The current state of affairs puts farmers in a tricky situation — one requiring resiliency and innovation. COVID-19 has impacted the agricultural industry from production to distribution. Across the whole supply chain, the industry is experiencing disruptions that will have a lasting impact on the food economy.
Production is currently not feeling the same effects as distribution, but it is seeing a surplus of goods that need new routes to the consumer. For example, with so many businesses and schools shut down, dairy farmers are experiencing a 28% drop in milk prices.
To remain diligent and productive during this challenging time, farmers and ranchers across the United States and banding together with the hashtag #StillFarming. This movement is a message to the general public that farmers are an essential part of our economy and remain vital to our daily existence. People need food, and they need farmers to grow it. The coronavirus may prove a severe storm to weather, but the agricultural industry is working tirelessly to find solutions.
From large-scale farms to the homestead down the road, COVID-19 forces farmers to adjust their businesses. Safety, labor, and equipment are the main three focuses on how to navigate this situation successfully. Preparing for the weeks ahead requires taking precautionary measures to protect workers, secure the correct equipment for the upcoming season and prepare for possible labor shortages.
Safety is the No. 1 concern of any business during this time, regardless of the industry. For agricultural enterprises, it is incredibly important both for workers and consumers to be protected. Maintaining safety standards throughout the supply chain is the best method of prevention.
The leading way farms are handling safety right now is by implementing preventative measures to decrease the chances of spreading disease. Adhering to the Centers for Disease Control and Prevention’s (CDC) standards for hand washing and social distancing are two examples of this. It is essential to use proactive safety measures, whether agriculturists are dealing with workers in the field or employees in processing facilities and distribution centers.
Labor shortages plagued the agricultural industry long before the global pandemic came into action. Labor during this time is quite tricky, especially for fresh crops that growers can’t harvest with automated machinery. There’s the issue of working in close physical contact with other workers, but there is also the problem of undocumented and H-2A workers.
The concentration of the produce supply in the United States, for example, presents a potential issue. California produces most of the U.S.’s fruits and vegetables. Most California farms are incredibly consolidated, with more than 90% of the U.S. supply of walnuts, kiwis, plums, celery, and garlic grown in the state. This lack of diversification makes these farms less resilient in the face of disaster. If employees at one farm become infected, the entire country feels the impact on staple crops.
There is also an issue in that over half of U.S. farm laborers are not citizens. Most workers, especially in produce fields, are undocumented and H-2A employees. H-2A workers are certified to work seasonally in the U.S. Still, they reside in other countries, a practice that may become more difficult due to travel restrictions and the fear of potential disease encounters.
There is also concern about protection for farmworkers, since many are not eligible for federal unemployment insurance benefits and do not have access to adequate healthcare.
Farm production may not feel the COVID-19 impacts for a while. Still, as agribusinesses are unable to consult physically with farmers on new equipment or other technical aspects of their businesses, it may be more challenging to access support. However, many large distributors are looking to support farmers by providing used or rental equipment. This practice aids the industry in securing necessary machinery at reduced costs.
Farms may also need to invest in additional materials to adhere to safety measures in the following months. Along with physical equipment, farmers may turn to alternative digital solutions to manage business remotely, engage with customers online or conduct other forms of required communication. Many farms are adjusting on short notice to a new way of doing business — an entirely digital one.
Resiliency in the Agriculture Sector
COVID-19’s impact on agriculture is unique in that it will affect both large commodity crop producers and small specialty farmers. Soy and corn prices have dropped significantly, and the global economy is feeling the strain on both the dairy and pork industries. Similarly, small producers who may have sold to restaurants or other nonessential businesses must come up with a new business strategy to get food to consumers.
The COVID-19 crisis creates an excellent opportunity for farm enterprises. Particular vulnerabilities in traditional systems are exposed as consolidated farms look to diversify. As people seek to improve their health and pay more attention to their food, organic sales may go up. With people looking to support local businesses now more than ever, small and diversified farms may see an uptick in sales due to unprecedented interest.
The food supply chain is complicated, and farmers are only one piece in an intricate system that supplies food to consumers. While many unknown challenges lie ahead, farmers are focusing on safer working conditions, stable labor supply and access to the right equipment to ensure the supply chain is not interrupted.
Holly Welles is a real estate writer who covers the latest market trends in everything from residential to commercial spaces. She is the editor behind her own blog, The Estate Update, and curates more advice on Twitter.