U.S. Farm Sector Financial Measures Show Little Variation From Prepandemic Expectations

In early 2020, the U.S. farm sector appeared to be on track for steady financial performance for the year. In February 2020, USDA, Economic Research Service (ERS) forecast net farm income would rise slightly that year from 2019 and net cash income would decrease to slightly below its long-run average (2000–18) in inflation-adjusted dollars. The next month, however, the U.S. Government declared a national emergency over the Coronavirus (COVID-19) pandemic, setting off disruptions to the overall economy and affecting both supply and demand for agricultural commodities. Stay-at-home orders and travel reductions resulted in a sudden sharp decrease in fuel consumption. That, in turn, led to a drop in ethanol prices and, therefore, prices for commodities, such as corn, used to make ethanol. Schools and restaurants closed or curtailed their hours, reducing demand for many food commodities. The supply chain was also disrupted because meat-processing plants shut down. For the U.S. farm sector, the pandemic resulted in diminished sales, lower prices, and other losses such as milk dumping by dairy farmers when schools and restaurants canceled orders.