SACRAMENTO — Pandemic-related losses to California farms, ranches and agricultural businesses will range between $5.9 billion and $8.6 billion this year, according to an economic study released today. The analysis says the state’s agricultural sector has already suffered $2 billion in losses so far, from disrupted markets and rising production costs related to the COVID-19 outbreak.
Produced by Davis-based ERA Economics, the study was commissioned in part by UnitedAg, Ag Association Management Services Inc., the California Fresh Fruit Association, the California Strawberry Commission, the California Tomato Growers Association, Western Plant Health Association, and led by the California Farm Bureau Federation.
The study finds that the financial impacts of the pandemic vary widely among different parts of the agricultural economy. These impacts depend, 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.
“Observing how agriculture is affected will help us orient and decisively act to create a stronger future,” UnitedAg President and CEO Kirti Mutatkar said. “The agricultural industry is not only one of the most necessary industries, but one of the most resilient.”
Analysts looked specifically at 15 different agricultural sectors, using data on production, exports and prices through early May, plus interviews and surveys of people and businesses.
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.
The report also finds 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.
Some crops have seen increased business activity during the pandemic, like shelf-stable items such as rice, processed tomato products and canned fruit. But in aggregate, the study says, “the losses far outweigh the isolated benefits.”
Abrupt shifts in purchasing patterns in export and domestic markets—prompted by the constriction in restaurant and other food-service sales and a swing to retail purchases for at-home use—have affected farmers, ranchers and agricultural businesses at various points in the supply chain, the study says, ultimately resulting in farm-gate crop price impacts.
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