U.S. farmers will lose an estimated $20 billion this year as a result of the coronavirus pandemic, according to a report from the Food and Agricultural Policy Research Institute at the University of Missouri.
“We’re looking at a situation with a lot sharper — or very big decline in farm income relative to what had been expected,” Patrick Westhoff, director of the Food and Agricultural Policy Institute, told USA Today. “It’s a much tougher time for farmers than we would have guessed a few months ago.”
The research projects short-term implications for all aspects of U.S farming, including demand for fuel and ethanol and the prices of crops and livestock. In January, FAPRI assumed a 2.8 percent increase in overall consumer spending relative to 2019, which it has since decreased to 2.2 percent.
The institute projects downward-trending consumer spending will reduce demand for agricultural products, with prices for crops such as soybeans and corn projected to fall between 5 and 10 percent and market prices for livestock at risk of falling up to 12 percent.
Corn prices have already dropped about 50 cents per bushel since early February, with a similar decline for soybeans, while live cattle prices have fallen from $105 per hundredweight at the beginning of the year to $82.75 Tuesday.
Workers’ health and the closures of facilities are also affecting the market, such as Smithfield Foods’ closure of its Sioux Falls, S.D., facility, which accounts for nearly 5 percent of nationwide pork production, after state health officials said about 438 workers had tested positive for the coronavirus.
JBS has closed its Greeley, Colo., meatpacking plant after 43 positive tests and two deaths. JBS is one of four food companies that account for about 85 percent of the national beef market and 70 percent of the pork market, according to USA Today.