Five Things with Brad Lubben
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06/17/2020
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The COVID-19 pandemic has caused widespread economic damage to the country…including agriculture. In this episode of Faculty 101, we hear from University of Nebraska-Lincoln agriculture economist Brad Lubben about the unique challenges facing farmers and ranchers and how they can weather the storm. Show Notes: Learn more about Farm and Ranch Management ›› farm.unl.edu
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- [00:00:00.616](bluegrass guitar music)
- [00:00:04.240]As usual, spring 2020
- [00:00:06.350]ushered in calving season
- [00:00:08.167](cows mooing)
- [00:00:09.260]and planting season on the farm,
- [00:00:11.392](machines humming)
- [00:00:13.900]but this year, spring also brought a shutdown
- [00:00:17.010]due to the effects of the COVID-19 pandemic.
- [00:00:19.956](mysterious music)
- [00:00:23.140]Businesses closed their doors,
- [00:00:25.140]leading to rising unemployment,
- [00:00:27.330]especially in America's biggest cities,
- [00:00:29.960]but the economic effects of the pandemic
- [00:00:32.100]are also hitting rural areas and agriculture.
- [00:00:37.300]What's ahead for farmers,
- [00:00:38.760]ranchers and rural communities?
- [00:00:41.390](upbeat music)
- [00:00:44.300]That's what we asked Brad Lubben,
- [00:00:46.190]Extension Policy Specialist
- [00:00:48.250]in the Department of Agricultural Economics
- [00:00:50.780]at the University of Nebraska-Lincoln.
- [00:00:55.810]This is Faculty 101,
- [00:00:57.970]five things about the challenges facing agriculture.
- [00:01:07.230]Brad Lubben grew up on a grain and livestock farm
- [00:01:10.100]near Bern, Nebraska.
- [00:01:11.790]He holds degrees from the University of Nebraska-Lincoln
- [00:01:14.670]and Kansas State University.
- [00:01:16.510]He has more than 25 years' experience
- [00:01:18.870]in teaching, research and extension,
- [00:01:21.210]focusing on agricultural policy and egg economics.
- [00:01:25.050]We talked to Dr. Lubben about how the global pandemic
- [00:01:28.080]affected agriculture and what help is available
- [00:01:31.090]for farmers and ranchers.
- [00:01:34.330]Number one,
- [00:01:36.160]as 2020 dawned farmers and ranchers were looking for relief
- [00:01:40.390]from years of decreasing prices in agriculture.
- [00:01:43.690]We came into this year,
- [00:01:46.030]sort of mired in a multi year downturn.
- [00:01:48.063]Then we were beginning to see prospects
- [00:01:50.210]of progress on the trade front,
- [00:01:52.820]a two year trade war with China and other trading partners.
- [00:01:59.190]Ultimately, culminated in and it appeared that well,
- [00:02:01.220]maybe there's an agreement with China
- [00:02:02.490]and we're actually moving forward in 2020
- [00:02:04.470]looks to offer more promise.
- [00:02:07.621]And no sooner did we get that agreement
- [00:02:10.900]effectively announced that we saw the COVID-19 pandemic
- [00:02:16.130]affect China first
- [00:02:17.930]and then affect everywhere else around the world.
- [00:02:20.700]We're dealing with a downturn
- [00:02:22.290]that was sort of accelerated by trade conflict.
- [00:02:27.264]And just as there was hope that
- [00:02:28.690]we could see some rebound out of that.
- [00:02:31.100]We have a pandemic.
- [00:02:33.390]Number two,
- [00:02:34.820]the food supply chain was rattled
- [00:02:36.900]when restaurants and other food service customers
- [00:02:39.390]shut their doors,
- [00:02:40.750]food processing plants reduced capacity or closed
- [00:02:44.510]and egg prices were hit hard.
- [00:02:47.050]Prices for most agricultural products
- [00:02:48.790]are down and down sharply.
- [00:02:51.400]They've rebounded some from their March-April lows.
- [00:02:55.870]At least in some cases,
- [00:02:57.040]but we still have this fundamental challenge of,
- [00:03:01.130]in some cases of processing sector that's not a full speed.
- [00:03:04.200]In the case of grains we have corn
- [00:03:07.810]that is not being utilized in the ethanol processing sector
- [00:03:12.020]because motor vehicle fuel usage is down
- [00:03:14.410]which means ethanol is down for blending.
- [00:03:16.730]And suddenly we have plants shutting down
- [00:03:21.410]and the lack of corn being used there.
- [00:03:24.573]So, we have this disruption across
- [00:03:27.070]almost all commodities.
- [00:03:29.200]Number three,
- [00:03:30.610]support for farmers and ranchers
- [00:03:32.530]is available through a variety of federal programs
- [00:03:35.280]including the Coronavirus Food Assistance Program.
- [00:03:38.960]This Coronavirus Food Assistance Program
- [00:03:41.340]provides upwards of about $16 billion across the country
- [00:03:46.260]in payments to producers to help offset
- [00:03:48.470]crop and livestock losses.
- [00:03:51.514]But we also have producers that started this year with
- [00:03:55.410]production decisions and crop insurance decisions
- [00:03:58.430]and with the drop in market prices that we've seen.
- [00:04:01.650]Some of those crop insurance policies
- [00:04:03.930]also will begin to kick in to limit further losses.
- [00:04:08.590]And we have farm programs that producers were signing up for
- [00:04:11.350]this winter under the new 2018 Farm Bill.
- [00:04:15.390]And based on how they signed up for those programs,
- [00:04:17.488]they have price or revenue protection
- [00:04:19.854]as well below trigger levels.
- [00:04:23.490]Number four,
- [00:04:24.720]federal assistance won't solve all the problems
- [00:04:27.220]facing agriculture, but it could help farmers
- [00:04:29.920]and ranchers weather the storm.
- [00:04:32.480]Fundamentally amidst all those uncertainties.
- [00:04:34.580]It's possible to sort of get lost and say,
- [00:04:37.430]Look, there's no chance for anything
- [00:04:39.343]and we're going to continue to be stuck in this.
- [00:04:42.750]We can also look and say yes,
- [00:04:43.897]but we have to figure out how to manage through it
- [00:04:46.430]so that we are positioned when opportunities re emerge.
- [00:04:50.470]And that doesn't mean that we're gonna find
- [00:04:52.503]all kinds of profitable choices today.
- [00:04:55.180]It does mean that we need to figure out
- [00:04:57.390]how to manage for the day so that we're ready
- [00:04:59.453]when those opportunities exist.
- [00:05:02.630]And number five,
- [00:05:04.430]if and when the nation is able to put COVID-19 behind it,
- [00:05:08.280]there could be permanent changes ahead.
- [00:05:11.958]Every appeal or every challenge,
- [00:05:14.340]sort of thrust new changes that were coming
- [00:05:17.580]but not quite fully adopted.
- [00:05:19.890]And one of those is responding to consumer tastes
- [00:05:23.170]and preferences and choices,
- [00:05:25.090]which might include home delivery
- [00:05:27.080]and direct marketing so forth.
- [00:05:28.720]A growth of that entire market segment.
- [00:05:31.090]We're still gonna grow crops,
- [00:05:32.200]we're still gonna grow livestock.
- [00:05:34.410]We're still gonna have major commodity markets and gain,
- [00:05:38.370]food system channels.
- [00:05:39.840]But something's gonna be different.
- [00:05:42.161]Producers figure out how to adapt.
- [00:05:46.480]The University of Nebraska Lincoln
- [00:05:48.020]is providing a farm and ranch management webinar series
- [00:05:51.550]that explores topics related
- [00:05:53.470]to COVID-19's impact on agriculture.
- [00:05:56.470]You can find out more@farm.unl.edu
- [00:06:02.570]That's five things with Dr. Brad Lubben.
- [00:06:06.640]Faculty 101 is produced
- [00:06:08.510]by the University of Nebraska Lincoln.
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