A new analysis from the National Corn Growers Association projects a drastic drop in 2020 revenues as a result of the COVID-19 pandemic. The latest analysis projects a $59 per acre average revenue decline for the 2019 corn crop and an $89 per acre average revenue decline for 2020, compared to pre-COVID-19 projections.
NCGA First Vice President John Linder, a farmer from Ohio, says that would place 2020 crop year corn revenue at its lowest level since 2006.
“The impact of COVID-19 on corn markets has been pretty stressful to corn farmers. It obviously begins with the marketing of the remaining stored 2019 corn crop which declined tremendously in value. And, that impact was an average of $59 an acre and I’m sure for some in certain regions, that could be closer to $100 an acre loss on the 2019 stored crop.”
The analysis was conducted by Dr. Gary Schnitkey of the University of Illinois using projections for 2019, 2020, and 2021 for pre-COVID and post-COVID scenarios. It follows a previous analysis built on market numbers to date, along with estimates of state-level impacts.
Linder says the results show residual impacts from COVID-19 on corn prices are likely to persist into 2021 and possibly beyond.
“This is going to have a long tail. It doesn’t curve off in 2020, the losses get greater and 2021 doesn’t show a lot of promise without a lot of recovery. So, we need to be very engaged with Congress. What risk management NCGA has worked on for so many years to keep farmers in a good place has not been able to keep pace with the loss that COVID-19 has brought on to us.”
NCGA shared the results with lawmakers this week. Linder says congress needs to take additional steps to help farmers further mitigate the impact of the pandemic.
“It’s an awareness letter at this point to begin a conversation on the potential for future relief. The COVID-19 payments that they have given out, and the availability for agriculture to participate in that, it’s not a revenue that makes anybody whole. And, farmers are still having pain from 2019. What’s happened so far hasn’t been really enough to make the impact to make balance sheets very pretty going forward.”
Linder, who serves on NCGA’s COVID-19 Task Force, says work by NCGA and others will continue to help lead agriculture through the pandemic.
“As I think about going forward, boy, it’s not going to be easy, but we’ve been here in the past. Farmers are traditionally optimistic, and we appreciate their engagement with us. We’d love to hear from our membership, as well as, we’re representing 300,000 corn farmers in the United States. We are very deeply engaged in the conversations that need to be had. Certainly, welcome them to reach out to us and share their story so we can share it as we go forward on their behalf.”
Learn more and find the analysis online at NCGA.com.