ISU pegs harms to Iowa agriculture at $6.3 billion

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An Iowa State University report this month estimates the COVID-19 pandemic will cost Iowa’s largest agricultural industries at least $6.3 billion per year.

A five-member research team estimated losses in the following sectors:

Ethanol: $2.5 billion;

Hogs: $2.1 billion;

Corn: $788 million;

Fed cattle: $658 million;

Soybeans: $213 million;

Calves and feeder cattle: $34 million.

The pandemic has brought an economic disaster that is hard to compare to any threats in history, the authors wrote. “The large scale destruction of farmland and processing facilities in the southern United States during the Civil War and the dust bowl on the Great Plains in the 1930s may be the closest analogies,” the authors noted.

The report notes that the social distancing needed to contain one of the world’s most threatening pandemics on record has also hurt industries.

“These policies appear to work in reducing the rate of infection, but they severely curtail economic output and restrict demand,” the authors wrote. “They also force significant changes in the ways people obtain and use basic goods and services.”

For example, biofuels are taking a direct hit from the loss of demand as people stay home, the authors noted. U.S. fuel use per person has hit a 50-year low. The Energy Information Agency predicts demand will continue to fall through the second quarter, the report said.

There has been related trouble elsewhere. “The idling of some ethanol plants and the slowdown at others not only reduces ethanol production, it also limits the supply of distillers grains, a major livestock feed component. For some livestock producers, this has translated into higher distillers grains prices."

Iowa State University, COVID-19, coronavirus

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