This year has witnessed unprecedented changes and unforeseen circumstances. COVID-19 has acted as a catalyst that brought about drastic alterations, leaving us with a new sense of “normal.”
One of the more alarming outcomes of the pandemic is the global increase in food insecurity. In the U.S. alone, the conversation has been geared toward meeting the growing demand for food as people are restricted indoors while businesses and production have slowed down.
Let’s look at the ways the food markets have changed this year:
According to the World Bank, the global supply of staple foods—wheat, rice, and maize—is at an all-time high. This means that commodity markets are currently well-supplied and enjoyed relative price stability at present.
As food prices temporarily increase owing to the surge in demand, producers can take advantage of existing stores of food to meet the growing demand.
However, future food supply can be jeopardized by the current situation. As the crisis unfolds around the world, disruption of export activity, impacted food supply chains, and restricted production activity could spell trouble for agricultural producers.
While many farmers whose work relies on working in close proximity may experience trouble with labor shortages and movement restrictions, there are other logistical complications as well. Sourcing inputs for the next farming cycle can present a challenge in itself.
While food shortages and empty grocery store shelves were a terrifying reality in the early stages of the pandemic, these were minor and short-lived. The existing stores of meat and produce are ready to cater to the growing needs of the country—a necessity at a time when local food markets are becoming increasingly popular.
Local food producers have experienced an exponential increase in demand for their products. Considered low-contact, highly nutritious, and immunity-boosting, fresh produce has become a staple in these trying times.
While the closure of restaurant activity and schools was imposed, there was a drastic drop in demand for food for commercial purposes. However, a lot of people found themselves turning to home-cooking and the demand for local fresh food saw and considerable increase.
Changing consumer habits are difficult to predict and the post-pandemic direction of the local food markets isn’t an easy trend to forecast.
Stay ahead of the curve with risk management and agricultural marketing
For a market that’s no stranger to uncertainty, the COVID-19 pandemic brings even more instability. With Chris Robinson’s expert insight and experienced risk management strategies, you can navigate the agricultural markets during these unprecedented times.
We have 30 years of experience and offer futures trading and agricultural marketing analysis every step of the way. As the top provider of trade marketing, agricultural marketing, and cattle marketing, Chris Robinson’s commentary and advice have helped farmers and ranchers develop long-term plans tailored to their needs.
Sign up for a free 30-day trial of the Robinson Review to get futures prices, exclusive daily comments, live audio services, and weather updates.