Decreased commodity demand causes domino effect in Agriculture industry

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RICHLAND PARISH, LA (04/27/20) “I’m a young person, so, you know, I always hear about the dark days of agriculture, but I’m afraid we’re living them right now” Scott Franklin, Chairman of the Richland Parish Chamber of Commerce.

He is also a farmer. The livelihood farming provides him, the ArkLaMiss and the country is becoming harder to sustain each year, and in 2020, each day. This is largely due to the decreased demand caused by the Coronavirus.

This lack of demand is causing a negative domino effect across the country in industries such as oil and meat, one’s that are heavily reliant on farmers.

Prevented planting helps to insure farmers with crop losses due to poor planting weather.

“In the past, farmers would file a preventative plant claim and then later follow with a later crop like soybeans or cotton” Franklin said.

Bad weather has plagued agriculture over the last few years, and market prices on following crops were low to start with. The Coronavirus dropped them even lower.

“Currently, nearly all of the crops that we grow here in Louisiana, they’re priced below break even levels. In the case of corn, soybeans and cotton. They’re so low that there’s just no way you can foresee a profit on a cash flow statement” Franklin said.

Prevented planting may not provide recovery this time around.

“There’s just not much of an incentive to go on and plant a second option crop” Franklin said.

The recent Coronavirus Food Assistance Program did help some farmers that were forced to sell.

“But that doesn’t really change anything that you see behind me here. These crops are either going to get planted or they’re not, and right now there’s really no aid situation on the table for the 2020 crop” Franklin said. “I’m afraid that a lot of the side effects have already done their damage. And it’s going to show up in the Ag markets very soon.”

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