The coronavirus pandemic and the resulting shutdowns have turned much of agriculture upside down. While some disruptions will eventually settle out, others will have a lasting effect, an economist says.

“This black swan is a dirty bird, no doubt about it,” David Kohl, professor emeritus of agricultural and applied economics at Virginia Polytechnic Institute and State University, said in a webinar hosted by Northwest Farm Credit Services.

“Black swan” is a metaphor used to describe the disproportionate role unusual events play in the economy.

“We’re going to lose some businesses. This one’s going to be tough, there’s going to be some casualties,” he said.

But there are also broader implications for trade and political and economic agendas in the U.S. and abroad.

For four of five decades, the U.S. has been moving toward globalization. Now it’s going to be moving toward decoupling or selective globalization. It already had a dry run in that direction with tariffs and sanctions. But now it’s going to start evaluating the supply chain and moving toward a national, regional or North American focus, he said.

There will also be a lot of discussion on optimization and efficiency versus diversification and resiliency, he said.

“I think this event is really going to be a paradigm shifter,” he said.

That’s also going to play out in political and economic agendas, whether it’s in the U.S., Europe, Germany or China, he said.

Unlike the temporary shock of the 2008-2009 recession, he’s expecting an elongated recession. The previous recession was caused by flaws in the banking and shadow banking systems and affected residential and commercial real estate centered in the coastal and “sand states” such as California, Florida, Arizona and Nevada. This recession is hitting everyone and has changed behavioral economics, he said.

“Central banks in the U.S. and abroad cannot solve this alone. It’s taking monetary and fiscal policy combining to be able to do it,” he said.

While shocks to the economy happen about every 10 years, this one is a super shock, he said. Unemployment claims in the U.S. will probably reach 30 million to 35 million, he said.

One economic indicator to watch is the University of Michigan’s consumer sentiment index. Some 70% of the economy is driven by the consumer, and 40% of that is related to the service-based industries such as restaurants, airlines and sporting events, he said.

Another thing to keep an eye on is what’s happening in critical industries — agriculture, manufacturing, technology and energy, he said.

“One of the things we’ve really, really found is that consolidation and bigness is one of our flaws,” he said.

One example is COVID-19 causing big processing plants to close, clogging up the system for processing milk and meat, and it could create periodic shortages, he said.

Other disruptions are coming from trucking and shipping. Consolidation in production, processing and logistics is going to be challenged, he said.

Another thing to watch is the economic health of Canada and Mexico — the No. 1 and No. 3 U.S. trading partners — as well as the economic health of Japan.

The value of land is another thing to watch. Any drastic shifts in financial policy could throw too much land on the market without demand and collapse the balance sheet for farmers and ranchers, he said.

Despite the disruptions and uncertainties, there are still positives for agriculture in the coronavirus situation.

“This is a golden moment to really bring the importance of agriculture to the rest of society,” he said.