Coronavirus Hits Farmers
Farmers in the U.S. have faced numerous challenges over the last few years. The U.S.-China trade war, poor harvests from flooding or heat and bankruptcies, just to name a few.
U.S. farm debt is projected to reach a record high of $416 billion, according to the U.S. Department of Agriculture. Adjusted for inflation, the current farm debt is just below the 1980 record of $431.6 billion. U.S. farm bankruptcies jumped nearly 25% last year to levels not seen since 2011.
Specialty farmers such as dairy and citrus have also been getting crushed. Some of the largest dairy farms have gone bankrupt over the last year as consumers' preferences shift. According to the U.S. Department of Agriculture, the U.S. lost 2,731 licensed dairy farms from 2017 to 2018. The total number of dairy farms now stands at 37,468, with Borden noting that 94,000 dairy farms have stopped producing milk since 1992.
Citrus farms, particularly in Florida, have been devastated by citrus greening disease. Since it hit the state in 2005, nearly 5,000 of the 7,000 farms growing citrus have gone out of business. It's estimated the disease cost Florida 34,000 jobs in the 10 years after it first hit.
With the coronavirus taking its toll on the U.S. economy, farmers are facing another devastating year. The coronavirus has caused agricultural commodity prices to collapse and raised concerns over labor shortages.
"We were already under extreme financial pressure. With the virus sending the prices down — it’s getting to be the straw that broke the camel’s back," said Iowa farmer Robb Ewoldt. "We were hoping for something good this year, but this virus has stopped all our markets."
As a result of the coronavirus, much of the labor from Mexico farms depend on will not be allowed into the U.S. Farm trade groups are now pushing the Trump administration to allow temporary visas for farm workers from Mexico.
Prices of commodities such as corn, soybean, wheat, lean hogs, milk and cattle have all plummeted over the last few weeks. With restaurants and schools closing, as well as consumers stockpiling nonperishable goods, demand for these products has declined.
Corn farmers are getting hit even harder as ethanol prices have also fallen. Ethanol, which uses corn as a primary input, has seen demand take a hit as a result of a reduction in driving.
Ewoldt, who farms soybeans and corn, says the trade war, weather and lack of capital has made farming "not profitable anymore." Pointing to how the struggles for farmers keep compounding, Ewoldt said "We’ve stopped saying it can’t get worse."
U.S. livestock producers have asked the Department of Agriculture to let them delay payments of government loans. The $2 trillion coronavirus relief bill signed Friday adds $14 billion to the Agriculture Department’s Commodity Credit Corp (CCC) spending authority and provides $9.5 billion to farmers.
That may not be enough, however. The National Cattlemen’s Beef Association has already asked Congress to increase the CCC's spending authority to $50 billion as cattle and other commodity prices continue to fall.
As this vital part of the U.S. economy continues to take blow after blow, farm debt and farm closures are likely to continue to increase. Despite being told by U.S. President Donald Trump last year to "Start thinking about getting bigger tractors," farmers are facing much larger problems.
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