Coronavirus Economic Impact: Virus Could Cost US Farmers $20 Billion

A new report has offered a grim outlook for farmers in the U.S. struggling through the COVID-19 pandemic.

According to findings from the University of Missouri’s Food and Agricultural Policy Research Institute (FARPI), the country’s farmers are likely to lose $20 billion in income in 2020.

“We’re looking at a situation with a lot sharper – or very big decline in farm income relative to what had been expected,” Patrick Westhoff, director of FARPI, said. “It’s a much tougher time for farmers than we would have guessed a few months ago.”

The report specifically pointed to the pandemic having an impact on the prices of livestock and crops, as well as the demand for fuel and ethanol. FARPI predicts a 5-10% decrease in the prices of corn, soybeans, and other crops, as well as a potential 12% decrease in the cost of livestock.

The group’s initial report in January, meant to measure the effects of the China trade deal, estimated a 2.8% increase in consumer spending for the year compared to 2019. Now, the group estimates a 2.2% decrease.

“It can’t be highlighted enough that it was really bad out here (for farmers) before COVID-19, and COVID has only made it worse,” Tim Gibbons, director for Missouri Rural Crisis Center, said. “It’s shining a spotlight on the rigidity and lack of resilience for the corporate model of (farm production), which does not pay farmers fairly and is not good for consumers.”

The International Monetary Fund has predicted an overall economic impact on par with the Great Recession of 2008, with recovery possibly beginning in 2021.

“The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” IMF managing director Kristalina Georgieva said.