It’s a hit at just about the worst time. Iowa and Nebraska coming off a decade’s high year for farming bankruptcies; now facing plummeting demand for everything from livestock to ethanol amid the coronavirus outbreak.
“It’s just a really scary situation,” said Curt Mether, Chair, Iowa Corn Growers Association.
Mether considers himself fortunate to be out hauling corn for delivery Wednesday morning; noting he’s being hit from every direction right now, starting with ethanol.
“The oil prices are so cheap that ethanol isn’t hardly competitive anymore,” said Mether.
Saudi Arabia and Russia locked in an oil price war, coupled with people staying at home, not getting in their cars, and not needing gas.
“We’re really worried about the ethanol demand and that’s about another third of the crop, of the corn crop of the nation,” said Mether.
And it doesn’t stop there. Another third of the corn crop goes to feed cattle and hogs.
“Livestock market, the meat market, demand has plummeted,” said Mether.
The pandemic shutting down restaurants and major sporting events and even threatening to close meat-packing plants.
“It’s really the uncertainty that’s causing such volatility and agriculture has been going through for two years now,” said Mether, referring to trade wars with China, Canada, and Mexico, most of which have been resolved, but not without financial toll.
Many midwest farmers also have to tack on losses from last year’s historic flooding.
“I’m an incurable optimist but it’s been two years now, one thing after another,” said Mether.
The market for soybeans and corn was already looking bleak back in January.
“At that snapshot in time a couple of months ago there was a slight window for profitability, a larger window for the potential to break even, and unfortunately some farmers were looking at a situation where they might be operating in the red in 2020,” said Andrew Wheeler, Iowa Farm Bureau.
Many farmers are hedging their bets right now; hoping the market makes a quick come back.
“Nobody’s selling because you just want to wait and see what happens, but that’s risky because it could get worst,” said Mether.
Last year 27 farmers in Iowa filed for bankruptcy. While Nebraska tied for second, with Kansas and Georgia, for the most bankruptcies in the country in 2019 with 37 filings.