WYO-BRASKA – Production agriculture occupies a special place in the world economy.
Most have a picture in their mind of the farmer – alone in the tractor, cultivating and planting by themselves in the field. There’s the image of the cattleman or cattlewoman, alone in the truck – maybe a faithful dog by their side – as they drive through the pasture, checking on their herd.
It’s that solitary lifestyle – almost a built-in version of the ‘social distancing’ that’s becoming the new watchword in the days of COVID-19 – that could help producers weather the current storm.
“I’ve kind of chosen to be self-isolated now,” said Ivan Rush of Scottsbluff, a retired University of Nebraska extension beef specialist who still raised cattle and sheep west of town. “I can take care of the cattle and sheep, start planning for planting, and I can get along just fine. As long as the suppliers keep on coming.”
But, as confident in survival as producers may be, there’s another side to the equation – markets. Rush, who works with the Nebraska Beef Council while staying informed on national and international commodities, said there’s still a disparity, one that’s growing almost daily
The ongoing pandemic “certainly has already had an impact, and it will continue to have a negative impact on producers,” he said. “Especially the economics.
“As many producers are, I’m very upset and concerned with the disparity in price for producers versus the packing industry,” Rush said. “They’re making record profits and we’re losing money.”
But the processing facilities aren’t immune to the effects of COVID-19. The potential for illness among the sometimes-large workforces at those facilities could mean animals stay on ranches or feedlots when there aren’t enough workers to process, said Cole Ehmke, a rural entrepreneurship specialist with the University of Wyoming Extension Service.
“Many animals are taken to slaughter based on certain size or weight. So there may be processing challenges later on,” Ehmke said. “This will also mean producers will have to make larger investments in feeding and maintaining the health of the animals.”
This new virus isn’t just touching the livestock industry. It’s also hitting crop producers, said Andy Groskopf, district representative for western Nebraska on the board of directors of the Nebraska Corn Board.
“It’s going to drive our markets down terribly,” Groskopf said. “It’s closing down, it’s slowing up the production of ethanol. That’s really hurting us bad.”
It’s almost too early in the season to determine what, if any, impacts the virus and consequent shutdowns might have on planting. So far, the current situation hasn’t caused problems with booking seed or getting supplies delivered, for example, they said.
But, like anything in production agriculture, the future remains in flux.
“At this point, I’m not seeing any disruptions,” Rush said. “But if the feed stores start to decide or the infrastructure starts to decide to shut down and not provide service – I don’t see that happening right now. I don’t want to see it happen for obvious reasons.”
Ehmke at UW is also concerned about both sides of the supply chain. Falling commodity prices could have a negative impact on producers with spring contracts for grain, for example, he said. And a potential manpower shortage could affect harvest across much of the wheat belt.
“And it seems likely there will be a manpower shortage,” Ehmke said. “Custom harvesters for wheat often draw crews from countries such as Australia and South Africa who may not be able to get here. Labor will likely be an issue for producers of fresh vegetables for farmers markets and horticultural products as the spring develops.”
Interrupted logistics could delay needed supplies of fertilizer, chemicals and seed, especially as planting time nears for some spring crops like corn, he said.
“I’d guess that things are okay for the next month with the supplies on hand, but uncertainty is an issue after that,” said Ehmke. “If truckers stay home, then our ability to move products may be an issue. And some technical ingredients come from China.”
For the time being, both the Nebraska Corn Board and the Nebraska Beef Council are planning how they’ll respond, should the situation worsen, and taking an almost ‘wait-and-see’ approach, Rush and Groskopf said. But there are a few bright spots emerging from the doom and gloom gripping the planet today.
Fuel prices, for example, are decreasing, Groskopf said. That means the diesel producers need to run their myriad machines is cheap, which will help out on the other end – the all-important bottom line.
But having plenty of relatively inexpensive fuel won’t help if a tractor goes down and nobody will come out to fix it, he said.
“The availability of services is going to be the worst part,” Groskopf said. “As time goes on, I think it will be harder to find somebody to come out and do the actual service or repair itself.
“It’s a crazy situation,” he said. “I never thought I’d see something like this in my life.”
Rush agreed: “It’s an interesting time. You can paint a pretty bleak picture if you want to be pessimistic.
“I’m not saying it’s not devastating, but in the grand scheme of things, we’re still a pretty healthy nation,” he said. “But it’s a scary time right now.”
And Rush is concerned that, on top of that price disparity between producer and processor, consumers might not start buying meat again quickly, once the crisis passes. With all the panic buying going on in the early days of the pandemic, he worries people with freezers full of meat might not come back to the stores as soon.
“I’ve been asking my fellow (Nebraska Beef Council) board members, ‘What’s our best response when we do all we can for beef demand?’” he said. “Once we come through this, there are going to be quite a few people who bought ahead on beef products.
“We need to continue to work on demand,” Rush said. “I think, when we get through this, I think we’re going to see a slowdown.”
Emhke agreed: “The future gets cloudier if the human factor of panic buying is added – which creates an incentive for reasonable people to buy before there is none left.
“While the run on toilet paper was irrational since the usage rate hasn’t changed, it may be more difficult for pesticide applicators to find the needed respirators required for use with some pesticide products,” he said.
Rush also cautioned his fellow producers against succumbing to the same, panic-buy mentality when it comes to their need for supplies.
“I don’t want to see our industry go the toilet paper route and start hoarding,” Rush said. “If the worst comes to the worst, we’ll be able to survive that.”
Editor’s note: Some information in this article was gleaned from a press release written by Steve Miller, editor at University of Wyoming AgNews Service, www.uwagnews.com.