Coronavirus hits already struggling US farmers: ‘We’ve stopped saying it can’t get worse’

U.S. farmers have endured a slew of financial hardships over the past few years. 

The U.S.-China trade war sent scores of farmers out of business. Record flooding inundated farmland and destroyed harvests. And a blistering heat wave stunted crop growth in the Midwest. 

Now, the coronavirus pandemic has dealt another blow to a vulnerable farm economy, sending crop and livestock prices tumbling and raising concerns about sudden 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,” he said. 

Farmers are worried about labor shortages right before planting season starts in April. In an effort to curb the spread, the Trump administration recently restricted immigration from Mexico — a key source for cheap farm labor in the U.S. 

Farm trade groups are lobbying the administration to provide financial aid for farmers enduring price drops, as well as temporary work visas for seasonal farm workers from Mexico.

But panic is surging as more states shutter businesses and order people to stay mostly indoors. Consumer demand for items like beef, chicken and fish has dropped as restaurants close indefinitely. More people are opting for cheaper, nonperishable goods like pasta and beans at grocery stores. 

“It’s not looking good. Product can’t be moved. Farmers are very concerned,” said Aubrey Onley, a farmer in Perquimans County, North Carolina.

The numbers are grim: Corn futures have declined almost 10%, soybean futures more than 4% and wheat futures nearly 2% in the past several weeks. Futures prices for lean hogs have dropped 12% in the past two weeks and prices for cattle have declined nearly 13%. 

Dairy prices have also fallen as school cafeterias and fast-food restaurants shutter, though grocery sales have surged. But milk prices are expected to fall by as much as 25% this year, a serious blow to milk makers already grappling with record low prices. 

“It comes down to every business’s ability to absorb loss,” said upstate New York dairy farmer Nathan Chittenden. “All those coffeehouse and restaurants closing in the city not using cream is a huge hit to us.” 

Chittenden depends on truck drivers to pick up milk from his farm every day. But he’s worried about possibly losing that service as infections surge in the state. “We are used to temporary uncertainty,” he said, citing weather disasters that affect operations. “But not this prolonged situation.” 

Corn farmers are getting hit especially hard. A combination of low oil prices and a sudden reduction in driving across the country has cut demand for ethanol. Corn is a primary input in ethanol production. 

Ewoldt, the Iowa corn and soybean farmer, said he doesn’t have the capital to continue farming the same amount of land, especially since lenders have less money to provide farmers amid the price drops.

He’s decided to farm on less land this year because he can’t afford to rent it out the usual acreage, and is already in two years of debt exacerbated from trade war tariffs and climate-related disasters. 

“We’ve stopped saying it can’t get worse,” Ewoldt said, adding that several years of financial losses coupled with the price drops from the virus have made farm operations impossible.

“Our corn operation is not profitable anymore,” he said. “It’s not profitable.”

Article source: https://www.cnbc.com/2020/03/28/coronavirus-hits-already-struggling-us-farmers-with-drop-in-prices.html