Economists: Coronavirus recovery will be slow

By Jeff Brown and DeLoss Jahnke

Evidence that social distancing is helping flatten the curve on the spread of COVID-19 is starting to throw some support to the stock market. But that doesn’t mean the economy will bounce back to normal anytime soon, including in agriculture.

“There’s optimism that we’re bending around the corner on this, but I think we still have a long road to recovery, especially on the ag side,” American Farm Bureau Federation Chief Economist John Newton told the RFD Radio Network.

Another 6.6 million Americans filed for unemployment last week, according to numbers released Thursday. In total, that’s nearly 17 million who’ve lost their jobs since most people were told to stay home.

“That means that in three weeks, we've lost 10 percent of the employed base in the United States,” said University of Illinois ag economist Scott Irwin. “One out of every 10 people have lost their jobs in the last three weeks. It's really mindboggling that something like that could happen over such a short amount of time.”

Social distancing could last at least into May, which means unemployment is likely to remain high at least that long. Despite the federal Coronavirus Aid, Relief and Economic Security Act, some of those jobs might even be lost forever.

And once shelter-in-place orders end, some people won’t return to eating out overnight because they just won’t have the money, Newton said.

For agriculture, that’s a problem because more than half of all food is consumed outside the home, translating into lost demand for farmers who produce meat, dairy and more.

“Right now, with all the folks that have asked for aid – specialty crop, cattle, dairy, ethanol – USDA doesn’t have enough money right now for all the aid requests that have come in,” Newton said.

Meanwhile, the transfer of food demand away from restaurants has resulted in supply chain bottlenecks and empty supermarket shelves and meat cases.

AFBF president Zippy Duvall told USA Today that U.S. farmers are capable of producing enough food to feed Americans, but logistics are getting in the way.

"There’s a lot of things that happen to the food before it gets to the consumer, whether it be in processing or transportation,” he said. “If this thing was to get worse, what problems come along with that? None of us really know."

Newton noted AFBF has been active in meeting with organizations that have a stake in the food supply chain, from grocery chains on lifting milk-buying limits to the Commodity Futures Trading Commission on meat prices to USDA and more.

Illinois Farm Bureau also remains engaged in conversations at the state and local levels. Visit ilfb.org/covid19 for resources farmers can use during the COVID-19 pandemic.

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