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Slowing business at restaurants in Texas have also impacted the trucking and farming industries. | Stock photo

Texas restaurant business collapse seriously affects trucking, farming as well

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The perilous state of restaurants and other hospitality businesses in Texas due to the COVID-19 pandemic is having a tangible effect on many other sectors, including farming and trucking.

Small business revenue and the number of outlets open in the hospitality and leisure industry has collapsed since the advent of COVID-19, according to figures compiled by researchers from Brown University and Harvard University.

The Opportunity Insights Economic Tracker project reports that small business revenue in hospitality and leisure is down a staggering 72.3% since the start of the year.

Compared to January, there are 55.2% fewer small businesses open in the sectors as of Oct. 30, the researchers report.

Farmers, truckers and others revealed to the Texas Tribune the extent of the impact of their businesses due to the drastic downturn in the restaurant trade. Economists predict that up to 30% of all Texas restaurants will close or drastically alter their business models. 

Highly perishable products were not consumed and, over a short period of time then, not being bought, meaning farmers had to quickly pivot and decide how much crop to produce during the season.

Russell Boening, 61, said that prices for meat and beef dropped "dramatically" in the immediate aftermath of the pandemic's start.

“Milk prices have rebounded some, beef prices not so much,” Boening, who operates a 500-acre dairy and beef farm near San Antonio, told the Tribune.

Boening has relied on paycheck protection program (PPP) loans to keep his employees but fears for the future if restaurants do not reopen entirely.

“There's no doubt that if restaurants continue to either stay closed, operate at 50% or, heaven forbid, close permanently, I think that could surely affect us in the long run,” he said.

Processors are also hurting. Greg Hanks, president of Hanks Brokerage Inc., told the Tribune that his revenue is down approximately 20 to 30%.

“The longer this goes on, the more places will close, and more of the business sites will be down, and it will affect the manufacturing bases [that] supply those restaurants as well, so I think long term I would not expect to be back up to the levels we were pre-COVID for two-plus years,” he said. “In all honesty, even to get flat I think will be over two years.”

John Esparza, the president and CEO of the Texas Trucking Association, added: “They’re either going to have to diversify or move away from their existing clients that are specialized in restaurants and find ways to keep their trucks rolling.

“That can come at a cost as well because if you're just suited to handle refrigerated and restaurants specifically, now may not be a good time to purchase the type of equipment that you need to move into a different sector of trucking."

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