Report 3-24-20

The U.S. Department of Homeland Security issued guidance on Thursday concerning the critical industry workforce that should continue as the country addresses and responds to the COVID-19 outbreak. U.S. food and agriculture was included among the 16 critical industries. The agency stated that if you work in a critical infrastructure industry, as defined by the Department of Homeland Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility to maintain your normal work schedule. This directive indicates that farmers and ranchers and businesses that support them are included in this directive. However, Dr. James Lowe, College of Veterinary Medicine at University of Illinois, told participants of the Farmdoc Daily webinar,  that COVID-19 needs everyone’s attention, because it much like many animal diseases, that are difficult to determine which animals are infected vs. which animals are carrying the disease that may be spreading it to other animals in the herd. As a result, the big challenge facing this pandemic is understanding case definition.

North American meat processors said on Monday they would pay extra money to farmers and slaughterhouse workers as the companies scramble to meet surging demand from consumers who are concerned about the spread of the Covid-19 virus. Tyson Foods Inc. and Cargill Inc. want to ensure their slaughterhouses remain supplied with cattle to process. Shoppers have emptied grocery stores of meat to fill their refrigerators and freezers in anticipation of more stringent social distancing recommendations as the virus continues to spread. Tyson said it would pay farmers a one-time premium on cattle slaughtered this week after facing objections over the company’s soaring profits. Payments will amount to $5 per cwt for live cattle and $7.94 per cwt for dressed cattle, according to cattle producers. Margins for U.S. beef processors like Tyson hit a record high of about $580 per head of cattle on Monday, up from about $170 a week ago, according to livestock marketing advisory service Beef cattle producers have recently complained about the large margins that processors have made in relation to the prices paid to them as the pandemic intensifies.

Although agricultural commodity market prices have not fallen as sharply like as have stocks on the New York Stock exchange, farmers and ranchers are not seeing much financial benefit from demand by consumers. On the other hand, farmland prices have not been affected so far, which is important to those producers who use the value of their agricultural real estate estate to secure operating loans. If the value of their real estate holdings slip much, farmers and ranchers could find their lenders balking at approving operating loans that will keep them in business. But some investment advisers point out that as stock markets go down, investors often begin looking at farmland as a safe haven that will provide a reasonably safe investment that will provide a modest capitalization rate of 3% to 4% each year. 

News paper editor, politician and author William Allen White said, “So, dear friend, put fear out of you heart. This nation will survive, this state will prosper, the orderly business of life will go forward if only men can speak in whatever way given them to utter what their hearts hold – by voice, by posted card, by letter or by press. Reason has never failed men. Only force and repression have made the wrecks in the world.”

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