Before we take the next unsteady step into a very different future, let’s make sure it’s not a step off the plank.
How? We can start with disciplined decision-making: Use proven facts, lean on practical experience, and focus on what is safe and smart.
That latter part is especially important because if you farm or ranch, spring is a season loaded with risk — market, financial, physical, and weather to name a few. The last thing you and your family need now is avoidable COVID-19 risk.
And, sure, officials will debate plans and dates to “reopen.” The more important plan, however, is the one you and your family have, because no one can ensure your safety better than you.
All that said, COVID-19 continues to sicken, while also cracking global markets.
No one, for example, ever dreamed that crude oil futures could fall to zero, then to -US$37, before struggling back to US$10 per barrel.
Likewise, on Jan. 1 no one could have predicted that in 120 days corn prices would be down 25 per cent, soybeans off 15 per cent, cattle smacked for 30 per cent and the hog market simply blown apart.
Disaster is too small a word.
While Canadian readers might look on enviously, also too small is the U.S. federal government’s recently announced disaster assistance program. Even though the U.S. Department of Agriculture’s (USDA) initial package totals US$16 billion in direct assistance to farmers and ranchers the money won’t cover today’s estimated US$20-billion virus-fuelled drop in 2020 net farm income.
That estimate, announced in mid-April by the University of Missouri’s Food and Agricultural Policy Research Institute, was calculated before several Midwestern hog- and cattle-slaughtering plants began a series of rolling shutdowns to clean their facilities and clean up their acts.
More incredible, excluded is ethanol, an economic mainstay of many rural communities and a one-time favourite, now mongrel of the White House. As of April 20, according to the Renewable Fuels Association, 73 of the U.S.’s 200 ethanol plants are “idled” and 71 others are running at “reduced rates.”
That shattering collapse is hitting the corn market, its principle feedstock, like a wrecking ball. On April 21, just four days after USDA’s bailout announcement, the National Corn Growers Association released a study that indicated U.S. corn growers had lost US$50 per acre in 2020 revenue since COVID-19 hit the U.S. on March 1.
That means U.S. corn growers alone have seen an almost US$5-billion drop in gross income in less than two months.
Worse, the just-announced USDA bailout includes only US$3.9 billion in market assistance for all row crops, not just corn, even though corn could take every penny on its own and still not cover its recent losses.
So, yes, expect another round of bailout money. And think big, really big. Think the-sky-is-the-limit big. Canadian readers can draw their own conclusions about what’s necessary from their government.
So, farmers and ranchers need billions more in bailout funds as agriculture continues to stumble, rural and urban Americans need millions more COVID-19 tests before any level of safety can be assured, and everyone everywhere needs a more reliable, more resilient, more safe food system.
And all needs to be done now. How?
By starting now. More on that soon.
The Farm & Food File is published weekly in newspapers throughout the U.S. and Canada.