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Farmers and food companies across the country are throttling back production as the virus creates chaos in the agricultural supply chain, erasing sales to restaurants, hotels and cafeterias despite grocery stores rushing to restock shelves, the Wall Street Journal reported. American producers stuck with vast quantities of food they cannot sell are dumping milk, throwing out chicken-hatching eggs and rendering pork bellies into lard instead of bacon. In part, that is because they can’t easily shift products bound for restaurants into the appropriate sizes, packages and labels necessary for sale at supermarkets. Few in the agricultural industry expect grocery store demand to offset the restaurant market’s steep decline. Farms are plowing under hundreds of acres of vegetables in prime U.S. growing regions like Arizona and Florida. Chicken companies are shrinking their flocks to curb supplies that could weigh on prices for months to come. In the dairy industry, restaurant closures and other disruptions have left producers with at least 10 percent more milk than can be used, according to industry estimates. Dairy groups say that the milk glut could grow as supplies increase to a seasonal peak in the spring, and as shelter-in-place orders stretch on across the country. In response, cooperatives that sell milk from farmers to processors are asking their members to dump milk, cull their herds or stop milking cows early in an effort to curb production.

A post-auction battle has broken out over the purchase of Dean Foods Co. ’s assets, with a group of bondholders saying it might put forward an alternative deal in the bankruptcy and with others saying the sale process was unfair, WSJ Pro Bankruptcy reported. A group of Dean bondholders said in a court filing it has been exploring all options — including seeking help from the federal government — to obtain funding for its own reorganization of the milk processor. A hearing into whether the $433 million sale of most of the assets of Dean Foods to winning bidder Dairy Farmers of America Inc. should be approved is scheduled for Friday in U.S. Bankruptcy Court in Houston. The deal, if completed, would unite two dairy giants. Dean, the top U.S. milk processor by sales, filed for bankruptcy in November after struggling with slumping consumer demand for traditional cow’s milk. Dairy Farmers is the largest U.S. dairy cooperative by membership.

With milk prices plunging to lows that haven’t been seen in nearly four years, dairy cooperatives are dumping the product to reduce oversupply, Bloomberg News reported. While shoppers are clearing out milk cases at grocery stores, that’s not making up for the closings of restaurants and schools. U.S. cows are entering their most productive time of the year right now as coronavirus is killing off a significant tap for demand. While some dumping usually occurs during the U.S. spring, this year it will be “even more aggressive,” said Alyssa Badger, director of operations at HighGround Dairy in Chicago. “There’s no way to offset how much loss we’re seeing with school closings and food service demand in the form of cheese and butter, just because someone’s buying an extra gallon of milk,” Badger said.” American dairy farmers have been suffering a wave of bankruptcies amid years of low milk prices, and with so many exiting — Wisconsin alone was losing two to three dairy farms a day for the past three years — the industry was just starting a recovery. The onset of the virus has put any such turnaround on hold. Wisconsin dairy farmer Wayne Gajewski hasn’t yet resorted to dumping milk, but supplies are backing up in local markets and prices have fallen below his cost of production. He’s hoping the federal government can buy some dairy products to distribute to those in need, and that the virus clears up soon. “We’re not used to the supply chain breaking down,” said Gajewski. While demand for dairy products initially surged due to consumers stocking up on staples, that has now dropped, said Kristen Coady, a spokeswoman for Dairy Farmers of America. The cooperative is trying “all possible avenues to find a home” for their members’ milk, including donation opportunities at food banks.

While record rainfall made it difficult to plant corn and soybeans until long after the typical growing window had passed, President Trump’s long-running trade war cut off farmers’ access to China’s enormous market and commodity prices remained in the doldrums, the Agriculture Department estimates that 2019 was farmers’ most profitable in five years. The estimate is a result of the Market Facilitation Program, or the government's farm bailout, the Washington Post reported. Without government assistance, U.S. farm income would have fallen about $5 billion from its already-low 2018 level. So the $14.5 billion in bailout funding announced so far represents a substantial reversal of fortune. About three-quarters of the funding already has been distributed. “If you look at the prices, the weather and the trade imbalances, you’d expect the farm sector to be in a terrible spot,” Montana State University economist Eric Belasco said. "It’s not.” Most farmers benefited from the bailout, Belasco said, but because bailout money is distributed based on acreage and not farmer’s need, about half of the money (47 percent) went to the largest 10 percent of operations. According to 2018 data, more than 70 percent of farm households had a high level of financial risk in 2018. But of those that qualify as very large (median income $756,000), only 25 percent fit into that same category.

The closing days of 2019 find small farms pummeled from every side: a trade war, severe weather associated with climate change, tanking commodity prices related to globalization, political polarization, and corporate farming defined not by a silo and a red barn but technology and the efficiencies of scale, according to an analysis in Time. It is the worst crisis in decades. Chapter 12 farm bankruptcies were up 12 percent in the Midwest from July of 2018 to June of 2019; they’re up 50 percent in the Northwest. Tens of thousands have simply stopped farming, knowing that reorganization through bankruptcy won’t save them. The nation lost more than 100,000 farms between 2011 and 2018; 12,000 of those between 2017 and 2018 alone. Farm debt, at $416 billion, is at an all-time high. More than half of all farmers have lost money every year since since 2013, and lost more than $1,644 this year. Farm loan delinquencies are rising. Suicides in farm communities are happening with alarming frequency. Farmers aren’t the only workers in the American economy being displaced by technology, but when they lose their jobs, they are also ejected from their homes and the land that’s been in their family for generations. Even large companies are facing unprecedented challenges; Dean Foods, a global dairy producer that buys milk from thousands of small farmers, filed for bankruptcy on Nov. 12, and is seeking a sale, a move that could further hamper farmers looking for places to sell their milk.

The Federal Reserve Bank of Kansas City reported that farm finances deteriorated across a swath of agricultural states during the summer and early fall, despite the Trump administration’s second round of trade aid payments and slightly higher prices, Bloomberg News reported. Farm income fell in the third quarter from a year ago in each of the seven rural states covered by the Kansas City Fed, according to its survey of agricultural credit conditions. The report cited the trade war, volatile crop prices and disruptions at a major beef processing facility. Bankers contacted by the Fed said the drop in farm income was sharper than they expected going into the summer. Respondents expect income to decline further and credit conditions to worsen in the coming months despite trade aid payments. The USDA started issuing payments from its 2019 trade aid program in August.

The number of Georgia farm bankruptcies has surged in recent months to among the highest in the nation, as growers grappled with poor prices, burdensome tariffs and lingering effects from brutal weather, the Atlanta Journal-Constitution. Though millions of dollars in assistance have begun to roll out, many farmers are still waiting for promised federal aid for natural disasters such as Hurricane Michael. It’s unlikely that the payouts will make up for all the losses that have grown over the years, bankruptcy attorneys said. And several expect more local farmers to seek bankruptcy court protection in the next few months.“Farmers have not had a real good year in a long time,” said Wes Boyer, a Macon bankruptcy attorney who often works with farmers.He predicted more troubles as they continue to wrestle with low prices for what they grow and raise. Meanwhile, their ownership interests continue to erode as they borrow — if they can find a willing lender — to make up for the losses. Georgia logged 37 new chapter 12 filings in the latest 12-month period ending Sept. 30, according to a report last week from the U.S. Courts. That’s up from 25 for the same period a year earlier. But it’s down from 43 and 41 in the periods for 2017 and 2016, respectively. Chapter 12 is set aside largely for family farmers. Both Georgia’s latest 12-month total number of cases and its growth compared to the same period a year ago are among the highest in the nation, according to the American Farm Bureau Federation.