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Agriculture could lose billions according to recent analysis | KTIC Radio

Agriculture could lose billions according to recent analysis

Agriculture could lose billions according to recent analysis
(steverts/iStock/Thinkstock)

The Nebraska Farm Bureau conducted an analysis recently on the impact of Covid-19 in agriculture. It found Nebraska could face a cumulative potential estimated loss of $3.7 billion this year in agriculture.

“We have seen debt loads increasing with problems in repayment, bankruptcies are creeping up, and working capital is low. So farmers are having some financial struggles coming into this year,” said Jay Rempe, senior economist with the Nebraska Farm Bureau.

Covid-19 has delayed or halted many typical transactions for producers in agriculture. Farmers were not able to sell their grain as they usually do, and ranchers also had problems with livestock of sales as the economy ground to a halt. 

In early May, the livestock industry received another blow when Covid-19 hit meatpacking facilities. At the beginning of 2020, both the cattle and the pork side were expecting record production. Demand was growing both domestically and overseas, and there was a large inventory of animals.

“When Covid came along, and we saw the demand shock from the restaurant and retail sector along with the processing industry, it was a double whammy to the livestock sector in Nebraska,” Rempe said. 

The major commodities in Nebraska ranged from a 5 percent drop with feeders to a 23 percent drop for corn. For corn, the potential estimated loss: $1.17 billion; cattle, $971 million; pork, $166.5 million; wheat, $8.7 million; ethanol $1.303 billion; and in dairy, $66.1 million.

The Nebraska Farm Bureau says the amount of time it might take for Nebraska’s agriculture to recover depends on two factors.

“Our economy is consumer-driven, 70 percent of our economy is related to consumer purchases,” Rempe said. “So we need folks to get back out and eating (at restaurants) and get back to normal. The other big factor is international trade and how quickly we can get our export markets up and going.”

Rempe added the estimates do not account for any financial assistance agriculture might receive through the CARES Act, farm program payments, or other means of financial assistance. The impacts are also not all-inclusive. There are other sectors of Nebraska agriculture acutely affected by the outbreak that is not included in the analysis. 

For more information visit  www.nefb.org/covid-19.

 

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