Study Shows It Will Take Time For Ag Companies To Rebound From COVID-19

45

There isn’t an aspect of American business that hasn’t been impacted by the COVID-19 pandemic, and the impact on the food system is well known. Food supply chains have been altered either through disrupted delivery mechanisms, significantly reduced demand platforms, manufacturing plant shut-downs due to COVID illnesses among production workers, and other impacts

All of these disruptive forces in the food chain have had a significant impact on farmers. When a significant portion of the supply chain is altered or completely stops, that creates a back-up on the dairy, beef, pork and poultry operations that rely on those chains to remain open to maintain market access. And when farmers are impacted, the companies that serve them are altered as well.

Not only has the changing economics on the farm impacted agriculture businesses, but the physical ability of getting on the road to visit face-to-face with farmers and other customers has changed as well. Sales people have been forced to stay home, and that has significantly changed how companies reach customers and clients.

To see how much COVID-19 is impacting agriculture companies, I surveyed people at more than 50 agriculture companies. Of the 58 individual responses, more than three-fourths of the companies serve dairy and livestock producers, with the balance servicing row crop and specialty farming operations. There were a few companies that served other agricultural businesses.

As expected, nearly 40 percent of companies say they are down a bit since the COVID-19 pandemic started. Just over a quarter of companies are about the same, with 12.1 percent actually doing better than before. Nearly one out of five companies say it’s too early to tell.

It will take some time for those companies to recover as well, according to the survey. Only 18.2 percent say they will hit the ground running and be ready to go when things return to normal. About 38 percent say it will take a few weeks, 32.7 percent say it will be at least six months and just over 10 percent say it will be a year or more before they recover.

When asked the biggest issues companies are facing with connecting with customers, over half of respondents say getting sales people into the field to call on customers face to face is the biggest issue. The fact that many customers have stopped buying is also a significant issue.

All of the changes that have gone on both on the farm and within ag companies could have an impact on corporate culture. Certainly with more people working from home, the office environment is non-existent, or definitely not the same as before the crisis.

Right at half the responding companies say their culture hasn’t changed much, while 34.5 percent say their culture has actually gotten better. This is likely reflective of the compassion people have for their coworkers and willingness to support one another through this crisis. About 15 percent say their culture has suffered as a result of the COVID pandemic.

In summary, the COVID-19 pandemic has had an impact on everyone, and that includes agriculture companies. It will take a significant amount of time for those companies to recover, probably more dependent on how quickly and efficiently sales teams can be deployed to once again call on customers. Nevertheless, corporate culture has persevered through the crisis.

For a pdf of the full survey report, drop me at note at mike@blackdirtcommunications.com.

LEAVE A REPLY

Please enter your comment!
Please enter your name here