COVID-19 will likely lead to more farm bankruptcies

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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. Growing crops is more expensive than it can afford.

“You run the numbers and it’s like, holy smoke, like how can that even work?” Hora said.

He said most farmers in the United States cannot think ahead or invest in their farms because they are living from crop to crop.

“I have to have as much income as possible to be able to repay my debt, pay the next interest payment. And that’s not good, ”he said.

Long before the coronavirus pandemic hit, American farmers were in trouble. They lost important export markets because of the US-Chinese trade war and growing international competition. Then this health crisis appeared and disrupted an already volatile supply chain. This has led agricultural economists to predict an increase in farm bankruptcies in the United States.

Part of the problem is that 80% of farm assets are tied to land values, and those values ​​have declined in recent years. And now COVID-19 has disrupted farmers’ supply chains.

“It’s been difficult for them to get a lot of their cattle to slaughterhouses and so on,” said Robert Dinterman, postdoctoral researcher in agro-industry at Ohio State University.

Its data shows that farm bankruptcies have increased by about a quarter compared to last year. But he expects a lot more as the justice system returns to normal.

“We’re likely to see a huge jump in the second quarter, especially if bankruptcy courts start to open again,” Dinterman said.

Many farmers forced into bankruptcy will of course continue to cultivate, as the demand for food is quite constant.

Jason Skaggs of the Texas and Southwestern Cattle Raisers Association said its members are determined to get through the pandemic.

“We have survived drought, forest fires and hurricanes. Obviously, this is a new challenge, but the way the ranchers tackle this stuff and treat it is the same, ”he said.

But surviving COVID-19 will not be easy for many farmers who faced it before the pandemic. This particular crisis adds another layer of difficulty. Greater restrictions on immigration have limited the supply of labor, labor that many farmers rely on to help produce their crops.

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