To say that agriculture has changed throughout the past 25 years would be an INCREDIBLE understatement. Each year continues to have it’s own challenges for the agriculture industry.
Since the dawn of Roundup Ready Crops in 1996, as well as the exponential growth of the technology industry, the changes seen in agriculture today are best described by a “snowball effect”.
These advances aren’t the only things that have snowballed. As with anything, the more advanced/complex the industry, the more complicated it can be to keep going.
This is the case with the agriculture industry in 2020. Trade wars, political drama, weather, etc. Each factor has only added to the agriculture challenges of today’s farmers and ranchers.
Below is a breakdown of the top 5 agriculture challenges that farmers and ranchers have faced in 2020.
5 Major Agriculture Challenges in 2020:
#1 – Farm Income
Rising costs of inputs, tumultuous market prices, etc. have put a little strain on the average farm income. To kick off 2020, the Phase 1 waiting game of the U.S.-China trade deal created incredibly stagnant prices of corn and soybeans as the market awaited any new and exciting information.
Following on the shirt tails of the Phase 1 signing, COVID-19 hit in full force, drop kicking prices to a far left field. It should be noted that since the beginning of the year, we have seen some turn around on pricing due to large Chinese grain buys, a derecho wind, and spotty drought throughout the Midwest.
Despite the highs & lows of the market prices, input costs have persisted and continued to rise throughout the growing season, making it a tough environment to break even let alone make a profit.
Though government assistance programs aren’t something to necessarily put as a permanent placeholder in the budget, every little bit helps, right? The Coronavirus Food Assistance Program (CFAP) for 2020 sponsored by the USDA will provide farmers and ranchers a little relief once paid out towards the end of 2020.
The CFAP program that was rolled out mid-April has been designed to provide financial assistance to producers of agricultural commodities who have suffered a 5% or greater price decline or who had losses due to market supply chain disruptions from COVID-19.
Ready to learn more about the 2020 CFAP program? Check out this information on the USDA Coronavirus Food Assistance Program.
#2 – Trade Wars & Policy
As previously mentioned, the U.S.-China trade war has persisted from it’s beginnings in July of 2019 to 2020. An eye for an eye trade war that imposed billions of dollars worth of tariffs for either country on imports/exports left the grain markets a little confused.
With the promise of a new trade policy and larger exports to China (including agricultural exports) the markets waited…and waited…and waited some more.
As of January 15, 2020, Phase 1 of the new and improved U.S.-China trade deal was signed in by President Trump and Chinese Vice Premier Liu He. The deal included commitments by China to purchase an additional $200 billion worth of U.S. products over 2017 levels of 4 different industry sectors (manufactured goods, services, ag products, and energy).
The deal also gets more in-depth as it committed China to new promises not to manipulate its currency, protect foreign intel property, and stop forcing other foreign companies to transfer technology to them.
You can read an overview of the Phase 1 U.S.-China Trade Deal HERE!
Since the paperwork signing, it looked questionable if China would actually follow through with their original promises. Granted, a global ‘pandemic’ and massive shutdowns can put a damper on a lot of trade deals.
Despite all of the concern over the past four weeks, the U.S. has seen some of the largest-to-date grain purchases from China for U.S. produced corn and soybeans. We still have a long way to go to fully meet the promised level of Chinese purchases, but we’re at least starting to create an increased demand find a home for excess grains.
#3 – Challenges in DC
Politics, politics, politics. Depending on where you live, politics during an election year can be one of the touchiest subjects out there.
This is a subject that a lot of other challenges are affected by. Having a government that supports the agricultural community to the point that new trade deals are formed and adjusted (U.S.-China trade deal, CUSMA: Canada, U.S., Mexico Agreement) or that steps into provide some relief to ‘essential’ producers during a chaotic pandemic…that’s kind of a big deal!
Chaos that can add to agriculture challenges isn’t found just in DC. A California 9th circuit court ruling to ban the use of dicamba products as a chemical weed control option for farmers in soybeans created plenty of stress.
Besides just a scramble for growers to find a different chemical option for their soybean crop, there also was the general frustration in having a court far removed from the Midwest calling the shots for the rest of the country.
Check out the links below that go into more depth on the dicamba decisions:
#4 – COVID Complications to Agriculture
If anyone can name one industry or job that has not heard, seen, or felt the impacts of the 2020 Coronavirus pandemic, I would love to hear from you!
COVID-19 has swept into our daily vocabulary over a short several month time span. Throughout this time span, COVID-19 has directly and indirectly affected all aspects of agriculture.
The rocking of the stock markets and grain markets has by far been the biggest and longest lasting COVID blow to the ag industry.
During planting and spraying season, transporation/delivery of products was slowed down requiring plenty of planning and many back up plans. New protocol on working with customers and even employees has been implemented. From an ag retail point of view, it’s awfully hard to build relationships with growers if you can’t see them or shake their hand!
An incredible POSITIVE to the pandemic that I have seen is an increased amount of kids helping their families on the farm and ranch or that have returned home from college (with online classes) to help with planting, haying, and now harvest.
It’s amazing to see families and generations connected by a family operation and to see those family ties re-rejuvenated by time together during this pandemic.
#5 – 2020 Weather
Last but certainly not least…weather. This is the least predictable challenge out of the entire lot. To kick planting season off there were above normal warm weather for the last 2 weeks of April, followed by a late freeze and chilly weather for most of May.
Depending where you farm, consistent intermittent rain was a bonus! But lack of rain left many areas in northeastern Nebraska, Iowa, and Ohio short of moisture with crops that have reflected that.
Mother Nature check out the beginning of August and turned off any and all rain across much of the plains country, not to mention the hurricane of the Midwest…the derecho!
My heart goes out to all who were affected by the horrendous winds. It is a tragic event and economic environment to go through something of that magnitude.
Derecho or no derecho, lack of rain and unrelenting heat is not a great way for a crop to finish it’s grain fill period for the season.
And there have it! The top 5 major agriculture challenges in 2020 from this gal’s perspective. To say that this year has been a crazy tumultuous year would be an incredible understatement. But out of the ashes that was 2020, I truly believe there can be lesson learned. I look forward to a strong finish to 2020 and look to a better 2021!