CoBank Report Examines Effects of COVID-19 on Agriculture

DENVER, CO – COVID-19 has brought the U.S. economy to a screeching halt, ushering in a recession in the process. For most businesses, the sudden stop to the economy is more jolting than the financial crisis of 2008 and has forced hard, immediate decisions about employees and finances. According to a new Quarterly report from CoBank’s Knowledge Exchange, COVID-19 has also underscored the critically important nature of agriculture and other industries essential to rural America. The U.S. grain sector remains stuck in a rut, with pressure on commodity prices, weakening basis for corn and soybeans in some markets, and export volatility likely over the next two to three months. Since 2020 began, corn prices have declined by 12% and soybeans prices have dropped by 7%. While crop farming fundamentals remain challenging, ag retailers enter the 2020 growing season on a relatively stable footing. Retailers are optimistic for a full agronomy season given the pent-up demand for fertilizer and crop protection products following last year’s complicated and wet fall application season. The U.S. ethanol complex is navigating through an extremely difficult operating environment exacerbated by the recent collapse in crude oil and gasoline prices and virtual overnight evaporation of demand. Several large players have restructured or exited the business, with more expected to do so over the next three months.