millions to their homes and plunging the national economy into a recessionary tailspin, farmers and agricultural leaders wondered how deeply the global pandemic will cut into the agricultural industry.
Farmers expressed worries about the potential for even lower commodity prices, farm labor shortages, supply chain breakdowns and empty farmers’ markets. Not to mention a flood of event cancellations such as the Maryland & Virginia Milk Producers Cooperative Association’s 100th annual meeting, a three-day powwow that was scheduled to begin March 24 in Ellicott City, Md.
“It sure has created a lot of anxiety. I would describe it as a black swan event. We didn’t see it coming,” said Richard Wilkins, president of the Delaware Farm Bureau.
Ag officials in Maryland and Virginia said last week they were still evaluating the virus’s potential impact on farmers across the Delmarva region.
“We are in uncharted territory that may require some creativity and flexibility, but that is nothing new for Maryland farmers and growers,” Maryland Agriculture Secretary Joe Bartenfelder said in a statement. “I am confident that our department, the agriculture community and allied industries will continue working together to overcome any obstacles we may face as we head toward planting season.”
It was too soon to say how the virus’s spread may impact the planting season, said Pam Wiley, the Virginia Farm Bureau’s spokesperson. Grain markets suffered a significant hit last week. Corn was $3.51 per bushel on March 20, and soybeans were $8.52.
“I don’t think we’ve felt the ripple effect yet,” said Chip Bowling, a Charles County, Md., farmer and chairman of the U.S. Farmers & Ranchers Alliance. “That’s going to have a long tail on the ethanol market.”
Restrictions on movement across the country began to tighten late last week. California became the first state to order its residents to remain at home as much as possible over the next several weeks. Gov. Gavin Newsom made the announcement Thursday, citing a state model suggesting at least half of the state, or more than 25 million people, could contract the virus over the next two months.
If the Delmarva region follows suit, Bowling wondered whether exceptions might be made for growers.
“Can you go to your local Southern States and buy fertilizer?” he said.
The U.S. State Department suspended all processing of new, non-emergency visa applications in Mexico, leading to great concern that U.S. farms and ranches could face critical labor shortages. The national agricultural industry requires more than 250,000 foreign workers through the federal H-2A program to make it through planting and harvest, the American Farm Bureau Federation said.
In response, the USDA and the Labor Department said Friday they were working together to identify foreign and domestic workers who could fill in.
“President Trump knows that these workers are critical to maintaining our food supply and our farmers are counting on their ability to work,” Agriculture Secretary Sonny Perdue said. “We will continue to work to make sure our supply chain is impacted as minimally as possible.”
Bartenfelder and Delaware Gov. Michael Scuse asked workers across the region’s food system, including farmers, to remain open and maintain the supply chain. Though the national Farm Bureau said business slowdowns could limit access to seed, fertilizer and crop protection tools. Farmers may feel the need to reduce input costs, choosing cheaper fertilizer and seeds and deciding whether to plant all their acreage, Wilkins said.
“Agriculture needs to have that classification of essential so that we can continue to operate,” he said.
In the value-added farm sector, local food producers were seeing declines in sales at retail locations as panicked consumers cleared grocery stores shelves of staples such as milk, bread and toilet paper, said Kevin Atticks, executive director of Grow & Fortify, which represents several Maryland associations in the value-added agriculture industry.
“We’ve seen the purchasing chain tighten up a little bit,” he said. “Now more than ever, the concept of buying local and supporting local is critical. … At this point, those sales mean so much more than they did before.”
Some producers were seeing a boost in business, however. Hancock Family Farms, which recently opened a storefront in La Plata, Md., was “slammed” last week with people buying local beef, pork, chicken, eggs, cheese and other items, owner David Hancock said on his Facebook page.
“On behalf of all American farmers, I can assure you we will not stop,” he said. “There never has been, never will be and certainly not today are there any days off on the family farm.”
Locally owned grocery stores in general were doing good business, said Dena Leibman, executive director of Future Harvest CASA, a regional nonprofit that trains new farmers. She said the economic slowdown could be “dire” for the organization’s yearly conference, which is an important fundraiser. Fortunately, due to grant funding, they’re OK for at least a year, she said.
“It’s changing so quickly, it’s hard to keep on top of it,” she said. “It totally is disrupting the direct-to-consumer market for sure.”
The coronavirus is more bad news for the ailing dairy industry. Schools, a critical consumer of milk, have been shut down across the region, and Wilkins said some dairymen in his state have received letters asking them to be prepared to dump milk if processing plants can’t receive it. The price of Class 1 fluid milk was $16.64 per hundredweight on March 18, down from nearly $19 at the beginning of the year.
“All the progress that we’ve made in the last couple of years has come to a screeching halt, and we’ve even lost some of it, Bowling said.