May 18, 2020

Virginia Tech report finds initial COVID-19 impact on farmers ominous

The story of how the U.S. copes with the coronavirus pandemic is in its early chapters, as Virginia’s agricultural producers hold out for a happier ending.

A recently released report from the Virginia Tech College of Agriculture and Life Sciences Department of Agricultural and Applied Economics provides an overview of the coronavirus pandemic’s disruptions to the national food supply chain and Virginia agriculture. The overall analysis is ominous, with a few bright spots.

“We are experiencing the challenge of a lifetime,” said Wilmer Stoneman, vice president of agriculture, development and innovation for Virginia Farm Bureau Federation. “Our food system is being tested from top to bottom with an unknown duration. However, Virginia farmers are still farming. They are planting seed and caring for their livestock to do their part for their communities.”

U.S. food consumption has remained the same since the onset of social distancing requirements, but how Americans buy it has changed. Grocery spending has increased by $14.4 billion, while purchases of restaurant food have shrunk by $3.9 billion. This affects what food varieties are consumed, impacting industries like aquaculture. According to the report, 98% of mollusk farmers indicated they have lost sales due to COVID-19.

“Another widely discussed example of a similar problem is how school closures have led to substantially reduced demand for milk,” said Dr. John Bovay, assistant professor in the CALS department. “Different distribution channels and different packaging requirements are an important consideration here.”

The analysis reported turbulence in livestock, poultry and dairy markets with retail demand increasing and farm prices decreasing, driven by reduced capacity at processing plants and reduced demand by institutional buyers.

“Although all meat and poultry plants in Virginia remain open, the national market situation is bleak,” Bovay continued. “Prices for hogs and cattle are also down significantly.”

Depressed livestock prices also have reduced demand and prices for feed.

But it’s not all bad news. The green industry might see a boost, with more home gardeners growing food and enhancing their landscapes. Prices for meat, poultry, dairy and produce will be bolstered somewhat by a new federal commodity-buying program. The U.S. Department of Agriculture’s Coronavirus Food Assistance Program intends to purchase and distribute U.S. agricultural products to help compensate for the food chain oversupply.

“Pre-pandemic volatility in farm prices has been amplified manifold,” Stoneman said. “We are grateful for the help heading our way from many sources, including our leaders in Washington.”

Farmers markets, wineries, breweries and distilleries have taken a hit but have invented new ways to serve Virginians.

“The pandemic is forcing businesses and policymakers to adopt new marketing strategies and regulations,” Bovay said. “And some of these changes may be good for business in the long run.”

– Wilmer Stoneman, Virginia Farm Bureau News