Life in many ways has been upended. The pandemic has created unique challenges for people around the world. The first and most pressing challenge is trying to treat and cure people who have contracted the virus. The second challenge is trying to prevent others from catching the virus through social distancing.
Through the closure of businesses, we have seen this pandemic have ripple effects through our entire infrastructure, economic system, and beyond. There are a couple of key things that we can point to as evidence of the effect on our agricultural system. But before I go on, I want to preface this by saying each of these scenarios are complex and affected by many different factors. I’m trying to key in on how the pandemic has affected farmers, but there are many things to consider.
When we consider agricultural products, we see things on a timeline that closely relates to the life cycle of each animal or plant.
Chickens produce one egg roughly once every 24 hours. In the first days of social distancing, we saw grocery stores run out of eggs as people began stocking up on essential food items. People bought enough to last longer than normal as they wanted to make fewer trips to the grocery store. Store shelves sat bare of eggs. But this didn’t last long. The number of chickens producing eggs wasn’t effected. As they produce one egg a day and the stores get regular shipments and deliveries of eggs, the store shelves were quickly refilled with eggs. Iowa’s egg farmers lead the nation in egg production, caring for nearly 55 million laying hens producing nearly 16 billion eggs per year. That’s almost one out of every six eggs produced in the United States.
You have likely seen early stories of farmers having to dump milk on the ground. Dairy cows produce an average of 70 lbs. of milk per day (8 gallons). That milk is immediately chilled but it can’t be stored for long. Usually within 24 hours it is picked up from the farm and taken to a processing plant where it is pasteurized and then either bottled or turned into any number of delicious dairy products like cheese. Each processing plant usually specializes in a few products – like individual serving sizes for schools. As another example, while there may only be 8-10 general types of cheese, of those, some people estimate that there might be 5,000 to 20,000 varieties of those cheeses. Not every processing plant would make all varieties. And the same would be true for yogurt, milk, and other dairy products. Then each one of those processing plants will have a limited number of customers that it might sell its cheese to. For example, if a national pizza chain closes because of state or federal orders it stops buying cheese. The processing plant that produces the cheese doesn’t have a customer to sell to and so stops buying milk.
But the one thing that can’t be stopped is the cow producing milk. Every day the cow will produce milk. And the cows can’t stop and start again. So even if the farmers can’t sell the milk they have to continue collecting it. So without anything to do with it, they dump it on the ground. The broken supply chain can be fixed. But it’ll take time for the processing plant to find a new end market (potentially needing to change the product that they produce). But the farmer will largely have to wait until that is fixed because it is uneconomical to send milk to a processing plant farther away.
Chicken can grow from an egg to a market weight bird (5-10 pounds) in approximately 12 weeks. Because there is a high demand for chicken across the U.S. the end market hasn’t been as affected as with milk and eggs. Chicken is easy to cook at home and it can easily be stored frozen at home. Because chicken can be stored frozen, there isn’t an immediate need to find an end market. Because chickens can be raised in a relatively short period of time, the supply and number of chickens raised can be increased or decreased relatively quickly as demand fluctuates up and down. Chicken is also a ‘protein substitute’ which means that it is often looked at as a cheaper option than pork and beef. If pork and beef prices are low, consumers will buy more of those and less chicken. But if pork and beef are high, consumers will quickly switch to chicken in favor of the less expensive option.
Pigs can grow from a piglet to a market weight hog within approximately six months. Profit margins in agriculture are very slim. A farmer will feed and raise livestock as long as they are still growing. But farmers don’t want to feed the animals (which is an added cost) if the animals aren’t growing and don’t have the potential to be sold for a higher profit. Most pigs will be sold at a market weight of 270 to 300 pounds. Many processing plants won’t take pigs that are bigger than that because a lot of their machines have been standardized for animals that fall within that weight range. So if farmers aren’t able to take pigs to market, they lose money continuing to feed them and potentially won’t have a market to sell to if they get too big.
As COVID-19 ripples through our state and communities it can potentially impact anyone and everyone. When employees at a processing plant get infected, it is important to shut down to minimize the chance of spreading the disease to other employees. The plant should be thoroughly sanitized and until everyone has been tested, even the healthy employees shouldn’t return to work. But where do the pigs that are ready for slaughter then go? While there are other pork processing plants, farmers might lose money shipping them farther. Or they might lose money continuing feeding the animals and waiting for the plant reopen. But the worst-case scenario would be to euthanize animals and not be able to use them at all. Farmers can start reducing their future herd numbers now to adjust, but they have been raising this current batch of pigs for the past six months. They need to find an end market.
Corn has many benefits as a grain crop because it is harvested dried from the field and then can be stored dried for a long time. While the corn supply is more insulated from the effects of the pandemic, it isn’t completely insulated. Corn has three primary end markets in that it can be used for human food (corn flour products like tortilla chips, products with corn syrup, and countless others), animal feed (food for pigs, cows, and even dogs and cats), and ethanol fuel. Iowa produces a lot of corn and also has a lot of storage facilities for that corn – both grain bins on farms and at co-ops. In the spring of the year, we are still using the corn supply from last fall’s harvest. But as farmers take to the field to plant we need to ensure that the corn is sold and used so there is room to store this year’s corn come harvest in October. If there are fewer pigs and other livestock eating the corn, less corn will be used.
You may have also seen news stories talking about the negative prices of oil. The negative prices are a result of high supply and low demand. One of the uses of corn is to produce ethanol. Ethanol is a fuel substitute and so the price of ethanol is very closely related to the price of crude oil. If there is no demand for crude oil, there is low demand for ethanol. For now, ethanol is still being sold for profit, but the price is much less than it was a few months ago. The future supply of corn and the demand for fuel will largely affect what that price will be.
Cattle can grow from a calf to a market weight animal (approximately 1300 pounds) in 18 months. Cattle can be kept and fed out to up to 1500 pounds. So there is a little more flexibility with cattle. But the current closing of meat processing plants still affects the animals that are currently at market weight and ready to be harvested.
Long term, farmers will have to guess at the demand for beef and either start reducing their herd size over the next two years or start building up their herd. How long the pandemic lasts, the supply of feed like corn, the supply of protein substitutes like pork and chicken all affect the farmer’s decision-making process. So even if the pandemic ends tomorrow, because things like cattle have an 18 month or more life cycle, we will still be feeling the ripple effects for the next two years.
What Can Be Done? – Short Term
The first thing that we can do and have been doing is managing the human virus similar to the way farmers manage the prevention of diseases on farms – through biosecurity. In farming we consider biosecurity to mean doing everything you can to reduce the chances of an infectious disease being carried onto your farm by people, animals, equipment, or vehicles. This includes wearing face masks, disinfecting shoes, washing hands. For humans, we have been social distancing, wearing face masks, washing hands. It is much the same. Farmers, especially pig, chicken, and turkey farmers have a lot of experience with this disease prevention strategy. The more we can slow down the spread of the disease, the better off we all will be and get back to life as normal.
One thing some farmers are doing to try to adjust the supply of pigs to the market is to adjust their feed rations. Feed rations have been optimized to maximize the rate of growth. The faster a pig will grow, the quicker it can be sold and then the process can start again. But in this time of closed processing plants, we need to slow the rate of growth in animals. A less optimal feed ration will still provide the animal everything it needs, but simply slow the rate of growth.
One of the issues is the supply chain of food to restaurants. With restaurants closed, where does that food go? It can’t be rerouted to grocery stores easily. The packaging is different. Labeling is different. Some restaurants have figured out that they can become grocery stores. This requires creative thinking, repackaging, and recreating logistics. It doesn’t fix all the problems, but it does offer one potential solution to keep the food supply flowing. With the same number of people needing the same number of meals each week there isn’t really a decrease in the demand for food. We just need to figure out how to reroute it.
One of the shortages that we have experienced is that of hand sanitizer. The disinfecting properties of hand sanitizer come from – the same alcohol that ethanol plants make from corn. But that doesn’t mean we can just switch to making hand sanitizer at ethanol plants. There are many logistical issues like packaging into small quantities that come into play. The other ingredients that go into hand sanitizers also quickly become a limiting factor. Some local, small scale distillers have started creating hand sanitizers and they are much better equipped to do this when compared to large scale ethanol production plants that produce in bulk.
Our current food system relies on consistency and regularity. So one thing consumers can do is shop as you normally would. Keep buying trends consistent, especially for products that have limited flexibility in their supply chain. Farmers have to plan months and even years into the future. A more consistent consumer allows for them to ensure we have enough food at the times we need it.
What Can Be Done? – Long Term
Long term there will likely need to be a lot of changes to our food system. Grocery stores practice just-in-time delivery to prevent overstocking and to minimize food waste. But this system doesn’t work when a lot of people want to stock up at the same time for extended periods of at-home-living. So food systems might need to find a balance between stocking shelf-stable food and still minimizing food waste. Consumers too can share responsibility. The LDS church regularly encourages their members to keep a three month supply of shelf-stable food on hand. For times like this, that may be good advice for everyone – or at least stocking up a little bit more than normal. Consumers would just have to manage that food supply and constantly use some of it that is close to expiration and constantly restock what gets used. There is no need to buy a huge supply of food tomorrow. But in periodic trips to the grocery, buy one or two extra items until you’ve built up a store.
Some systems are flexible. Ethanol, for example, is a simple molecule. The process of producing ethanol is largely a chemistry experiment and with tweaks at various stages different chemicals can be produced. Some of these different chemicals could be different types of fuels or other additives for industrial and commercial products. Even chemicals for things like cosmetics and make-up could be produced. But this would require retrofitting the processing plant and would take time and money. It depends on what products will be needed and that is yet to be seen. Maybe there will be a continued need for ethanol as it is.
Farmers are very good at producing food. There is plenty of food produced each year. What we are seeing is disruptions in the logistics of processing that food and then getting it to where it needs to be. Components up and down the food system need to be looked at and potentially changed. We need to look at dry storage capacity of grains, cold storage for things like meat, imports from other countries, and balancing that with the locally produced products.
Ultimately, this pandemic will end. When is anyone’s guess. One thing is certain, things have changed and will continue to change. But the agricultural industry and the larger food system has a job to do and that is to provide food to feed America. We are all in this together.