Having had to endure hardship for a number of years now given the US-China trade war has put numerous US farms out of business coupled with record flooding and heat waves in the Midwest has made the situation worse.
Those factors were already a recipe for disaster. With the Coronavirus further changing the farming sector challenges quickly. The demand for beef, fish, and chicken has dropped mainly due to the closure of restaurants around the Country. Prices for crop and livestock have plummeted.
People are opting for cheaper and less perishable foods like pasta and beans at grocery stores.
Iowa farmer Robb Ewoldt said “We were already under extreme financial pressure. With the virus sending the prices down — it’s getting to be the straw that broke the camel’s back,”
This virus has dealt a cruel blow just before planting season which starts in April. The Trump administration has restricted access to stop the spread of the virus especially from Mexico which provides a source of cheap labour for farms in the US.
The issue is the prolonged shutdown of the Country, rendering the situation to be focused around how long the farmers can sustain loses like this.
Corn farmers are getting hit especially hard. A combination of low oil prices and a sudden reduction in driving across the country has cut demand for ethanol. Corn is a primary input in ethanol production.
As demand and process fall farmers are forced to farm less of their land in order to control costs and that spirals into further loses and the vicious cycle continues. This has created considerable loses within the farming sector and making it impossible for the farmers to continue.
Will the Trump administration offer some respite with a bailout after the end of this year’s harvest ? So far $14 billion has been allocated to the Agriculture Department’s Commodity Credit Corp (CCC) spending authority. It provides another $9.5 billion for farmers hurt by the pandemic.
However the farmers have recently written explaining that with commodity prices falling the relief might not be enough to save many of them.