Cotton farmers and dairy farmers in Arizona were dealing with commodity price fluctuations that created business issues prior to the pandemic. While the rural communities of Arizona have not been the center of the pandemic, the food supply remains in a good position. However, the rural communities are not immune from the impact of the pandemic and it may affect their workforce at the most inopportune time. There is no doubt that the pandemic has introduced a level of uncertainty to agricultural business, including market risk regarding foreign production and demand.
Specific Relief for the Agricultural Community
As part of the economic relief plan, the Commodity Credit Corporation of the USDA received $14 billion of borrowing authority to permit additional rounds of payment with an added $9.5 billion allocated for the commodities facing the greatest difficulty including dairy, cattle and fruit markets.
Workforce Risk
Even before the pandemic, the farming industry was anticipating a labor shortage of approximately 5 percent. As COVID-19 spreads in the rural communities – worker absenteeism is expected to climb. This is further complicated by one-third of principal farmers being over the age of 65 – a high risk group. Access to migrant labor is also an open question as impacts of the pandemic on foreign policy change daily. In the early 1900s the hourly wages of labor increased at a greater rate due to the Spanish influenza than World War I. Those farmers who need labor during the pandemic may find they are paying a substantially higher rate than ever before.
If the pandemic disrupts your business, contact the business reorganization attorneys at Mesch Clark Rothschild to discuss the best strategy forward.
