Agriculture sideswiped by COVID-19 outbreak

Image Credit ; xinhuanet

 By Kevin Hursh

How much will coronavirus (COVID-19) end up costing Canadian farmers?

Of course, the answer to this question can’t even be estimated without knowing how long the threat is going to last and how many people will end up infected. Fewer new cases are being reported in China so that’s a good sign, but it’s disconcerting to see other hotspots emerge, notably Italy and Iran.

Experts say the disease doesn’t have a particularly high fatality rate and the symptoms can often be mild. Unfortunately, the transmission of the disease seems to occur quite readily. In this interconnected world, COVID-19 has become everyone’s problem.

Up until now, Canada’s snarled rail transportation system has been a top concern for the country’s grain producers. Recovery from rail blockade protests, particularly in the Canadian National Railway system, is likely to take weeks if not months. The impact of COVID-19 could be much longer. In both cases, farmers have been sideswiped by events they couldn’t have anticipated.

Optimists will point out that people still need to eat, but countries crippled by quarantine and self-isolation aren’t likely to have normal imports or consumption. You also have to wonder about the products exported by China, such as active ingredients for many crop protection products. As reported by Sean Pratt in last week’s edition of this newspaper, China’s production and export of phosphate fertilizer is also being affected.

The world market for pork and beef should have been poised for a big price boost with African swine fever decimating an estimated 40 to 50 percent of China’s hog population. COVID-19 has dimmed those prospects, at least temporarily.

The diplomatic issue between Canada and China over a detained Huawei executive has now passed the one year mark, another example of agriculture being sideswiped by an unrelated issue. While China has been buying only a fraction of the Canadian canola it usually purchases, it has remained a vital market for canola oil, peas and wheat.

There’s always a statistical lag, but when the numbers are finally available, analysts will be looking to see what COVID-19 is doing to the pace of these sales.

With stock markets plummeting, the crisis is already generating big economic losers. Grain futures don’t function in isolation to the stock market so they’ve also been pressured.

Back in 1986, the Chernobyl radiation scare had people worried about a contaminated food supply over a large portion of Europe and grain prices briefly spiked. There would appear to be no upside food demand from COVID-19, unless it comes from people stockpiling essentials to ride out a perceived crisis.

There’s certainly a huge demand for respiratory masks and disease test kits. On the other hand, airline companies are taking a big hit from cancelled flights into China and elsewhere. Tourism will be hurt worldwide, including tourists coming to Canada. Will cruise ships ever fully recover from the spectre of them becoming floating quarantine prisons?

Any intelligent person should realize there’s no connection between coronavirus and Corona beer, but the population isn’t as smart as you might think. Sales of the beer have plummeted despite the official name of the virus being changed to COVID-19. Fear and misconceptions could end up more dangerous than the actual disease.

Hopefully, the threat fades and the lives of people in the hardest hit nations can return to some semblance of normal. Unfortunately, the problem could also get worse before it gets better.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.

Source; The Western Producer