Farmers faced a tough time during the pandemic, but they’ve weathered the economic storm. For many sectors of agriculture, the damage was not as bad as the experts had feared.
Economists feared hard economic times of much of agriculture, when restaurants first started to shut down during the pandemic. A Rabobank economist says it could have been much worse.
“For agriculture, the good news is the economy’s growing and consumers have money. And, you know, there’s not as many restaurants so people are eating at home. And so, they’re going to the grocery store and buying it and bringing it home and eating it. So, that’s been good for a lot of parts of the ag economy.”
Steve Nicholson says in some cases, the restaurant closures caused other categories of agriculture to explode.
“Despite all the issues of COVID, you know, it has been good for agriculture. The restaurant business, food service has been challenged, there’s no doubt about it. It’s coming back. It’s not what it used to be. You know, generally it’s been pretty good for agriculture and making sure, also, that everyone stays healthy is a big challenge as well.”
Nicholson says it’s all a balancing act.
“I think when you look at the overall economy, think about inflation that could raise some challenges, you know, ever-increasing costs. As we know, commodity markets don’t really care. I mean, inflation will help keep commodity prices higher, but if the supply and demand overwhelm them, they don’t really care if it’s inflation or not, I mean prices will do what they need to do.”
Rabobank believes high food prices will continue to dominate the supply chain this year. From a global standpoint, grains and oil seeds, palm oil, coffee and sugar are all likely to stay at the high point.
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