TOPSFIELD, MASSACHUSETTS, US — From pork to corn, soybeans and gasoline, the coronavirus (COVID-19) has taken commodities on a wild ride that isn’t over yet.

Experts in various commodity fields laid out the impact of the pandemic and related control measures during a session at the Women in Agribusiness Summit. Initially planned for Nashville, Tennessee, US, the event went virtual because of the virus.

The economy was running smoothly until mid-March when COVID-19 hit the United States.

“Things changed overnight,” said Dhamu Thamodaran, executive vice president of Smithfield Foods. “Every business got affected and the US economy came to a grinding halt.”

Restaurants shut down and demand collapsed. With people panic buying, sales at grocery stores skyrocketed and their product demand increased 40%.

“As a company we are not prepared to supply anybody 40% more,” he said. “Then the trouble started when employees got infected in our plant. It caused quite a problem with the supply chain. And we have seen unprecedented commodity market volatility.”

Several factors are contributing to that and will have an impact going forward, in particular for the corn market. This August, Iowa was hit by derecho, which damaged a significant portion of the crop, said Megan Schmit, director grain origination, CHS. The latest numbers from the National Agricultural Statistics Service show a 550,000-acre reduction in corn production in Iowa. Yield expectations have dropped by 11 bushels per acre for the state.

In many corn and soybean production areas, August was hot and dry. Then remnants of a tropical storm dropped seven inches of rain on parts of Illinois.

“We’re now at a point where harvest will be fairly normal for the rest of the season,” Schmit said. “There is a good crop out there right now. Is it the very best we thought it was going to be? Maybe not, it does feel we’ve taken some of the top off of those yields. It still feels like a very comfortable, good-sized crop for producers.”

Other market factors to keep in mind include the relationship between the United States and China.

“We’ve got some great current corn commitments coming out of China,” she said. “But a commitment does not mean it’s a done deal. There is a lot of question in the industry of whether or not these numbers will materialize.”

Ethanol has been significantly impacted by COVID-19 restrictions and the drop in travel.

“Demand as a result dropped to very low levels, something we’ve never seen before,” Schmit said. “People are more comfortable and we’ve seen travel pick up. But we have not reached pre-COVID levels of any sort of travel and we have not reached pre-COVID levels of ethanol production.”

Feed usage of grains also has been impacted by COVID. All the little things add up — like milk not being distributed at schools because they were closed — and continue to have a ripple effect on the market, she said.

“We’ve seen some very negative impacts, but we’ve also seem some positives for our producers and the grain industry as a whole,” Schmit said. ”The last few years we’ve seen an increase in the digital capabilities for producers. They are embracing the technology. Going forward it’s critical for grain companies to continue to stay on top of that trend.”

The pork industry faces its own challenges, including a 30% decline in foodservice demand and a 40% to 60% drop in casual and sit-down dining demand. Retail demand is still up about 10% to 15%, Thamodaran said. Smithfield plants, which were at one time operating at 70% capacity, are back up to 95% capacity. Employee absenteeism and ongoing outbreaks are still an issue.

“Operating costs are running 50% above normal,” Thamodaran said. “Our company is not focused on profits. Our company is focused on employee safety, supplying the food and keeping everybody healthy. That’s our goal.”

Looking ahead, the road to US economic recovery is long. The economy is expected to retract 4% to 6% in 2020 and unemployment is around 8.5%.

“Until we have an effective vaccine, I believe the economy is going to be in a little bit of trouble,” Thamodaran said.

Right now it’s a K-Shape recovery where some sectors such as technology, grocery and housing are doing well while financial, retail, restaurant and energy are not. Long term, he expects an elongated U-shape recovery, with bottoming out happening now and growth starting in April.

“We’re looking at bullish commodities some time in April based on the economy,” Thamodaran said. “Then you have to pay attention to the US dollar. The dollar is going to be weaker in the long term, and any time the dollar is weaker, it is bullish commodities.”