Economic recovery after pandemic will be slow for farmers due to trade and internet issues
Just as Wisconsin farmers were starting to see an uptick in economic optimism at the end of 2019, the COVID-19 pandemic swept away many of those hopes.
UW-Madison economist Ian Coxhead said during a panel discussion on June 11 that the economic recovery from such a blow will be long and difficult for farmers here. Coxhead said that's because the US does not have unified, enforced public health strategy to combat the virus, unlike other countries.
He also said the Trump administration's volatile relationship with China, one of the country's biggest trading partners, is a cause for concern. And a widespread lack of high-speed internet access in rural areas is causing many rural economies to fall behind entirely.
"The global economic recovery, which will outpace the United States, is not really going to benefit us all that well because the administration has turned its back on international trade," Coxhead said.
The panel, "U.S.-China Trade Tensions: What's Next for Central Wisconsin's Agriculture," was moderated by Pam Jahnke of the Midwest Farm Report. Coxhead was joined by Cooperative Network president and CEO Dan Smith; Endeavor, WI farmer and member of United Wisconsin Grain Producers Cal Dalton; and State Sen. Janis Ringhand, D-Evansville.
Coxhead said one of the biggest localized issues rural ag producers are facing right now is a lack of access to good broadband service. Especially since the pandemic has caused cuts to domestic and international travel as well as closures to many public places, that leaves farmers without an easy way to take their products to market.
Internet business has boomed since the pandemic was declared, but farmers are getting left out of the loop. Forbes reported that e-commerce sales jumped 49% during April.
"This is going to be the way that business gets done increasingly," Coxhead said. "If you're not accessing the internet with adequate coverage then, of course, that's going to be a disadvantage."
Sen. Ringhand, who represents Wisconsin's 15th district, said the state has been working on making more money available to improve internet access in rural communities. She said many of those communities only have one option for an internet service provider, if they even have broadband access, and she wants people to have multiple options that can suit different needs.
"People have ... one option that may be more costly than what they can afford," Ringhand said. "That tends to be the issue. If you have dial-up, it's less expensive. It's also very much less efficient."
Dalton, who farms cattle and corn, said he was feeling optimistic during Christmastime last year - some trade tariffs with China had been eased, and commodity prices were rising. But when March hit, commodity prices suffered massive drops again.
"COVID... pretty much destroyed our markets," Dalton said. "We saw almost a $1.00 drop in corn prices, over a $1.50 drop in soybean prices."
Dalton also said that many of his fellow farmers only have access to dial-up internet, which hinders efficient communication among sellers and buyers. He also said suppliers and the USDA's Farm Service Agency doors were closed, making it harder to get support. Even farming equipment could not be repaired quickly because there were delays on parts being shipped.
"Financially, we're going to be in a world of trouble and I think that's the same case nationwide," Dalton said.
Despite the negativity, Sen. Ringhand said Wisconsin has been successful in getting financial assistance to farmers. She said the state government has about over $108 million to pay out to farmers, second only to Iowa, who she said has $112 million in farmer aid.
But Smith said that the state's WI Farm Support Program and other financial assistance programs across the country offering one-time payments are a "Band-aid approach" to a long-term problem. He said the problem is that farmers are lacking profitability with the tools and prices given to them. Farmers cannot continue to take on debt and still come up empty, he said.
"We are putting ... dollars into farmers pockets, those dollars will be spent in the rural communities," Smith said. "$50 million is a lot of money and it's going to be very appreciated. And it's very important that we have that. But let's not confuse the Band-aid with a long term diagnosis and cure that agriculture and our rural communities are still searching for."