Farmers’ woes are being cited in key U.S. economic reports as COVID-19’s wide-ranging effects show up in data.
“Contacts reported disruptions in the supply chain for meats, dairy and vegetables,” said the U.S. Federal Reserve Board’s upper Midwest district, quoted in the Fed’s May 2020 Beige Book commentary on economic data.
Across the U.S., the impacts of the pandemic have been felt, adding to the already weak financial situations for farmers.
“Agricultural conditions softened,” said the southeastern district, which contains significant production states like Florida and Georgia.
In the central Midwest, livestock and crop producers faced worsening market conditions.
“Contacts reported that transportation and warehousing costs have increased and supply chain issues are affecting many producers,” said that region’s Fed office.
It also saw variable impacts from the pandemic, including more demand for meat from small slaughter plants as big ones had trouble staying in production, as well as rice producers seeing increased demand.
“Meanwhile, cotton and other row crop producers reported lessened demand and continued low commodity prices, making profitability a challenge.”
The Minneapolis Fed, which covers the Great Plains states, said “district agricultural conditions worsened…. More than two-thirds of ninth district agricultural lenders reported that farm incomes decreased in the previous three months relative to a year earlier, with a similar share reporting decreased capital spending.”
Conditions were bad across most of the western corn belt’s main farming sectors.
“As disruptions in meat and food supply chains worsened and a substantial slowdown in ethanol production continued, cattle and corn prices declined sharply through early May,” said the Kansas City Fed in the report.
“Contacts reported that weak market conditions likely will have major implications for producer cash flows in coming months.”
U.S. farmers are in generally worse shape than Canadian farmers because of the long-term weakness of the loonie and the continuing strength of the U.S. dollar. Since the pandemic crisis began, the U.S. greenback has significantly strengthened.
The Beige Book is seen as a treasure trove of key data about the American economy and eagerly consumed by analysts and economists.