CHOICES

CHOICES

A publication of AAEA

A publication of AAEA

Theme Overview: COVID-19 and the Agriculture Industry: Labor, Supply Chains, and Consumer Behavior

Luis Peña-Lévano, Grace Melo and Shaheer Burney
JEL Classifications: J01, J09, J15, J18, J28, J44, J64, D19, P46, D90, H31, Q13, R49
Keywords: Agricultural production, Covid-19, Supply chains, Labor, Unemployment
Citation: Peña-Lévano, L., G. Melo, and S. Burney. 2020. "Theme Overview: COVID-19 and the Agriculture Industry: Labor, Supply Chains, and Consumer Behavior" Choices. Quarter 3. Available online: https://www.choicesmagazine.org/choices-magazine/theme-articles/covid-19-and-the-agriculture-industry-labor-supply-chains-and-consumer-behavior/theme-overview-covid-19-and-the-agriculture-industry-labor-supply-chains-and-consumer-behavior

Following a period of sustained growth that lasted over a decade, the U.S. economy was plunged into a recession by the onset of the COVID-19 pandemic in the first quarter of 2020. While the pandemic’s impact has been felt throughout the economy, the agriculture industry has been particularly affected as a range of COVID-19 related factors have disrupted agricultural supply chains. Despite the U.S. Department of Homeland Security’s designation of the food and agriculture sector as “critical infrastructure” during the pandemic, demand and supply-side labor issues have been predicated by state stay-at-home mandates, restaurant and school closures, virus outbreaks at food-processing facilities and farms, precautionary measures implemented by agricultural businesses, immigration policies, and consumers’ spending behavior, among other things. As state governments relax shut-down orders in mid-2020 and businesses begin to reopen, uncertainty surrounds the economic outlook for the agriculture industry. Further complicating the situation is fear of another spike in nationwide COVID-19 cases in the coming months.

The articles in this theme discuss many facets of the effect of COVID-19 on agriculture supply chains, with a particular emphasis on labor concerns. In addition to providing a broad perspective on issues affecting the overall agriculture industry, these articles focus on specific challenges facing U.S. agriculture and its subsectors due to the COVID-19 pandemic. Given the rapidity with which the crisis has evolved, the main intent of these articles is to describe the situation in its current form. However, they also provide some insight into the short-term and long-term implications for the agricultural industry.

Peña-Lévano, Burney, and Adams provide a broad overview of how COVID-19 has displaced employment in agriculture and its three subsectors: production, processing, and retail. For comparison, they also report on the employment situation in non-agriculture industries. This article goes on to discuss employment effects by race and ethnicity and highlights differences among Hispanic, black, and white populations. Furthermore, this article includes a section on government response to the economic disruptions caused by the pandemic.

Farnsworth explores the implications of government policies—such as paid leave for workers, required and recommended safety practices, and travel restrictions on immigrant workers—for the supply and demand of agricultural labor. The author concludes that the predicted effect of these policies is to decrease the availability, efficiency, and overall productivity of these workers and that these policies will likely lead to higher production costs, particularly for more labor-intensive crops like fresh fruits and vegetables.

Onel, Simnitt, Stacciarini, and Tovar-Aguilar's study COVID-19 risk factors for Florida farmworkers by immigration status, specifically they study H-2A guest workers and unauthorized farmworkers. In addition, they discuss implications of their findings for planning targeted measures for the health and safety of both legal status groups and for keeping crop farms operational amid the battle against the new virus.

Escalante, Luo, and Taylor also focus on the immigration status of farm labor. In particular, they consider how travel bans, strict medical screening at ports of entry, and virus outbreaks at the border have affected the arrival of H-2A workers in the United States. They explain how labor could be a disrupting factor as farms strive to meet sustained demand during the pandemic.

Walters, Wade, and Suttles discuss shocks to the food supply chain, review the regulatory exemptions granted to the transportation sector, and provide insight on emergency relief efforts. The authors conclude that human resources have presented the greatest risk exposure to the U.S. food supply chain but have also been the most significant asset underlying the innovative response to unprecedented shocks.

Finally, Melo explores the demand-side impact of the COVID-19 pandemic. Specifically, she discusses changes in consumer behavior and purchasing patterns. The author determines that as the crisis began, consumers exhibited emotion-driven behavior, characterized by panic buying. After a period of adjustment, consumers switched to rational actions. The author also describes potential new norms in purchasing behavior and food retail in the future, such as technology-driven online shopping and new developments in food safety standards.

Luis Peña-Lévano (lpenalevano@ufl.edu) is Faculty of the Food and Resource Economics Department, University of Florida, Plant City, FL. Grace Melo (grace.melo@uc.cl) is Assistant Professor, Agricultural Economics Department, Pontifical Catholic University of Chile, Chile. Shaheer Burney (shaheer.burney@uwrf.edu) is Assistant Professor of Agricultural Business, Department of Agricultural Economics, University of Wisconsin-River Falls, River Falls, WI.