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The Importance of Agriculture in the Economy: Impacts from COVID‐19

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  • Jayson Beckman
  • Amanda M. Countryman

Abstract

Much of the attention from COVID‐19 has been on the impacts on tourism and other service sectors; but there has been a growing interest in some agricultural and food topics, such as the decline in food away from home (FAFH) expenditures. Our work considers the importance of FAFH in the overall economy, and we also consider changes in agricultural production and trade that have occurred because of COVID‐19. We gather data on actual changes to these components, as well as similar shocks to non‐agricultural sectors, and employ a simulation model to estimate the impacts on gross domestic product (GDP). Results indicate that changes from agriculture due to COVID‐19 have had a larger effect on the overall U.S. economy than the share of agriculture in the economy at the beginning of COVID‐19. But the non‐agricultural shocks still outweigh the impacts from agriculture by a magnitude of 3. Breaking the results down along the components, we find that the loss in FAFH expenditures is the largest contributor to the change in GDP resulting from shocks to agricultural markets and conclude that agricultural production/trade markets have been very resilient during the pandemic. Our results also indicate that our model (computable general equilibrium) does reasonably well in estimating GDP compared to actual changes due to the inclusion of data on actual demand, supply, and fiscal responses to COVID‐19.

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  • Jayson Beckman & Amanda M. Countryman, 2021. "The Importance of Agriculture in the Economy: Impacts from COVID‐19," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1595-1611, October.
    • Handle: RePEc:wly:ajagec:v:103:y:2021:i:5:p:1595-1611
    DOI: 10.1111/ajae.12212
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    1. Capitani, Daniel Henrique Dario & Gaio, Luiz Eduardo, 2023. "Volatility Transmissionin Agricultural Markets: Evidence from the Russia-Ukraine Conflict," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 11(2), April.
    2. Beckman, Jayson & Gale, Fred & Morgan, Stephen & Sabala, Ethan & Ufer, Danielle & Valcu-Lisman, Adriana & Zeng, Wendy & Arita, Shawn, 2022. "China's Import Potential for Beef, Corn, Pork, and Wheat," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2020(Economic ), August.
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    4. Beckman, Jayson & Ivanic, Maros & Nava, Noé J., 2023. "Estimating Market Implications from Corn and Soybean Yields Under Climate Change in the United States," Economic Research Report 338944, United States Department of Agriculture, Economic Research Service.
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    7. Guglielmo Maria Caporale & Anamaria Diana Sova & Robert Sova, 2022. "The Covid-19 Pandemic and European Trade Patterns: A Sectoral Analysis," CESifo Working Paper Series 10115, CESifo.
    8. Erdal Erol & Sayed H. Saghaian, 2022. "The COVID-19 Pandemic and Dynamics of Price Adjustment in the U.S. Beef Sector," Sustainability, MDPI, vol. 14(8), pages 1-14, April.
    9. Dogan, Eyup & Majeed, Muhammad Tariq & Luni, Tania, 2022. "Analyzing the nexus of COVID-19 and natural resources and commodities: Evidence from time-varying causality," Resources Policy, Elsevier, vol. 77(C).
    10. Gao, Yixuan & Malone, Trey & Schaefer, K. Aleks & Myers, Robert J., 2023. "Disentangling Short-Run COVID-19 Price Impact Pathways in the US Corn Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    11. Morgan, Stephen & Arita, Shawn & Beckman, Jayson & Ahsan, Saquib & Russell, Dylan & Jarrell, Philip & Kenner, Bart, 2022. "The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture," Economic Research Report 327180, United States Department of Agriculture, Economic Research Service.
    12. Vaiknoras, Kate & Hahn, William & Padilla, Samantha & Valcu-Lisman, Adriana & Grossen, Grace, 2022. "COVID-19 Working Paper: COVID-19 and the U.S. Meat and Poultry Supply Chains," Administrative Publications 327338, United States Department of Agriculture, Economic Research Service.
    13. Carter, Colin A. & Steinbach, Sandro & Zhuang, Xiting, 2022. "Global Container Trade Disruptions and U.S. Agricultural Exports," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322364, Agricultural and Applied Economics Association.
    14. Shuai Qin & Zheying Han & Hong Chen & Haokun Wang & Cheng Guo, 2022. "High-Quality Development of Chinese Agriculture under Factor Misallocation," IJERPH, MDPI, vol. 19(16), pages 1-20, August.
    15. Shuai Qin & Hong Chen & Tuyen Thi Tran & Haokun Wang, 2022. "Analysis of the Spatial Effect of Capital Misallocation on Agricultural Output—Taking the Main Grain Producing Areas in Northeast China as an Example," Sustainability, MDPI, vol. 14(10), pages 1-17, May.
    16. Arita, Shawn & Grant, Jason & Sydow, Sharon & Beckman, Jayson, 2022. "Has global agricultural trade been resilient under coronavirus (COVID-19)? Findings from an econometric assessment of 2020," Food Policy, Elsevier, vol. 107(C).
    17. Gaofeng Guan & Dong Liu & Jiayang Zhai, 2022. "Factors Influencing Consumer Satisfaction of Fresh Produce E-Commerce in the Background of COVID-19—A Hybrid Approach Based on LDA-SEM-XGBoost," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    18. Liu, Li-Jing & Yao, Yun-Fei & Liang, Qiao-Mei & Qian, Xiang-Yan & Xu, Chun-Lei & Wei, Si-Yi & Creutzig, Felix & Wei, Yi-Ming, 2021. "Combining economic recovery with climate change mitigation: A global evaluation of financial instruments," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 438-453.
    19. Farris, Jarrad & Morgan, Stephen & Johnson, Michael E., 2022. "COVID-19 Working Paper: The COVID-19 Pandemic and Changes in Greenfield Foreign Direct Investment in Africa," USDA Miscellaneous 329078, United States Department of Agriculture.
    20. Solomon Odiase & Sayed H. Saghaian, 2022. "Impact of COVID-19 Pandemic on Vertical Price Transmission in the U.S. Fresh Banana Market," Sustainability, MDPI, vol. 14(10), pages 1-16, May.
    21. Xinyue Lin & Lingli Qi & Haoran Pan & Basil Sharp, 2022. "COVID-19 Pandemic, Technological Progress and Food Security Based on a Dynamic CGE Model," Sustainability, MDPI, vol. 14(3), pages 1-18, February.
    22. Carter, Colin A. & Steinbach, Sandro & Zhuang, Xiting, 2022. "Global Shipping Container Disruptions and U.S. Agricultural Exports," Working Papers 320397, International Agricultural Trade Research Consortium.
    23. Zhaojun Wang & Amanda M. Countryman & James J. Corbett & Mandana Saebi, 2021. "Economic and environmental impacts of ballast water management on Small Island Developing States and Least Developed Countries," Papers 2108.13315, arXiv.org.
    24. Khilda Faoziyah Arifah & Jonghwa Kim, 2022. "The Importance of Agricultural Export Performance on the Economic Growth of Indonesia: The Impact of the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    25. Ibrahim Niftiyev & Gubad Ibadoghlu, 2023. "Longitudinal Principal Component and Cluster Analysis of Azerbaijan’s Agricultural Productivity in Crop Commodities," Commodities, MDPI, vol. 2(2), pages 1-21, May.

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