New Report Shows Devastating Impacts of COVID-19 on Agriculture

A new report from the Nebraska Farm Bureau and the Platte Institute clarifies months of anxiety among farmers and ranchers: The onset of the coronavirus pandemic clobbered Nebraska’s agricultural economy.

The virus dealt producers a "one-two punch" of devastating conditions for Nebraska's core commodities. According to UNL's Bureau of Business Research, producers’ bottom lines expected to fall nearly a quarter this year (23%). Economists Sarah Curry and Jay Rempe of the Platte Institute, a free market thinktank, say the numbers suggest billions in federal coronavirus aid is keeping producers afloat statewide.

“The first punch came in March with the shutdown with the stay at home orders," Jay Rempe explained at a webinar summarizing the report.

With Americans largely quarantining at home, farmers and ethanol plants were stuck with an oversupply of product and nowhere to sell to.

Then, a blow to livestock producers. As spring wore on, COVID-19 began making its way into several meatpacking plants across the country. At least 20 meat processors in Nebraska saw outbreaks, with thousands of infections. Some plants were forced to close due to the breadth of their outbreaks.

"The problem was not that our farmers didn't have enough supply," said Curry. "The problem was the bottleneck within the supply chain, and the meatpacking plants, and their capacity to be able to handle everything."

That bottleneck created financial and logistical hurdles for producers.

"We had animals that were ready to be slaughtered that weren't able to be slaughtered," Rempe said.

"So that was extra feed cost for the animal, or farmers had to figure out what to do with their animals for for a period time."

Supply chain disruptions also gave way to massive dips in prices for cattle and hogs. Federal aid will save many farmers from a worse case scenario this year. Without payments, Rempe says, they could have seen up to $3.7 billion in losses: $1.1 billion in corn and soybeans, $971 million for beef producers, $166 million from the pork sector, nearly $66 million among dairies, and $8.7 million in losses for wheat growers.

“The estimates this year show government payments will make up about 35 to 50 percent of net farm income in the state of Nebraska this year," Rempe said. Agricultural businesses also received 19 percent of Nebraska's Paycheck Protection Program loans.

Congress allocated $16 billion in direct payments for farmers through the CARES Act in March. So far, the USDA has doled out over $710 million in aid to Nebraska's farmers. Cattle producers carry the day by a wide margin at $387 million, with corn growers trailing at nearly $234 million.

At a recent campaign event, President Trump promised another $14 billion to farmers in aid, though some of that money will likely come from leftover spring payments. The USDA plans to release data for a second wave of payments in the coming weeks.