California's agriculture industry, the nation's largest, has already lost $2 billion due to the coronavirus pandemic and stands to miss out on an estimated $8.6 billion this year, according to a new report commissioned by the California Farm Bureau Federation and others released Tuesday.
The report studied 15 different parts of the agriculture industry, using data through early May. Dairy is unsurprisingly expected to see the largest total loss — somewhere between $1.4 billion and $2.3 billion — as it accounts for nearly one-fifth of the state's $50 billion agriculture industry. Second on the list, grapes could see more than a $1.5 billion loss, followed by flowers at more than $660 million.
Jamie Johansson is the president of the federation — and a citrus and olive grower in Northern California — and in a statement announcing the report he called on the state to stop writing new regulations that further stress the economics of farming.
“California farmers, ranchers and their employees have continued the essential work needed to keep American families fed, but that work has come with sacrifice," Johansson said. "The impact is being felt in rural communities throughout the state that rely on agriculture for their residents’ livelihoods."
The report, produced by ERA Economics, pointed to unstable markets and rapidly shifting purchasing behaviors as the main drivers behind the loss in farm revenue. In the case of some products like pork, virus outbreaks in packing plants created bottlenecks in the supply chain, forcing farmers to kill, disk or otherwise destroy their animals and crops.
Like the rest of the state, local farmers working the large swaths of cropland in the eastern Coachella Valley and the Imperial Valley have taken the pandemic on the chin and, in some cases, have been forced to branch out in search of new markets.
Lettuce and other leafy greens are typically a $2.5 billion sector in the Golden State, with Imperial County accounting for the second-largest portion of lettuce production. But the pandemic hit while those crops were being harvested.
"Shippers positioned for that industry suffered immediate impacts that resulted in dumped product and fields that were not harvested," according to the report. "Several Imperial Valley growers interviewed for this study reported losing entire crops totaling millions of dollars in product."
While crops headed to grocery stores have generally seen stable sales, those reliant on restaurants and other food service were at-risk.
The report cited data from OpenTable, an online platform for restaurant reservations, that showed how emergency orders around the country completely wiped out dine-in business in mid-March. By June, dine-in business nationwide had only risen back to about 20% what it was before the virus landed in the U.S.
Despite having food available for delivery or pick-up, restaurants took a big hit beginning in March. Meanwhile, the slight uptick in sales at grocery stores didn't make up the difference.
A similar trend played out in employment numbers, where the total number of people working on California's farms dropped 23% between April 2019 and 2020. Employment at the state's bars and restaurants fell 46% in that same time frame, while grocery stores hired only 1% more workers.
Chris Zanobini, president and CEO of Ag Association Management Services that also commissioned the report, said the lost sales compounded rising costs associated with fighting the virus.
“Along with the loss of key markets due to food service disappearing overnight or flower shops and garden centers not being allowed to operate in certain areas, we now are adapting to significant increased operational costs that many California farmers will never recoup,” he said.
However, advocates disagree with the industry's complaints and argue that more, not less, needs to be done to secure personal protective equipment for farm workers who often live in conditions where the virus is likely to spread.
Mark Olalde covers the environment for The Desert Sun. Get in touch at molalde@gannett.com, and follow him on Twitter at @MarkOlalde.
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California agriculture industry could lose $8.6 billion due to coronavirus pandemic - Desert Sun
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