USDA data shows sharp shift in agriculture trade due to COVID-19 lockdowns
As the coronavirus began to influence world markets in March, the disruption resulted in the U.S. having a negative agriculture trade balance of $501 million. In total, the U.S. exported $11.8 billion in agricultural goods and imported $12.3 billion in March.
The report, which can be downloaded from the USDA Economic Research Service website, shows March’s agriculture trade balance was down from a positive balance of $710 million in February.
March’s year-over-year comparison found exports decreased by 1% and imports rose 3%. Additionally, aside from South Asia where the U.S. saw an $88 million gain in net exports, American agriculture exports declined in all regions of the world.
Robert Harper, grain marketing manager for Virginia Farm Bureau Federation, said the USDA report is significant because it gives farmers a chance to view the balance sheet for the upcoming year. He noted that the report confirmed COVID-19’s effects on international trade.
“The report, in general, showed the early signs of how the coronavirus has affected local economies around the world and how it has hurt demand,” Harper said. “In many cases, it hasn’t been as much about demand being hurt as it is about supply chains becoming stalled out or temporarily broken.
“It’s not that we didn’t need as much supply in the world, it’s just that we couldn’t get it to where it needed to be for a period of time.”
Harper conceded that many farmers have seen commodity prices drop because of strained supply chains, but he was encouraged that many could soon see financial relief through the Coronavirus Food Assistance Program.
The USDA announced it would begin accepting applications for CFAP participation beginning May 26. The program will provide $16 billion in direct support to farmers who have suffered a 5% or more price loss and are facing significant marketing costs.
“It’s been really difficult for the producers that are carrying on planting, harvesting and selling their crops just to see the prices keep falling,” Harper said. “But when you get a shot in the arm like this, knowing that some financial assistance is coming and you can pay your bills, you’re a little more at ease.”