The other day, I was working with our veterinarian to breed some heifers and cows utilizing artificial insemination. One Jersey heifer was being less than cooperative, and he made a humorous observation, “Well, you might expect that her number is 2020!” 

This has been quite a year beyond the human health issues. Political and social unrest, fueled by both social and mainstream media, as well as extreme weather and supply and marketing chain disruptions have resulted in an economic and emotional roller coaster.

January and February started off with the U.S. economy setting a record with 128 months of consecutive economic expansion and the lowest unemployment rate since the late 1960s. The Phase 1 trade deal with China was very promising. Low and stable interest rates brought stability to the farm economy that was experiencing a grinder economic cycle with reduced margins since the great commodity super cycle of 2013.

Then, the rumor started about a “bad bug” in China that could possibly spread throughout the globe. In my face-to-face sessions, handshakes were replaced by fist bumps, which upset some of the longtime participants. In late February, I spoke with a high-ranking global official in a Midwest airport, whom I have known for a number of years. He provided a stark outlook of what was to come. In our casual conversation, he predicted that the virus’ effects would intensify in Europe and then hit urban areas in the United States. He indicated I would not be traveling or conducting face-to-face presentations for a long period of time. Two weeks later, his statements came to fruition. With that being said, what are some of the lessons learned from the pandemic and throughout 2020?

Behavioral economics in 2020 has been on steroids. Who could have imagined negative oil futures, a shortage of toilet paper and empty grocery store shelves, similar to scenes from the 1960s television show “The Twilight Zone?”

The importance of working capital and cash for both businesses and households quickly became a high priority. The Achilles' heel of the economy was the concentration of supply and marketing chains, the effects of which were negative for producers and consumers, but positive for processors and the big-box stores. One beneficial result of the pandemic is that businesses and individuals have rediscovered and reassessed their goals and priorities in life. In addition, niche markets for agricultural products have flourished with the limiting constraints being processing or the possible means of distribution.

As schools and many workplaces moved online for remote work and education, the line between workplace, family time and personal life became very blurred. This has caused many individuals to feel exhausted. Social isolation from family, friends and coworkers has taxed the mental health of many Americans.

Government and central banks came to the rescue in the United States and abroad, which provided a temporary economic reprieve. The question becomes how much, how long, and how will business, family and personal lives adjust after these government support payments dwindle?

2020 has been the year of the black swan. This year has shifted the paradigm for this decade and beyond. Changes such as more home improvement projects, an urban exodus and the repopulation of rural areas have brought many unintended consequences.

Attempt to maintain a positive mindset as we close out 2020. Manage the controllable variables and manage around the uncontrollable factors. Your network of people will determine both your financial and mental net worth.

Devote time to hear the silence by disconnecting from technology to enjoy the simple things in life. Reach out to people who have made a difference in your life, particularly the elderly. Loneliness can be a hard habit to break, but a positive gesture can go a long way.

Finally, the U.S. is still a great place to be born and experience life. Agriculture is the foundation of the pyramid of success for any country providing economic, social stability and opportunities for people to accomplish their dreams. Happy holidays and see you in 2021 on the journey of life!

Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8 million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA and regulators, as well as producer and agribusiness groups. He has published four books and over 1,300 articles on financial and business-related topics in journals, extension and other popular publications.

© Northwest Farm Credit Services 2020