Agricultural economists warn America could face a farm financial crisis like none since the 1980s or the 1920s

Covid-19 is hurting the agricultural economy, but its appearance is only the latest in a string of misfortunes. "The recent Emergency (Market Facilitation) payments have put a Band-Aid over the wound for some farmers, but the fever of the underlying economic illness is still raging," Harwood Schaffer and Daryll Ray of the University of Tennessee write in their "Policy Pennings" column.

"We are facing the development of a farm financial crisis, the likes of which have not been seen since the 1980s and before that the farm crisis that began in the years following WWI and exploded during the early years of the Great Depression," Schaffer and Ray write. "Over the last five years, crop and milk prices have plummeted to the point that they are significantly below the full cost of production. While there are differences with the 1980s — 1. lending is on the basis of cash flow and not the growth in assets, and 2. interest rates are not in the stratosphere — the increasing number of bankruptcies among crop and dairy farmers provide clear signs that rougher times are still ahead."

Climate change is having a major effect on farming, though not all believe it, Schaffer and Ray write. They note that the biofuels-waiver issue hurt the ethanol industry, and supply-chain issues could become a bigger problem as more farmworkers or meatpackers get sick.