Coronavirus Impacts on Ag Economy
Today I would like to talk to you about the coronavirus and potential impacts on the agricultural economy. The impacts of the coronavirus on the US, North Carolina, and most importantly Union County Agricultural economies are unfolding and fluid. So it’s going to take some time for Agricultural Economists to measure the full impacts.
Today I’d like to talk to you about four significant concerns and questions that we at NC State foresee for these agricultural economies and what we know presently for policymakers, legislators, and decision-makers to consider as they respond to this crisis.
Number One is it farming will likely be unprofitable in 2020 with most commodity prices currently tanking two double-digit percentage losses since this crisis began. Number two is can the agricultural supply chain function at capacity given that processing of meats poultry and produce are labor-intensive. Which makes social distancing difficult and means workers could contract and spread the coronavirus forcing plant shutdowns.
Number three can the agricultural supply chain transform to support how Americans are now consuming food do to the stay-at-home and social distancing rules? Number four a significant spike in unemployment and loss of income will shift and change the demand for food. Some Americans will spend less on food due to having less disposable income, and they will change their preferences to less-expensive basic foodstuffs for at-home consumption.
So in sum, the impact of the novel coronavirus takes the agricultural economy to uncharted waters. The most of the most significant concerns are profitability for Farmers with most commodity prices tanking double-digit percentage points and the supply chain resiliency to stay online while transforming to support the different ways Americans are now consuming food. Finally, the significant spike in unemployment and loss of income will shift and change the demand for food and this will influence the profitability of Agriculture at the farm gate. As the situation is fluid and changes are happening daily other concerns and questions will likely be forthcoming.