The Two Phases of Agriculture in 2020 . . . So Far
May 6, 2020 I know the calendar only says May at this point, but 2020 has already seemed like an incredibly long year! Of course, a big reason for this is because of how much has happened in (and to) the world during the first 120 days.
Take some recent history, for instance. Back in late February (which in many ways already seems like years ago, relatively speaking), as I attended the 2020 Commodity Classic, agriculture was buzzing with plenty of positive vibes. Coming off the unending market challenges that presented themselves throughout 2019, attendees at this event were generally positive in their outlooks for the upcoming growing season. In fact, when I summed up the mood from the 2020 Commodity Classic in our magazine, I used the headline “Agriculture ‘More Optimistic’ Heading Into 2020.”
For evidence of this outlook, I cited many examples presented at the event by Secretary of Agriculture Sonny Perdue.
“The United State Mexico Canada Agreement has been signed into law, adding certainty to the North American trade market,” said Perdue. “And we have a $7 billion trade agreement with Japan. In addition, the Phase One China Deal is now there, which includes commitments by China to buy several billion dollars worth of American agricultural products backed up by hardline numbers.”
For agriculture to borrow a quote from the movie “A Christmas Story,” all seemed right with the world.
Then, however, March rolled around. Along the official start of spring, the month also brought the rapid spread of the coronavirus to America. By the end of the month, every state had hundreds (or thousands) of cases and most state governors issued “stay-at-home” orders for residents, closing all non-essential businesses and schools in the process. Phase Two of 2020 had arrived!
Naturally, this had an immediate and devastating impact on the nation’s economy. Millions ended up out of work and the federal government stepped in to pass a multi-trillion stimulus package to help out.
Now, luckily for agriculture, states have allowed the industry to continue uninterrupted. “The Department of Homeland Security has designated agriculture as a critical industry,” says Daren Coppock, President/CEO for the Agricultural Retailers Association. “That designation allows employees engaged in that industry’s work to continue working even if there are shutdowns of other economic sectors.”
Unfortunately, there will still likely be aftershocks caused by the coronavirus pandemic that directly impact agriculture. For example, as ethanol demand dried up (due to consumers not driving to-and-from work), commodity prices for corn had significantly dipped as of early April.
Hopefully, as the calendar continues to move forward, the coronavirus pandemic will begin to lessen. Then, agriculture and the entire globe can look forward to a Phase Three for 2020 – recovery!
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