Coronavirus causes ag issues from markets to shipping
By KRISTIN DANLEY-GREINER
The most obvious impact the novel coronavirus has had so far is in the stockpiling of soap, hand sanitizer, bottled water and oddly enough, toilet paper. The stock market also has responded wildly to the virus that has spread like wildfire, prompting public school systems and universities to halt all out-of-state and international travel. Even major companies are forbidding employees from traveling and attending large gatherings.
But the coronavirus also is having an impact on agriculture, Carl Larry, performance director of Refinitiv, shared in an economic summary that several factors have led to the stock market’s freefall, including the virus’ much faster transmission that previous epidemics like SARS and swine flu, as well as the fact that a trade deal had just wrapped up with China only to have that country suddenly gripped with the disease that first emerged there.
Imports to China have been impacted, Larry wrote, and rumors are swirling about an interest rate cut especially as the U.S. dollar weakens. Chad Hart, agriculture economist at Iowa State University, said many were surprised by how far and how quick the market dropped.
“What we’ll see is a pull back in general in trade and a slowdown in economic activity. We’ve seen a considerable slowdown in the amount of freight moving around,” Hart said. “There are some ports where the steel boxes are stacking up. The supply chain is for certain being affected.”
Mike Steenhoek, executive director of the Soy Transportation Coalition, said that as far as soybeans, the U.S. traditionally doesn’t export a lot of beans anywhere right now with planting looming. But it’s harvest time in Brazil and Argentina, and those two countries are exporting their crops now.
“It’s a very big crop in Brazil. It’s the time of year for Brazil to be a main supplier for the international marketplace, including China. In February when the coronavirus was occurring, they exported a considerable amount of soybeans still. The African swine fever is still having an impact on pork production in China, which has reduced their demand for soybeans, so that’s been a challenge,” Steenhoek said. “But despite the coronavirus, we’re still seeing exports heading to China at a healthy pace.”
But Steenhoek also said that the supply chain has taken a hit. Ocean liners that transport thousands of steel boxes have been sailing empty just to move the boxes away from ports where they’ve been sitting idle.
“They haven’t had enough healthy people to work the docks in China, so the boxes sat at other ports,” Steenhoek said. “The reports we’re hearing now is that things are returning back to normal and the number of dock workers at Chinese ports and the number of inspectors is increasing. Factories are also getting back up and running. But coronavirus has been very disruptive. The ports of Los Angeles and Long Beach are our leading ports and in terms of cargo value, they’re really struggling right now. All these containers that normally would get sent back to China are just stacking up, which is incredibly disruptive for supply chains. We also haven’t had hardly anything get shipped out of China as of late.”
Dal Grooms with the Iowa Pork Producers Association said the organization is watching the impact the coronavirus is having on trade.
“We are aware that the China situation has meant some back-up at the ports. China was actually the main driver of pork exports in 2019, since their country was working to fill the protein gap caused by their African swine flu situation. We hope China and the rest of the world, including the U.S., finds a way to successfully protect people from COVID-19,” Grooms said.
Katie Olthoff with the Iowa Cattlemen’s Association said the organization has seen a direct impact on the markets by the virus.
“We’re hopeful that the coronavirus’s effects on beef exports and cattle markets is short lived, and we’re looking forward to reaping the benefits of China’s Phase 1 trade deal,” she said.
In the meantime, the IPPA is encouraging its farmer-members and farm employees to use biosecurity practices at all times.
“That includes encouraging those who are ill to stay home and/or away from the pigs. General flu protocols are encouraged: wash hands thoroughly with soap and water; cover your mouth when coughing (preferable with a disposable tissue that can be disposed of properly); frequently disinfect surfaces and objects that are frequently touched; and for good measure, wash hands thoroughly and stay home when sick,” Grooms said.
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