Farmers concerned about disruptions to spring seeding, livestock operations amid COVID-19
While it may be easier than most for farmers to self-isolate in their tractors and farmyards, they too are unable to hide from the widespread impacts of the coronavirus.
Just as stock markets have plunged, so too have prices for many farm products.
Wheat prices, for instance, fell by about 15 per cent in early March, but have started bouncing back in the last two weeks. Wheat, canola and corn prices have been especially volatile.
«The general pattern that we’ve seen is initially everything got clobbered really hard early on,» said Jon Driedger, an analyst with Manitoba-based Left Field Commodity Research.
«[What] we’ve seen since then is some rebound across most crop markets.»
The unpredictability comes at a time when most farmers are choosing what to plant, since spring seeding begins in about a month.
Agriculture groups say the supply chain across the country needs to hold up or else there could be food shortages. That means keeping the railways and trucking industry operating, along with other services.
After receiving a shipment of diesel to his farm, Matt Sawyer is now just waiting for some final seeds and chemicals to arrive before he’ll have peace of mind.
«Once we can secure our canola seed, we should be able to put this crop in the ground fairly comfortably,» he said from his farm near Acme, Alta., about 80 kilometres northeast of Calgary.
«Mother Nature dictates we have this small window to get this crop in the ground,» he said. «Any supply chain disruptions will dramatically affect that.»
Similar concerns are impacting the beef industry. Any interruption, such as a processing plant shutting down, would be significant because there is record beef production in North America this year.
«We really need the supply chain to be humming along to work through all this cattle and beef supplies,» said Brian Perillat, a senior analyst with Canfax, a market trends organization based in Alberta.
Shifting prices
Cattle prices have also fluctuated greatly with about a 12 per cent drop in early March compared to the beginning of the year. Prices have since regained some of that value.
«That’s incredible volatility. We’re talking about hundreds of dollars a head jumping around. Very dramatic,» said Perillat.
Canada’s agriculture sector wants to be designated an essential service and allowed to do business as usual during the COVID-19 crisis.
The federal government has already decided to exempt temporary foreign workers, including migrant farm workers, from some COVID-19 travel restrictions. About 60,000 come to Canada every year, mainly from Mexico, Jamaica and Guatemala.
Balancing distancing with production
One of the world’s largest livestock processing corporations is taking several steps to avoid disruptions at their facilities. JBS executives told investors last week the company is screening the temperature of workers as they arrive, changing shifts, and hiring more workers, among other steps.
Still, the facilities often have a few thousand workers and there’s only so much physical distancing possible in the plants.
«It’s a challenge and we will continue to face the challenge as long as the virus continues,» said Andre Nogueira, the chief executive of JBS USA, which oversees a beef facility in Brooks, Alta, which can process about 4,000 head of cattle a day.
«We need to balance that with our responsibility to continue to produce food. We can’t stop or it creates a big issue for the whole nation,» he said.
The rush in grocery stores for meat products has yet to have an impact on retail prices. Grocers are cautious not to raise prices during a crisis, said Ontario-based market analyst Kevin Grier.
«There’s been a big rush for meat because of the coronavirus concerns people are having, so they are pantry loading,» he said.
Still, in recent months, meat prices were already increasing by about four to six per cent, according to Grier, while average food prices were increasing about two to four per cent.
