Farmers have been hit hard for years. Now the COVID-19 pandemic has turned an already uncertain time into a crisis.
At a webinar hosted by the Platte Institute on Wednesday morning, Jay Rempe, an economist with the Nebraska Farm Bureau, offered scenarios for what could happen to farmers and ranchers this year.
Rempe said losses could total more than $2 billion, which is about 10% of all the income generated by agriculture in Nebraska.
But Rempe cautioned that this was not a definitive forecast, but rather a look at the possibilities.
“There’s still a long year ahead,” he said.
Ethanol producers are also suffering, as at least 11 plants have closed in Nebraska, which could lead to losses of about $3 billion.
There are also issues with the supply chain as meatpacking facilities close and reduce their intake.
Rempe said this creates a bottleneck, as producers try to sell their product and restaurants and stores try to buy what little product they are producing.
“Restaurant sales declined significantly, but grocery sales doubled just about overnight,” Rempe said. “But these are separate supply chains, and they have to keep up with the new demands.”
Because of the supply chain issues, this has led to some products like milk going unused and animals having to be euthanized.
“When a piglet or calf is born, a clock starts,” Rempe said.
Livestock have to be slaughtered at a certain predetermined point in their lives, and when they can’t be used by the meatpacking facilities, there isn’t much choice for the meatpackers or the farmer.
Rempe was joined by Tom Sell, former deputy chief of staff for the House Committee on Agriculture, where he was instrumental in crafting the 2002 Farm Bill.
Sell said if it weren't for the strong agricultural programs already in place, the COVID-19 crisis would be much worse.
“We’ve always had a strong, deliberate ag policy in this country,” Sell said. “In addition to economic insecurity, farmers are considered essential components to our economy and continue to work with risks to their personal health.”
He said that as national debt piles up and the government moves beyond the coronavirus relief packages, ag programs will come under scrutiny and ag groups will have to work hard to defend them.
“For every $100 in taxes paid, about a quarter (25 cents) goes to all of the ag programs,” Sell said. “That’s a great return on investment for the stability the farmers give this country. … But we live in a democracy, and there’s less and less of us. We have to keep working for strong ag policies.”