‘This will be a wallop’: Rural areas brace for hard economic hit

Labor force participation was slower to recover since the 2008-09 Great Recession in rural counties, while the income gap between metro and non-metro areas has only widened over the last decade.

As painful as the last economic downturn was for rural regions, the current crisis poses its own problems that could ultimately be more devastating.

“This is gonna be a whole new game,” said Ian LeMay, president of the California Fresh Fruit Association, which represents grape, blueberry and tree fruit growers and shippers. “There are probably lessons we have learned from ‘08, but I think the dynamics around what we’re seeing are much different and potentially could be longer-lasting.”

USDA, for its part, has taken steps to help rural communities brace for the pandemic, like easing requirements for food assistance as well as rural housing programs that support low-income people. The latest Senate bill is also giving the Agriculture Department more power and $23 billion more to directly aid farmers and ranchers affected by the economic fallout.

With widespread school closures across the country, many classes have gone virtual. But that’s not an option for plenty of students who lack reliable internet access at home, a disparity known as the digital homework gap.

More critically, those shutdowns have made it harder to feed low-income students who rely on schools for subsidized meals. Districts face extra challenges in trying to feed rural school children, like wide distances between their homes and meal pickup sites.

Shrinking access to cash-strapped and far-flung hospitals could also become a bigger crisis as the pandemic spreads to rural communities, where residents on average are older and more likely to have underlying health issues, according to USDA.

Rural America “has a higher proportion of people vulnerable to the virus,” with less ability to work remotely, economists with the liberal think tank Center for American Progress wrote earlier this month.

“Because of the economy that rural Americans face, they do not have the capacity to keep themselves safe from COVID-19 and continue to make a living,” it warned.

Another ‘black swan’ for farmers

Farmers and ranchers are already seeing their bottom lines eroded by the virus, which is hitting the U.S. just as planting begins across most of the country. The outbreak — and strict preventative measures to contain it — might even stretch into harvest season, with the first wave set to launch as soon as April in farming regions like the West Coast.

“These type of black swan events, you can’t anticipate it,” said John Newton, chief economist for the American Farm Bureau Federation. “It’s a shock to the global economy. We will rebound and recover — it’s just a matter of how long’s the drag on this.”

Tom Slunecka, CEO of the Minnesota Soybean Research and Promotion Council, said in February that it could take months to make up for the initial trade losses as the virus spread through China earlier this year. That shut down ports and factories while shipments of food and farm goods piled up.

China is an irreplaceable market for soybean growers in the Upper Midwest who ship the vast majority of their beans there, Slunecka said. But farmers have been hamstrung by retaliatory tariffs over the last two years, crushing Chinese demand and weighing on soybean prices.

The coronavirus is threatening to keep the downward pressure on prices in 2020. May soybean futures, which were roughly $9.70 per bushel at the start of the year, plummeted more than 16 percent by mid-March.

“We desperately need some relief in our commodity prices,” Slunecka said. “There are a large number of farms that are hurting to a level that they haven’t seen in five years.”

The global economic slowdown could also tie up imports and limit producers’ access to critical supplies, from farm chemicals to the computer systems on their combines, many of which are manufactured abroad.

“We’re at the mercy of the global system to make sure that our inputs are there on time,” said Slunecka. “We’ll purchase what we can early, and the rest is just going to be a wild card.”

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