The Post COVID-19 Agricultural Economy: What?

With lineups at grocery stores in Ontario urban areas, a light is being shone a spotlight on our food system. The lack of emphasis in Canadian agricultural policy is showing. Farmers have long thought there will be no real change until consumers see the spectre of empty shelves. Needless to say, nobody wanted to listen. As the Covid-19 pandemic grows, things are happening that I could never imagine.

In this country consumers have always gone to bed never imagining that there might not be food in the grocery stores tomorrow. However, over the last few days and weeks, we’ve seen empty shelves in many urban grocery stores as panicked consumers let fear get the best of them. Premier Doug Ford of Ontario has asked people not to panic buy. However, the human condition is what it is. People get scared.

I’m not a medical professional, I’m no scientist. I’m fearful like everybody else about getting the virus and feeling good. Remember, I’ve written this column for 34 years. You do the math. The world has changed and with it so has our agricultural horizon and our agricultural policy landscape.

Many governments have acted with massive fiscal stimulus. Last week parliament passed a stunning $107 billion-dollar stimulus plan to help the greater Canadian economy. $107 billion dollars is a lot of money, huge compared to our GDP and shows how serious things are. No Canadian opposition party would dare criticize it.

The money will go to finance mortgage deferrals, and for paying employees of small business. Of course, it’s also there to keep liquidity in the market. In other words, with the economy frozen up with fear, there has to be money there. There are a series of loans available to business and extra money for provinces to fund health care. There was even a special mention of farmers, who will be provided with more short-term credit through Farm Credit Canada. It was extensive in its breadth, massive in scale.

Tell me that would happen a month ago and I would have called you crazy. Needless to say, the Covid-19 Black Swan just keeps on giving. As farmers, everybody is nervous. Today, I got two calls from journalists asking to speak to me about the ramifications to Canadian agriculture from Covid-19. My one salient point I told both journalists was “tell me when this pandemic ends” and I’ll let you know potential impacts. The problem is nobody knows that.

As is, COVID19 forced corn and soybean prices down early in January when the Chinese first had their problems in Wuhan China. Sure, May soybean futures are $8.43 and corn futures $3.45, but much of that came early. In the last few weeks our commodities are down but this market has not resembled the nuclear meltdown which has been happening in equity markets.

There will be issues going forward. The Canadian horticultural sector surely will have some issues as offshore labour was banned from coming into Canada. However, this has changed as Canadian agriculture needs offshore workers to work in our fields and help process our crops. The problem lies in the social distancing. Clearly, we all know COVID19 doesn’t discriminate.

As I write this, the US Canadian border is getting thicker. Starting last Saturday, only essential traffic will be going both ways. So, I won’t be going to any Detroit based sports events and it’s up to debate exactly what that will mean for agricultural commodities going both ways. However, with Canada and the US being each other’s largest trading partner, its likely to be friendly to farmers. However, there is no doubt, the US Canada border is getting thicker and that doesn’t bode well for anybody.

If it gets too thick, costs will rise, and it might even cause a change in pricing structure for Canadian grains. However, I’m getting ahead of myself with that. This morning I was asked about the positives and negatives for Canadian agriculture brought to us from COVID19 and I almost laughed/cried. Simply put, there are no positives regarding COVID 19. Let’s keep this real.

Right now, it’s about self-isolating and flattening the curve on new infections. This is a once in a lifetime event, which surely is challenging everybody. It changed our world and that certainly won’t end. The reason being is someday when COVID 19 does end, the world will never be the same. Ditto for the post COVID 19 agricultural economy. However, first things first. We’ve got to get past this the best way we can.