Tough Times

By former USDA Secretary John R. Block.

The food industry is trying to cope with serious supply chain problems. Coronavirus has forced dramatic change in our food production and distribution system. Restaurants and schools are closed. They did provide 40% of our food. That food now needs to go to the grocery stores, but restaurant food is not packaged correctly for grocery stores. Another problem is that with people staying home all the time to eat, they don’t want as many fruits, berries and greens. They want to buy nonperishable food for their pantry. Therefore, produce suppliers don’t have the market they expected. Farms in Florida say that they have the labor to pick ripe squash, but the market will not pay the cost. Dairy farms are dumping milk. Some fruit and vegetable farms are plowing their crops under.

Take a look at our meat industry. It seems like every day another major meat processing plant is closed. We have farms with hundreds or thousands of pigs ready for market but they can’t find any plants that will take their pigs. There is even some consideration of euthanizing some market hogs. I am having a hard time finding a market for my pigs. The pigs keep eating expensive feed and get bigger. Beef and chicken processing plants are having some problems also.

We would not have seen these plants shut down if it were not for coronavirus. Too many of their workers turned up sick from the virus. Fortunately, President Trump signed an executive order to go back to work. If that isn’t enough to worry about, corn, soybean and cotton farmers are watching their prices hit the bottom.

In case you were not aware, 40% of our corn is processed into ethanol and distillers grain but the market for ethanol has collapsed with the petroleum market, and one-third of our ethanol plants are shut down. It’s hard to remember a more difficult time for the Ag industry. In the early 1980’s we had a farm recession and farm land values were cut in half. We had to pay 18% for borrowed money. We don’t have that problem today. Hold on.

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, just go online to www.johnblockreports.com.

Categories: USDA

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