Volume 21, Issue 1 - Special Issue: COVID-19 Impacts on Selected Commodities; Guest Editor: Andrew Schmitz

Seafood is the food group with the highest share traded, and the U.S. is the world’s largest seafood importer, importing 79% of the seafood consumed. Hence, a study examining the impacts of the measures to contain COVID-19 on U.S. seafood imports will not only show how U.S. seafood availability has been affected, but will also give strong indications of how resiliently the global seafood markets have worked through the pandemic. We find that U.S. imports of seafood actually increased in 2020 and 2021, suggesting supply chains were able to adapt to potential disruptions. Moreover, for the 14 largest product forms imported to the U.S., there are no strong price movements. Given that there is a global market for most species groups, this adaption also suggests that the markets have worked quite well beyond the U.S. Hence, while there have undoubtedly been market shocks associated with the COVID-19 measures such as the reduction in demand from the restaurant sector and the increased sales in the retail sector, opportunities seem to balance out challenges, and the supply chains for seafood to the U.S. have been highly resilient.

The COVID-19 pandemic led to an unprecedented increase in the U.S. price of softwood lumber by more than 300%. The price increase has been attributed to constraints on supply and increased demand for lumber caused by a pandemic-induced boom in domestic housing construction and, more so, home improvements. However, the volatility in lumber prices after the COVID-19 outbreak remains unexplained. In this paper, we employ a theoretical model to explain the cause of price volatility. We examine why demand and supply functions for lumber might be quite inelastic over the period from March 2020 to April 2022, despite very small shifts in demand. This implies that slight movements in interest rates or changes in the prices of substitutes, for example, can lead to large jumps in prices. Price volatility harms consumers while greatly benefitting lumber producers. Overall, as a result of the pandemic, U.S. producers gained some $5.3 billion, while U.S. consumers lost $7.3 billion per quarter.

This research determines the impacts of COVID-19 US on crawfish production and consumption for 2020 and 2021 using an Equilibrium Displacement Model. In the US, crawfish is one of the seafood commodities where most production is consumed by domestic consumers (7% of domestic consumption is from imports). Crawfish and rice are complementary. Therefore, the impacts of COVID-19 on crawfish consumption simultaneously influence rice production and crawfish producers and consumers. In the first year of COVID-19 (2020), the reduction in crawfish retail demand caused negative effects on final consumers and producers. However, crawfish consumption recovered significantly in the second year (2021), which could compensate for the loss in 2020. Overall, consumer and producer gains ranged from $549 to $626 million if the COVID-19 pandemic only impacted retail consumption. However, in 2021, the increase in production costs due to higher oil/diesel prices and other input prices caused the farm supply to decrease. As a result, total welfare gains ranged from $200 to $228 million. If the demand in 2021 did not increase, but the crawfish farm supply decreased, consumer and producer losses ranged from $929 to $1045 million. Overall, the total effects of COVID-19 on consumers and producers for 2020 and 2021 depend on its effects in 2021. If the demand in 2021 increased following the decrease in farm supply, consumers and producers would benefit from the shocks of COVID-19 due to higher post-COVID-19 demand.

The COVID-19 crisis had a significant impact on world oil producers. Within a welfare economic framework, Schmitz, A., C. B. Moss, and T. G. Schmitz. 2020. “The Economic Effects of COVID-19 on the Producers of Ethanol, Corn, Gasoline, and Oil.” Journal of Agricultural & Food Industrial Organization 18 (2): 1–18, estimated that the minimum cost of COVID-19 in 2020 to world oil producers was roughly US$ 1 trillion. They used actual oil production data for January 1st, 2020, through June 30th, 2020, and forecast world oil production and prices from July 1st to December 31st, 2020. This paper extends the 2020 analysis using actual production and price data for 2020 and 2021 to calculate the change in producer economic rents during the COVID-19 pandemic for global oil producers (U.S., Russia, Saudi Arabia, and the Rest of the World). Despite losses in 2020 to world oil producers due to the COVID-19 pandemic, world oil producers saw significant gains in 2021, which more than offset losses in 2020. At a minimum, world oil producers realized a net gain of $US 829 billion over the two periods.

The upheaval wrought on the U.S. beef industry by the global COVID-19 pandemic carried with it several lessons that might help improve resiliency should there be a reoccurrence. First, the futures market for fed cattle fell well before cash prices, which sent a signal to market cattle early, and those who did so benefited. Second, the decline in futures anticipated the closure of slaughter plants and provided an opportunity to purchase and store beef primals in anticipation of future scarcity. Third, the beef industry has ways of slowing or stopping the pipeline of animals destined for feed yards and can “store” these animals in background feeding facilities or on pasture or rangeland. Producers who waited to sell feeder cattle benefited from higher feeder cattle prices once the processing facilities reopened. Fourth, cow slaughter plants responded to the pandemic and subsequent scarcity of labor much better than large fed-cattle plants. Cow plants are not as sophisticated and complex as fed-cattle plants. This relative simplicity may help explain the superior performance of these plants during the crisis. Sixth, the academic work on the value of building smaller plants as a response against concentration provides mixed results—these plants require more labor per animal and can be even more susceptible to labor scarcity. Seventh, the observed increase in boxed beef prices, even as fed cattle prices fell, demonstrates the risk-mitigating impact of producer ownership of downstream activities in the value chain.

Florida has one of the most diverse agricultural economies in the United States, producing several dozen types of fruits and vegetables that are consumed within the state, across the country, and around the world. The COVID-19 pandemic and resulting policy responses occurred during the peak of spring harvest season for many crops in Florida, abruptly removing market demand from the food service industry and shifting consumer purchasing habits, which enabled insights into several aspects of the fruit and vegetable supply chain. This article examines how the COVID-19 pandemic impacted fruit and vegetable industries in Florida, how these industries responded to COVID-19 impacts, and how Florida’s experience compared to that of other states. Data are derived from several sources including a statewide survey that measured agricultural production losses in Florida resulting from COVID-19 in early 2020, interviews with Florida operations that provided insights into how the pandemic induced change across the food supply chain, and a survey of food supply chain operations in three regions of the United States conducted in 2021.

Bangladesh imports roughly 98% of cotton from abroad to produce fabric or yarn (USDA 2020. Cotton and Products Update. Bangladesh. Also available at https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Cotton%20and%20Products%20Update_Dhaka_Bangladesh_11-30-2020). The production of textiles in Bangladesh depends on the price of raw material, the demand for garment products in the importing countries, smooth supply chain management, and the domestic supply of cheap garment laborers. The global pandemic of COVID-19 disrupted the supply chain of almost all physical goods and services, including textiles. It caused the price of textiles to fall due to a drop in worldwide demand, and increased the marginal cost of textile production due to supply chain interruptions. This paper shows how the decline in the demand for garments, coupled with an increase in cost, shrinks the producer welfare of textile manufacturing and garment exports of the small producing country, Bangladesh.