COVID-19 is likely leading more U.S. farmers to file for bankruptcy
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Mitchell Hora is a seventh-generation family farmer in Washington County, Iowa. He plants corn and soybeans and said finances were tough even before this crisis. It costs more to grow the crops than he can charge for them.
“You run the numbers and it’s like, holy smokes, like how does this even get close to working?” Hora said.
He said most farmers in the United States can’t think about the future or invest in their farms because they’re living harvest to harvest.
“I gotta have maximum revenue coming in so I can pay off my debt, pay the next interest payment. And that is not good,” he said.
Long before the coronavirus pandemic hit, American farmers were struggling. They lost important export markets because of the U.S.-China trade war and growing international competition. Then this health crisis emerged and disrupted an already volatile supply chain. That has agricultural economists predicting a rise in farm bankruptcies across the United States.
Part of the problem is that 80% of farm assets are tied up in land values, and those values have been declining for the past few years. And now, COVID-19 has disrupted farmers’ supply chains.
“It’s been hard for them to get a lot of their livestock to slaughterhouses and whatnot,” said Robert Dinterman, postdoctoral researcher in agribusiness at Ohio State University.
His data shows farm bankruptcies up about a quarter from last year. But he expects many more as the legal system gets back to normal.
“We’re probably going to see quite a jump in the second quarter, especially if bankruptcy courts start opening up again,” Dinterman said.
Many farmers forced into bankruptcy will continue to grow crops, of course, as demand for food is pretty consistent.
Jason Skaggs with the Texas and Southwestern Cattle Raisers Association said his members are determined to get through the pandemic.
“We’ve survived drought, wildfires and hurricanes. Obviously, this is a new challenge, but how ranchers go about attacking these kinds of things and dealing with them is the same,” he said.
But surviving COVID-19 won’t be easy for many farmers who were up against it before the pandemic. This particular crisis adds another layer of difficulty. Greater restrictions on immigration have limited the supply of labor, a workforce many farmers rely on to help produce their crops.
COVID-19 Economy FAQs
What’s going on with extra COVID-19 unemployment benefits?
The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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