Pandemic challenges food system to have emergency plans
There have been a lot of political discussions going on for months, and when you write about agricultural policies and procedures, you are typically going to offend the someone’s sensibilities.
Some folks are looking for total freedom from government intervention and others are looking for rules and regulations to cover all aspects of food production. Of course, there is everything in between.
The desire for durability and resilience in our food production and distribution system is shared by many. We all like to eat, pretty much every day.
Think back several months to the late spring of 2020. There were warnings of all kinds of food shortages. Some of them materialized and others did not. One day at my local Aldi, there was no rice, beans, pasta, or pasta sauce on the shelves. Literally, none. My wife found our local Costco out of beef and chicken – twice. Were these shortages the result of hoarding? Probably. Still, seeing empty shelves is something that just doesn’t happen in America.
All of this got me thinking: Is our food processing and distribution system durable against whatever shocks may come? Until 2020, we hadn’t seen a pandemic disrupt the lives of large numbers of Americans in over 60 years. I know these are hard to envision, but here are some other disruptive events that are possible: fuel shortages, bio-terrorism, a meteorite, a terrorist bomb, a major earthquake, a war, a major flood, or significant volcanic ash in the atmosphere.
Thankfully, the coronavirus has not destroyed rail lines or blotted out the sun, but it has impacted farmers to some degree. I asked a few farmers what effects the new coronavirus have had on them. One horseradish grower told me that he is providing masks to employees and has put up clear dividers in his processing area. He has also had to transport farmhands to and from the fields in small vans, rather than 15-passenger vans, due to CDC guidance.
A grain farmer told me that he currently has COVID-19 and is reluctant to drive the $250,000 combine until he’s sure he has recovered. He also said that farmers in his county have to make appointments to see the FSA office, which is limiting office visits to one at a time. Another farmer told me that he has had trouble getting truck and tractor parts this year. I’ve also heard about some dairy producers having to dump milk back in April because of school cafeteria closings. The list could go on and on, but the point is that virtually every farmer (and every other business) has had some kind of coronavirus problem that he or she had to overcome.
This morning, I was eating blueberries from Lima, Peru. Somehow, these blueberries made their way 3,600 miles to me for $2.69 per pint (and turned a profit). Amazing accomplishment, but is it best? Imagine the number of problems that could have stopped the berries from getting here. It seems to me that the shorter the food distribution channel, the less likely it is to be disrupted. Hopefully, those blueberry growers in Peru have thought about another distribution channel to sell into, in case the one that ends in St. Louis is not available. And, hopefully, Aldi has another supply chain to get me blueberries.
So, what can we do to make the American food processing and distribution system more robust? That is a big and difficult question, and to find answers, I asked Chip Lerwick for help. Lerwick is the chair of the Danforth Plant Science Center Leadership Council. He’s also the managing director at Aon (Insurance) in St. Louis, supporting the Food and Agribusiness Practice.
The first thing we agreed on was that food producers, processors, and distributors need to have a Plan B, or perhaps even Plan C, for how they will market, process, and distribute products. For example, if we can’t ship cattle between Denver and Kansas City on I-70, we’ll ship them on I-80. If we can’t move on either interstate, the local meat processor will have to do it. Like a bank or a commodities trading market, we need to have a backup plan for emergency situations.
Farmers need to have two or more ways to get seed, fertilizer, herbicide, and pesticide. They need multiple sources for parts and other supplies. Farmers should think about alternate commodity markets, plan alternative transportation, and probably have alternate commodity storage plans. What if all of the local grain elevators are full of corn when you’re ready to store it?
Another way for individual farmers to build resilience is crop diversification. The other day I watched a documentary on Netflix called Kiss the Ground. It was an interesting discussion about soil health, but my big takeaway from it was one of the farm operators. Gabe Brown is growing corn, peas, wheat, barley, rye, oats, alfalfa, veatch, honey, sheep, hogs, and cattle in North Dakota. And, he claims to be doing it profitably without government payments.
With all of the political strife, can we count on a particular level of government payments? And, how many American farmers would be unprofitable without those payments? However, my point is that Mr. Brown’s diversification is a great thing for resiliency in the food production system. If you are growing a dozen products and you can’t get one of them to market, it’s OK. There are 11 other products still going. If the entire market for two of your products temporarily shuts down, it’s OK; 10 of them are still selling. On the other hand, if your only crop is 5,000 acres of wheat, what are you going to do when the Ukraine and Russia are selling wheat at $3.75 a bushel? You’re probably going to lose money.
We need to create diversification as individual food producers, but we also need to work on crop diversification, geographically, within the U.S. Apparently, California is producing over 90% of American broccoli, walnuts, kiwis, celery, plums, peaches, olives, raisins, and garlic. It accounts for a high percentage of various other fruits, nuts, and vegetables, as well. From a system durability standpoint, should it be like that? I don’t know. We have occasionally been bitten within our firm by this line of thinking: "It hasn’t been a problem yet, so why worry about it?”
Beyond internal U.S. food supply lines, maybe we should think about international supply lines. Mr. Lerwick told me a couple of things that I did not know. For instance, he said, “Almost all spices are coming from outside the U.S.” He also said that in 2017 China produced 95% of the world supply of ascorbic acid (vitamin C). That’s a bit scary to me. I hope someone powerful and important has thought about where we would get vitamin C if, suddenly, we couldn’t get it from China. Maybe some of the government payments should support food supply line diversification.
Bottom line, during this pandemic, Americans in all lines of work have had to change what they are doing in order to continue to do business. That’s what we do. We innovate and find ways to carry on and even grow. We don’t throw in the towel. We get off the mat and keep fighting.