The short and mid-term Covid-19 impact on agriculture: farm machinery

Agriculture is a component of “critical infrastructure” in the U.S. as the COVID-19 virus situation continues to unfold and attention expands from human health concerns to re-engaging the workforce. That means the farm machinery and equipment sector has generally continued to function largely unscathed, though the virus has created operational challenges and could force wide industry changes in the long term.

Short-term protective measures

In the thick of the shutdown prompted by the virus, agriculture in mid-April was one of the sectors still functioning as near to normal as possible. With row crop planting underway in the central U.S. and Corn Belt, demand was high for maintenance services to keep machinery moving at one of the most important times of the year for corn and soybean farmers.

Though the work is continuing, dealerships and companies have taken precautions to ensure the safety and health of everyone involved in the maintenance process, according to Casey Seymour, founder of Moving Iron LLC, a website dedicated to ag equipment remarketing and used equipment managers, and remarketing manager at 21st Century Equipment in Scottsbluff, Nebraska.

“I work in an industry that has to plant a crop, harvest a crop and feed livestock. We have taken social distancing precautions to keep our employees and customers safe, from allowing only a certain number of customers in the showroom at a time to having field service techs and sales reps stay in the field and work from home,” Seymour said. “With all this going on, we are still moving parts and machines and conducting service at the pace or greater than the pace of this time last year. It is no doubt a scary time, but things are plugging along as well as one could hope.

Labor implications down the road

One of the trends in agriculture the COVID-19 situation has accelerated is the confrontation of the growing challenge of a shrinking pool of qualified labor in many sectors of the industry. Machinery maintenance is one of the areas facing this challenge, and the mid- and long-term effects of COVID-19 on farm machinery. The human response will include changes to how machinery is manufactured and serviced in the field, according to Ryan Oppewall with Oxbo International Corporation, manufacturer of harvesting and application equipment for a diversity of crops. Fortunately, he said his company’s been able to adjust to the constraints placed on different labor components of connecting farmers with the right equipment.

“This has been a trend with the tight labor market and the rising cost of labor, but the situation with COVID-19 is accelerating the pace of adoption. Due to the structure of our production environment, we’ve been able to respond to increased demand, building to order new equipment for the markets that are looking to scale up their use of mechanical solutions,” Oppewall said. “In some cases, rising to this increased demand is putting pressure on our supply chain as we look to source additional components and turn around orders as quickly as possible; but, for the most part, our vendors are working hard to deliver the parts we need to keep producing equipment.”

The trend of rising mechanization

Just as it’s been a priority for Oxbo, keeping employees safe and healthy has been an enormous priority in agriculture just as it is across the entire economy. That’s a daunting task in some sectors of agriculture that depend on manual labor, like in meat processing facilities and fields and orchards in the western U.S. that yield scores of different consumer products. The labor market was already enduring strain in those sectors, making it difficult for farms to meet labor needs on a regular basis. While the COVID-19 situation has exposed the evolving labor needs of the ag sector in general, it’s also shown how mechanization can help overcome shortages in qualified labor that have challenged farm operators and managers.

“Most recently, we have seen an increase in interest for our equipment in markets that still rely, in some capacity, on hand labor. Concerns over the lack of H2A [Visa] workers for the upcoming season and concerns about changing labor guidelines related to social distancing and sanitation are creating more demand for equipment — and in some markets more openness — to mechanical operations than we would normally see,” Oppewall said. “People are looking to our equipment to ensure they can deliver their crop to the market when it is ready and to mitigate their reliance on hand labor.”

In the longer term, Oppewall expects the labor situation to continue to evolve long after the COVID-19 virus is under control and economic activity is resumed. Mechanization will remain part of that evolution, that’s known. What’s unknown remains how much work will be required to reach the point at which the labor component of agriculture is balanced as the post-COVID-19 world reopens.

“We don’t yet know what the long-term impact will be on some of our markets. The global shutdown of schools and restaurants has caused a sharp decrease in demand for important commodities, especially corn, soybeans and dairy, which has led to a temporary oversupply. This has drastically lowered prices for these commodities,” Oppewall said. “The length and severity of this impact will depend on how quickly economies come back online.”

Editor’s note: This is the first part of our series covering the effects of the COVID-19 pandemic on the agriculture sector. See more here.

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