Hi, Dan Kowalski here, from CoBank’s Knowledge
Exchange research group. I wanted to provide
a brief update on some of the things we’re
watching amidst the COVID-19 crisis.
In agriculture, the price impacts are as serious
as feared – ethanol, dairy, cotton, and
the animal protein sectors are feeling the
worst of the price pressures.
And the causes vary from the collapse of the
crude oil market, to the loss of foodservice
sales and general economic weakness.
Unfortunately, we expect price pressures to
be persistent through the spring before starting to
improve during the summer months.
Supply chain impacts are most severe for the
labor-intensive industries, and that means
specialty crops and animal protein.
Worker shortages are slowing meat production
and crop harvests.
The difference is that meat supplies are at
an all-time high, climbing about 7% in Q1.
Specialty crops are mostly perishable, and
right now, dependence on food service channels
or labor for harvest, translates to major
revenue losses.
Beyond agriculture, we’re concerned about
the challenges facing rural healthcare.
Rural healthcare providers have been hit hard
by the recent reduction in elective procedures,
and if or when the pandemic hits rural hospitals,
they will struggle to provide care for the
influx of patients.
Estimates show that rural counties have only
5,600 ICU beds across the entire country.
For the general economy, we expect more fiscal
relief from Congress in the coming weeks as
applications for small business loans exhaust
initial funding.
Credit delinquencies will grow for many individuals
and smaller companies as bills are left unpaid.
And we expect economic impacts to last long
after businesses reopen – it will take time
for people to feel safe and to return to a
pre-pandemic lifestyle.
And that will keep GDP and employment from
fully recovering for several quarters.
The number of U.S. COVID cases will likely
peak soon, but there is a good chance of mini-spikes
of infection after the shutdown officially
ends, and that risk will make people wary.
It’s that post-reopening behavior that will
be very hard to predict, and will also lead
to economic uncertainty for quite a while
longer.
