AUGUST 2020
Message from the President All of us at AgCredit hope everyone is staying safe during these unusual times. The events of the past few months have been extremely disruptive and have caused an array of challenges for many farms and businesses. The stay-at-home order from the state of Ohio was the first jolt on the rollercoaster experience we shared. The initial uncertainty brought about by the quarantine and the disruption within our communities, schools, places BRIAN RICKER of worship, families and businesses was extraordinary. Soon after the quarantine was in place, we began to experience other disruptions related to worker layoffs and with various supply chains, including the critical food supply chain. Some dairy farms were forced to make the gut-wrenching decision to dump milk as the demand for food service products declined when activity at hospitals and hotels slowed and schools and restaurants closed. Meat processing plants were either temporarily shut down or production was reduced when COVID-19 cases began to spread in the processing plants. This caused significant concern to many livestock producers when they were unable to market their livestock in a timely manner. Across the country, some producers were faced with a huge backlog of livestock and were forced to make the difficult decision to euthanize their livestock and take a significant loss. Ethanol plants were shuttered as a result of the sudden lower demand for gasoline. The price for corn declined quickly, and a strong local corn basis evaporated as well. All of these disruptions continue to have a significant impact to all of us. In response to the challenges brought on by the coronavirus, the CARES Act was passed in late March and, thankfully, it has provided some needed short-term relief. Unfortunately, some segments of agriculture were not covered by the legislation, but we are hopeful they will be in future legislation. Shortages of some food products at grocery stores gave many people a new understanding of the crucial role of farmers. In a recent poll conducted in early
June, 85% of respondents said they believe the pandemic has affected the food supply chain, and 59% said they think agriculture should be classified by the government as a matter of national security.  I do wonder about the changes we will see going forward. What future changes will the pandemic cause to our food and other supply chains? What trends believed to be slowly emerging before the pandemic will now accelerate and be accepted at a more rapid pace? Telehealth is one trend that will likely become far more accepted. The headline “Telehealth set for tsunami of growth� recently caught my attention. The thought of talking to a medical professional virtually through video does not seem so strange or futuristic anymore. Another similar trend is the increased use of virtual meetings. I heard recently that one in five meetings we attended in person will now be held virtually. For AgCredit, the need for greater digital capabilities for our loan process is something we are accelerating this year. During our annual strategic board planning meeting in late July, we focused on the long-term impact of COVID-19 related to the agriculture industry and agricultural lending. As we strategize for the future, understanding the impact of this virus on our businesses and the acceleration of these trends will be critical to our success. I will close by tipping my hat to our farmers, who continue to persevere through some uncertain and volatile times. Thank you for helping to feed our world! I am also very grateful for our AgCredit team and their hard work in accomplishing so much during an extremely busy and challenging period. Tremendous effort was made by our team to re-price notes when interest rates declined and assisting customers with payment deferrals and SBA PPP loans. As we go through a scaled-back and slower summer of activities, we are looking forward to some green shoots of hope and optimism rising from our fields.
