(CLARIFICATION) California farms, ranches and agricultural business will lose between $5.9 billion and $8.6 billion in 2020 because of the COVID-19 pandemic, according to a study commissioned by ag groups.
The study, released June 16, put the state’s agricultural economic losses at $2 billion so far. Projected losses for grape growers — including wine and raisin grapes — through the end of the year are the highest, with an estimated overall loss of up to $1.75 billion, according to the report. Table grapes losses, however, are forecast to be much lower, at “around $140 million, according to the report.
Much of the loss is directly tied to how much of the crop was grown to supply the foodservice sector, according to a news release from UnitedAg, one of the groups that commissioned the study.
Other key factors are the how much a particular crop has been affected by shifts in retail demand and changes in production and processing costs.
“Observing how agriculture is affected will help us orient and decisively act to create a stronger future,” UnitedAg President and CEO Kirti Mutatkar said in the release. “The agricultural industry is not only one of the most necessary industries, but one of the most resilient.”
Most of the direct crop losses were to fresh fruits and vegetables that were in season when the pandemic hit, according to the report.
Leading crop losses for specialty crop growers include:
- Leafy greens: $141 million-$480 million;
- Berries: $144 million-$280 million;
- Table Grapes: $140 million;
- Citrus: $164 million-$311 million;
- Nuts: $486 million to $728 million;
- Cherries and tree fruit: $49 million to $125 million; and
- Other vegetables: $450 million.
The California dairy industry will lose an estimated $1.37 billion to $2.32 billion, according to the study.
Crop losses are unknown in many cases because it’s still early in planting season.
“For crops that were in season, including berries and leafy greens, direct losses occurred at the field and various points in the supply chain,” according to the release. “As foodservice demand evaporated, product that could not be diverted to the retail sector spoiled or was destroyed.”
There are many unknowns that will greatly influence future losses, including another wave of COVID-19 returns in the summer and fall, whether an effective vaccine is developed, and how the global economy rebounds, according to the report.
“A prolonged recession would reduce consumer purchases of some California specialty crops,” according to the report. “At this time, it seems likely that additional economic impacts are likely to result from changes in consumer income as the U.S. and other countries enter a recessionary period.
The study, from ERA Economics, Davis, Calif., was also commissioned by:
- California Farm Bureau Federation;
- Ag Association Management Services Inc.;
- California Fresh Fruit Association;
- California Strawberry Commission;
- California Tomato Growers Association; and
- Western Plant Health Association
Note on clarification: The story originally reported total grape losses; the story has been updated to include table grape loss estimates.
For more pandemic coverage, see The Packer's COVID-19 webpage.