That was the sub-title of an article that Mike Boehlje and I wrote for the Wall Street Journal in their Year in Review. Here is the initial bit.
“Disruption! Chaos! Volatility! These are the words that best describe food and agricultural markets, and the business climate that food retailers, processors, input suppliers and farmers faced in 2020. It has been a roller-coaster ride of highs and, mainly, lows both for food consumers and the industry.
The year started with some optimism. Food prices were stable, the trade war was subsiding, and agricultural-commodity prices were showing some strength. China’s hog herd had been decimated by African swine fever, and U.S. hog producers were building inventory in anticipation of burgeoning exports.
Then Covid-19 hit.
Nearly overnight, there was a near-total destruction of demand from restaurants, cafeterias and other food-service venues. Simultaneously, there was a spike in demand for food bought through supermarkets and grocery stores. Spending on food at home was 22% higher in March than January; spending on food away from home was 47% lower in April than January.
The demand shocks had notable effects on consumers, ranging from empty grocery-store shelves to a rapid increase in retail food prices. From March to April, retail prices increased 2.6%, a monthly increase higher than any since the dramatic inflation witnessed in the 1970s.”
We discussed the impacts of COVID at the farm level and the recovery in farm prices that have ensued this fall. Here are our closing words.
“In all, the events of 2020 will likely be remembered as catalysts for significant changes in the food system—and the source of great uncertainty for consumers and suppliers. Making the supply chain more resilient, for instance, may mean higher prices for consumers. And farms may lean more heavily on automation to protect against the impact of future pandemics—eliminating many jobs.
Those sorts of trade-offs are likely to be the new normal in the industry for years to come.”
You can read the whole thing here.