CoBank Quarterly: coronavirus pandemic and economic restrictions upend markets, industries and communities

Labour and supply chains among the biggest challenges facing essential rural industries both in the US and globally.
calendar icon 6 April 2020
clock icon 2 minute read

COVID-19 has brought the US economy to a screeching halt, ushering in a recession in the process. For most businesses, the sudden stop to the economy is more jolting than the financial crisis of 2008 and has forced hard, immediate decisions about employees and finances. According to a new Quarterly report from CoBank’s Knowledge Exchange, COVID-19 has also underscored the critically important nature of agriculture and other industries essential to rural America.

“This quarter will largely define the next year in terms of the economy and how severe the damage caused by the coronavirus will be,” said Dan Kowalski, vice president, Knowledge Exchange, CoBank.

“Nearly everyone will be impacted to varying degrees and the pace of the recovery will be uneven. But the economy had been on good footing and it’s entirely possible that we can get back to reasonable strength within a few quarters.”

The US cattle complex has seen a swift and sharp decline in the last month following the drop in global equities and oil prices. Since mid-January, April live cattle futures have fallen by approximately 25 percent. The beef complex profit pool is shifting in favor of packers at the cost of lower feeding margins. The loss of restaurant and food service customers due to COVID-19 will test beef prices this spring.

Milk prices have fallen precipitously in recent weeks due to COVID-19. The seasonal increase in milk supplies with the spring flush was met with economic weakness in China and other countries, impacting dairy exports. School closings have impacted fluid milk consumption. Home stockpiling has provided some price support, but not enough to offset the losses related to food service.

The full Quarterly report is available here.

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