Economists discuss what post- COVID-19 could look like in ag sector


Economists discuss what post- COVID-19 could look like in ag sector

The coronavirus pandemic sent shockwaves through the ag industry and two economists are sharing what they think could happen as the sector recovers.

Purdue University Ag Economist Jayson Lusk projects that retail food prices will continue to fall.

“Mainly because we’ve seen meet prices already start to fall,” he says.

But, he says there will also be scrutiny over anti-competitive behavior.

“There already is a lot of increasing scrutiny over what happened to these price changes—was somebody to blame other than the coronavirus. There are court cases already out there and it will be interesting to see how those play out.”  

Lusk says other trends that aren’t going away include online grocery shopping and interest in local food as well as plant-based protein options.

American Farm Bureau Chief Economist John Newton says he anticipates market and price volatility will continue.

“Probably not to this degree if we see the economies begin to reopen, but I’ll take all that back if we see states start to institute stay-at-home orders again for any prolonged period of time,” he says.

He says the pandemic could lead to the restructuring of medium-sized farms.

“The medium-sized farm operations are not sometimes not big enough to capture the economist of scale and may be highly leveraged, where some of the smaller farms that aren’t highly leveraged can weather the storm a little better,” he says.

Lusk and Newton spoke during a Center for Food Integrity webinar today.