Crop and Livestock Prices Plunge Under Weight of COVID-19 Uncertainty

Updated analysis by the American Farm Bureau Federation shows crop and livestock prices falling to levels that threaten the livelihoods of many U.S. farmers and ranchers. Shuttered schools, universities, restaurants, bars and cafeterias are no longer buying milk, meat, fruits, vegetables and other food, causing a downward spiral in crop and livestock prices. Nearby futures prices for nearly all the major crops have dropped by double-digit percentages. Pushed down by a 40% plunge in ethanol prices, corn prices have fallen 15%. Soybean prices are down 10%, while the price for cotton, which is heavily dependent on foreign manufacturing capacity, sank nearly 30%. Buoyed by demand in the U.S. and China, wheat prices have declined only 3%. On the livestock front, since the beginning of the year, both beef and pork futures prices have declined more than 30%. Milk futures prices have also fallen sharply, with the price for milk used to make cheese down 28% and the price for milk used to make nonfat dry milk falling by 34%. Dr. John Newton, American Farm Bureau Federation chief economist, said, “The drop in demand is pushing the prices farmers would get paid for their crops to lows that may make it very difficult for them to justify putting another crop in the ground this spring. While the whole country is optimistic there is an end in sight, the question of when the economy will be healthy again is fueling further market uncertainty.”...MORE