COVID-19 hitting California agricultural economy hard
California farms, ranches and agricultural businesses will suffer billions of dollars in COVID19-related losses this year.
According to an economic study released Tuesday, the state’s agricultural sector already has lost $2 billion and could suffer losses ranging from $5.9 billion to $8.6 billion this year from disrupted markets and rising production costs related to the COVID-19 pandemic.
The study was conducted by Davis-based ERA Economics and commissioned by the California Farm Bureau Federation and included UnitedAg, Ag Association Management Services, California Fresh Fruit Association, California Strawberry Commission, California Tomato Growers Association and Western Plant Health Association.
Financial impacts of the pandemic vary widely among different parts of the agricultural economy, the study said, depending in part on how much a particular crop or commodity relies on sales to food service and how much it has been affected by shifts in retail demand and changes in costs of production and processing.
In San Joaquin County, the top four products annually are dairy, wine grapes, almonds and walnuts. The study showed the greatest dollar-loss impact to dairy, $1.4 billion to $2.3 billion; grapes, $1.5 billion to $1.7 billion; and flowers and nurseries, $660 million to $740 million.
“It’s what we’ve been hearing,” said Bruce Blodgett, executive director of the San Joaquin Farm Bureau Federation. “Only time will tell. We’ve been a little more fortunate than some areas. We didn’t get hit as hard as Monterey and some areas in Southern California at the time when they harvested and had nowhere to take it.”
Blodgett said dairy has been hit hard and prices for producers of lamb and beef have shrunk, though consumers are paying more at the grocery store.
“The price to consumer is going up and the price to producer is going down significantly and that’s reflected everywhere in the study,” Blodgett said.
The pandemic shut down wine tasting rooms, cellardoor tastings, and restaurants. This had a devastating effect on demand for wine. It has been particularly bad for smaller wineries and specialty labels that are not sold through retail outlets. As the season progresses and California growers begin to harvest wine grapes, growers are likely to see wineries pass on impacts in the form of lower grape prices, particularly for the spot/bulk market.
Analysts looked at 15 different agricultural sectors, using data on production, exports and prices through early May, plus interviews and surveys of people and businesses.
In addition, the report said farms, ranches and related businesses have incurred higher operating costs for measures intended to increase employee health and safety, and in the logistics required to move crops and commodities to market.