LLINOIS (WCIA) — The COVID-19 pandemic hit agriculture harder than many industries.

Reductions in ethanol refining, meat packing plant closures, and changes in domestic food consumption all contributed to a drop in the farm economy.

Agriculture has been in a long-term downtrend for the past 6 to 7 years going into the pandemic, then things got worse, says Federal Reserve economist Nathan Kauffman. 

“From January until April as we looked at developments in travel and focus specifically on how that might affect agriculture it is worth underscoring here that ethanol production had been down by about 50%,” Kauffman says. “So at the peak of the crisis, or what I would call the peak of the crisis in late March and early April, we were hearing about a number of ethanol plants that were closing down and production was about at a 50% level.

“So that was one of the first developments and obviously has implications for agriculture in the Midwest but specifically connected to corn and other grain operations.

“The second was all of the supply chain disruptions we saw alongside COVID-19 so we know of cases that had been rising early on were now of more concern as it relates to increases in cases. But where some of those cases started to show up was specifically in meat packing plants and we had been seeing some fairly significant supply chain disruptions for those types of operations that would have been having some cases initially as it related to COVID-19 and needed to close down temporarily.

“Relative to the months before the pandemic and comparing those months with April and May, the percentage of the amount of dollars that were spent on food away from home, meaning at restaurants specifically, had declined by about 50%.

“So on average before the pandemic we would have expected the amount of money that consumers and households spent on food was roughly similar, or roughly equal between food spent away from home and food spent at grocery stores  for consumption at home, but there was a notable change in how consumers were obviously  buying food, so that was the third thing.”

Kauffman adds the farm economy has improved this fall.