More than half of the Saskatchewan farmers who responded to an on-line survey last week said they are bracing for reduced farmgate revenue and lower commodity prices as a result of the COVID-19 pandemic.
The survey, conducted by the Agricultural Producers Association of Saskatchewan (APAS) suggested that 68 out of 128 survey respondents (55 percent) expect lower revenues for the farm commodities they produce and reduced prices.
Market volatility and the impacts of a global recession were the most prevalent concerns cited by survey respondents, followed by disruptions in the commodity supply chain, the survey added.
The APAS survey is updated weekly, with results available on-line here.
“I think it (the financial impact) … really depends on what commodity you’re talking about,” said APAS president Todd Lewis.
“I think more and more, in the livestock sector, you’re going to see some fluctuations in price due to plant closures and so on….”
COVID-19 is already affecting slaughter and processing plants in Canada and the United States, resulting in plant closures, staff layoffs, shift reductions and reduced processing capacity.
Demand for meat products has also been affected by restaurant closures and changing consumer trends at grocery stores.
Lewis said disruptions at meat processing plants is expected to cause price fluctuations and uncertainty in the marketplace for cow-calf producers and feedlots.
“Without question we’re going to see some variability… in the next weeks and months,” he said.
However, not all farm commodities are fetching lower prices.
On the grain side, the industry has seen some market strength, particularly in the pulse crops sector.
In pulses, “we’ve seen some increase in demand and some support for prices, but at the same time, there’s a lot of talk about the availability of (shipping) containers and not being able to ship product,” Lewis said.
“So, it’s a real mixed bag… and I think the survey results speak to the uncertainty that’s in agriculture right now and throughout the whole economy.”
Lewis also mentioned the availability of farm labour as a prevalent issue for some growers, including producers of fruits and vegetables.
Problems with poor rural internet and cellphone service has also been identified as a key area of concern, particularly now that more people are working and studying from home, he said.
“It (COVID) has really shined a spotlight on the weaknesses here,” Lewis said.
“Between cost and really poor service, it’s going to end up being a comparative disadvantage for us, in fact we’re probably there already. So we have to get it remedied as soon as possible.”
Lewis said APAS and other farm organizations have been working together to ensure that vulnerabilities in the Canadian agriculture sector are understood by federal and provincial governments.
Canadian consumers who are starting to see empty shelves in the supermarket and shortages of some food staples are beginning to reassess their views on domestic food security.
“I think the public is starting to turn their attention toward food security and supply and safety,” he said.
“I think there’s a growing recognition that if we want to have a safe and reliable food supply, we have to be growing it here in Canada.”
In horticulture, Lewis said significant disruptions in domestic or North American production, due to lack of labour or other factors, could mean that some products won’t be available to grocery buyers this year.
Especially in the horticulture sector, “if it’s not planted and grown here in Canada, then there’s a chance that it might not be available come August or September on our supermarket shelves….”