Pigs feeding

Roger Zylstra says there is only one word to describe the impact of COVID-19 on the ag community.

“Depressing,” he says. “A lot of people are really hurting.”

Zylstra, who farms near Lynnville, Iowa, in Jasper County, is president of the Iowa Corn Promotion Board. He has watched the price of corn plummet in the wake of the global pandemic that is also negatively affecting other commodity prices as well as the ethanol industry.

“Corn growers are really hurting,” Zylstra says. “At this point, most of us understand it’s going to come back and be better, but this is one of the bleakest times a lot of us have had to go through.”

He says demand for corn and soybeans remains strong in his area, thanks to an active livestock industry.

“We feed a lot of hogs around here, and they need feed,” Zylstra says. “We’re going to grow a big crop this year, and we believe demand will be there.”

With international travel banned in many parts of the world, trade becomes an issue. Dermot Hayes, an ag economist with Iowa State University, says the pork industry saw an early impact when China backed out of a large purchase nearly two weeks ago.

He says more cancellations will result in a backlog of pork and other commodities. That would affect the packing industry, likely in the form of reduced operational hours.

Hayes says if packing plant workers become ill and have to stay home, that creates a “very inefficient packing system.”

The ripple effect makes it difficult for farmers to lock in any prices.

“It’s too late for corn, beans, pork and beef,” Hayes says. “The futures market is faster than we are.”

He adds if China does not abide by the requirements of the phase one trade agreement, U.S. farmers could see additional challenges.

But for now, as schools and businesses began closing last week, a rush on grocery stores has meat and other commodities in hot demand. Angie Krieger, vice-president of domestic marketing with the National Pork Board, says her group is working to make sure pork is available to consumers.

“We are seeing a huge change in consumer behavior, so the challenge is keeping pork on the shelves,” she says. “People want to buy pork, so we are working on getting them the resources they need.”

She says with people staying home, products that may have gone to the food service industry are instead being sent to retailers.

The labor force is a concern, Krieger says. This includes the farm workforce, as well as supply delivery issues that may occur as a result of any disruptions in the trucking industry.

Krieger says the pork board has also adjusted its marketing strategy in the wake of the COVID-19 outbreak.

“Over the course of the weekend, we re-formatted our marketing plan to include those resources consumers need on how to prepare pork and all the different cuts,” she says. “We also want them to know they can find a lot of information at pork.org.”

On March 19, the Iowa Cattlemen’s Association requested a stimulus package to help cattle producers.

“We’ve heard from our members across the state that the market fall-out from COVID-19 has put the future of their family farms at risk,” said CEO Matt Deppe in a news release. “This ‘black swan’ event comes just a few months after a similar market crash in August following the Tyson plant fire in Holcomb, Kansas.”

Deppe said boxed beef prices have increased, while fed cattle trade and live cattle futures markets have plummeted. Concerns over future beef demand, availability of feedstuffs, and potential processing disruptions have added to uncertainty in the beef community.

Beyond COVID-19, the squabble between Russia and Saudi Arabia over crude oil has gasoline prices and ethanol demand dropping, says Chad Hart, Extension ag economist with Iowa State University.

“That’s part of the reason we are seeing more instability in the corn market than in the soybean market,” he says.

Hart says nearly all of agriculture is in the process of figuring out what the future could bring. He adds he does not believe planting intentions will change because of the volatility in the market.

“I wouldn’t even be looking at new crop prices at the moment,” Hart says. “Time is still on our side.”

Zylstra says while many in the workforce are working at home to lessen the spread of COVID-19, farmers are preparing for spring planting.

“We realize we are going to have some good pricing opportunities this year,” he says. “We need to settle down. This is going to have a major impact on our economy, but it’s still pretty much business as normal in rural Iowa.”

Jeff DeYoung is livestock editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.