Keep calm & carry on: The essential business of agriculture
by Katie Navarra
With grocery store shelves empty, farmers plowing under crops, packing plants closing and dairies dumping milk, the question on everybody’s mind is “Will there be enough food – not just tomorrow, but six months or a year from now?”
“There has been some disruption in the food supply chain but nothing that won’t be overcome,” said Mike Osborne, former president and CEO of Nutra Blend. “Workers in the plants are most critical. In the last few days several plants have closed down and those are all situations caused because of COVID.”
At one plant, 60% of workers called in, but they weren’t all sick – they were anxious about the risk, according to Osborne. Disruption at the processing plants, either because they’re closed or because they’re unable to package for consumer rather than institutional use, is a challenge.
“That could be the disruption going forward,” he said. “Now nutritionists are trying to figure out how to slow animal growth down, which is the opposite of what we usually try to do.”
Osborne was one of four panelists to participate in the virtual presentation “Keep Calm & Carry On: The Essential Business of Agriculture.” Kayla Price, an Alltech poultry specialist, has observed similar situations in Canada. The larger implications for supply are not necessarily availability, but functionality.
“There’s a lot of planning that goes into agriculture throughout the entire supply chain,” she said. “Usually, everything works in a very efficient manner so when one piece of the chain slows or shuts down it impacts many other pieces of the chain, from trucking to how do we slow these pigs or maintain them at this weight as well as what can we do on the young animal side.”
Building a national reserve
When there is a distribution interruption like a natural disaster, there is a policy to use federal funds to buy food on the international market, explained Ryan Quarles, Kentucky Commissioner of Agriculture.
“The benefit is that can stabilize price if we make a commitment to buy, but there is talk of a strategic reverse instead of buying on a national market, but it will be more expensive,” he said. “Who is going to pay for it? Should the consumer pay for something that could have been bought cheaper in another country or should the federal government subsidize it?”
Quarles added that discussions of building a strategic national reserve of the food supply have taken place. Those conversations concerned treating agriculture similarly to personal protective equipment, medical devices, medicines and vitamins. This will be an easier task for non-perishable and frozen foods than perishable products.
The current pandemic is changing the way retailers and customers look at the supply chain. They want to know they can get a supply when they need it. Sellers are also going to be looking for greater transparency in the supply chain for safety and efficiency.
“If you ate anything today that has enriched flour, it’s coming from China. If you ate a vitamin today, it came from China,” Quarles said. “As a national approach, is that what we want? I do think we’ll look at potential vitamin and pharmaceutical production in the U.S.”
Changing customer habits
With the pandemic shuttering restaurants, consumers are shifting away from eating out to shopping for groceries that last two or three weeks or more. They’re buying items that are frozen or items like eggs, which last longer in the refrigerator, according to Price. The shift in packaging isn’t an easy one for processors.
“Processors who developed lines for the restaurant market are now looking to change that line to fit more for grocery shelves,” she said. “That takes time, not just changing the actual mechanics, but the people and training them how to move between the different lines means its slower and creates a bottleneck.”
Changes in packaging demands impacts producers too. In poultry, that means shortening the number of days to market to reducing bird size for cooking at home versus restaurant or institutional preparation. Similarly, eggs are produced for specific buyers.
“Farmers or producers are making changes like shortening days to market, not taking certain eggs or are reducing butterfat or dumping milk, but they are not necessarily being told of some of these changes on processing side and how it fits on other side on restaurant side the business,” she said.
The internet: The electrification of America
Whether businesses are located on Wall Street or Main Street, they all need access to the internet, Quarles noted. One bright spot that has emerged is that the internet has the bandwidth to sustain the surge in daily use with people working from home and/or watching more TV. In rural areas, residents don’t have access to high speed internet and it’s one of the things businesses consider essential. Quarles compares bringing better internet to rural areas to the electrifying of America in the 1930s and 1940s – a necessity.
Farmers with good access are pivoting in their business models by embracing online orders and curbside pick-ups, responding to a resurgence in supporting local agriculture. They are also embracing technology in new ways. Producers are using video technology to talk with veterinarians and nutritionists. Virtual conversations about on-farm data are happening more frequently.
“Some groups are looking at making a virtual advisor group,” Price said. “It’s something that was quite difficult to get off the ground prior to this, but now the idea of getting access to an advisor from one’s phone is growing.” Conversations with advisors, who have access to pictures via a phone or tablet, can troubleshoot what is happening at the farm without face-to-face contact.
The pandemic is exposing some bright spots in agriculture and some weak spots that need to be addressed. While there might be a temporary lag between distribution and what is available, the panelists agreed that the American food supply is strong, one of the safest and most abundant in the world.
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