Is the US agricultural sector recovering from COVID-19?

ABSTRACT

This article discusses the gradual recovery of the US agricultural sector during the pandemic. The first impact of the pandemic lowered agricultural prices, forced significant shifts in supply chains, and disrupted markets. However, as the summer progressed, there was some recovery in prices, supply chains realigned with consumer demand, and the markets rebalanced to the new conditions under COVID-19. To explore the extent of recovery in the US agricultural sector, the author updated the previous comparison of USDA's meat, corn, and soybean projections. The previous comparison ran from January 2020 (before the first confirmed case of COVID-19 in the United States) to USDA's June outlook. This update incorporates the changes from the most recent outlook, released in mid-October 2020, and reflects not only the impact of COVID-19, but also the progress on the US/China phase one trade deal and the natural disasters that struck the Midwest (drought and derecho). This article presents data that showed that while the initial impacts from COVID-19 struck nearly all US agricultural markets at the same time, the recoveries from that shock vary heavily and are still ongoing. For most of the meats and corn, the recovery thus far is partial-meats have seen better production, but lower prices, and corn has experienced lower production, but better prices, mostly due to factors other than COVID-19. Soybeans are the only commodity where we could argue the recovery is complete, as production and prices exceed pre-COVID-19 forecasts. However, 2020 is still a very challenging year in agriculture, but not quite as challenging as first envisioned.