How Will Coronavirus Impact U.S. Agriculture?
March 9, 2020 A couple of weeks ago, I spent time at the 24th annual Commodity Classic show in San Antonio, TX. The event was well attended, with more than 9,000 visitors coming to see and hear about the latest agricultural news heading into the 2020 growing season. For the most part, people seemed interested in talking about how the recent U.S.-China Phase One trade agreement might re-energize the market following all the export uncertainty that dominated most of the 2019 growing season. Many also commented on the keynote address by Secretary of Agriculture Sonny Perdue where he discussed agricultural trade and how the coming of 5G communications might affect agriculture technology trends over the next year or so.
Yet, although it wasn’t on any of the speaking programs at the 2020 Commodity Classic, the spreading coronavirus situation did enter into many conversations on the show floor. For the most part, attendees seemed confident that U.S. agriculture should be “okay overall” when it comes to avoiding the novel virus itself. However, there are potential problems ahead.
Loading ...One would be in the country where coronavirus got its start, China. According to news sources, almost 3,000 people in the country have died from the disease and thousands more have been sickened. By extension, this has disrupted the business supply chain in China, preventing commodity transportation from taking place. Based upon these disruptions, Rabobank predicts Chinese soy oil consumption this year will fall 7% and soybean meal consumption will drop 4% during the first half of 2020.
Even Perdue seemed to sound an alarm bell during his Commodity Classic speech regarding coronavirus, calling it a “pandemic” (although he didn’t linger on the word). “Hopefully, we can get past this coronavirus pandemic very quickly and get back to the trade,” he said.
Obviously, the next few months will clear up a lot of this uncertainty for U.S. agriculture. But at the moment, things seem a bit more unsettled than most people are probably comfortable with.
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