Monday, April 13, 2020

COVID-19 and Its Accompanying Restrictions Continue to Harm World Food Supply

By Brian Doherty - April 13, 2020 at 03:30PM

As the nation shifts into an economy based largely on the production, distribution, and sale of food, more cracks in our supply lines are showing—some caused by the illness and some by the interventions intended to delay the spread of the illness.

Meat packaging and processing plants in South Dakota, Colorado, and Pennsylvania have seen outbreaks of dozens to nearly 200 confirmed cases among plant workers (including a few deaths), shutting down plants in those first two states. A Smithfield facility in South Dakota was initially going to be shut down just for this week, for deep cleaning and installation of new physical barriers, but that shutdown is now indefinite. In Greely, Colorado, a JBS USA beef plant is not currently planning to shut down entirely, but around 50 workers there have been infected and the United Food & Commercial Workers Union is calling for the place to close its doors.

Most meat processing plants' policies encourage workers not to self-quarantine if ill for fear of discipline or lost pay. But the production processes often demand closeness, and ProPublica reports that "only two meatpacking companies—Tyson Foods and Cargill—have announced companywide temperature checks to screen employees for signs of the virus."

In another part of the food economy, the National Restaurant Association says its industry is facing monetary losses of more than $225 billion and job losses of more than 5 million. In 2018, Americans spent slightly more at restaurants than at grocery stores. Not anymore.

As food purchasing and consumption shifts away from restaurants, hotels, colleges, and other big institutional buyers, lots of product is going to waste. Lack of institutional demand for certain produce has already caused their prices to fall below picking and transportation costs—leading, for example, Florida farmers to just leave squash rotting in the field. For produce that still has markets waiting, closed borders and slowdowns in visa processing are keeping the workforce that harvests them away, unnerving farmers. And workers who are in the fields generally need to work in close proximity to others without proper PPE, which is unnerving the workers.

Businesses are reacting to the new environment by shifting how food is transported and packaged, but that isn't a simple or instant process. Reuters details some of the logistical problems in the dairy industry, which is seeing a grim, for consumers, combination of rising prices and dumping of product:

It would take millions of dollars…to install new equipment to switch a plant from making one type of cheese—such as barrel cheese used to make processed slices for fast-food restaurants—to producing cheddar wedges for grocers, said dairy analysts. Even switching from bagging 10 lb bulk bags of shredded cheddar for food service to 8 oz bags for retail stores would require costly new packaging robots and labeling machinery.

Milk dumping—as much as 7 percent of national output—is already causing water quality worries, even as rationing and price-gauging laws at the retail level prevent the milk market from reaching a workable equilibrium. The nature of getting milk from cows—and of milk itself—means you can't just shut production down for later. The cows keep making milk, and you can't store the product palatably for later consumption.

All sorts of systems are facing new strains in the COVID-19 economy. In America, around 70 percent of seafood is consumed outside the home. So seafood producers and processors are reporting near-instant 75–85 percent drops in income. If you run a plant buying potatoes to make French fries for restaurants, you don't want potatoes anymore, because you aren't equipped to package or sell them directly to consumers. Some products, such as eggs, are seeing price rises—even higher than after the 2015 Avian flu scare, which caused 10 percent of America's egg-layers to be culled.

And in the new and hard-to-navigate gaps between products and their final consumers, storage costs are zooming. America's food bank system is strained on one side by increased demand, thanks to the sharp increase in unemployment, and on the other side by volunteer and donation shortages, as people isolate and store for their own families' needs.

The food industry is also begging the government to relax its trucking regulations, such as weight limits and restrictions on drivers' time on the road, so more people can drive more to get products where they are needed. Drivers themselves are finding it harder to keep themselves provisioned and fed as sit-down restaurants across the nation are shut down.

When workers and consumers cannot move freely, the problems caused  are international; so are the problems caused by reduced air and sea shipping capacity. To the extent that we import food, those issues will ripple to effect U.S. consumers soon. As Bloomberg reported last week, "port backups that have paralyzed food shipments around the world for weeks aren't getting much better. In fact, in some places, they're getting worse."

The Food and Land Use Coalition, a group of food-related businesses and NGOs, have called on the world's governments to not add to the dilemmas of the disease itself by restricting the movement of goods and people that, near miraculously, has long kept much of the world fed:

Some food surplus nations have already imposed export restrictions. New restrictive rules at ports of entry and borders impede the free flow of food products and compromise the timely supply of essential agricultural inputs

Restrictions on the movement of people—while needed for public health purposes—risk shortages of farm labour at key moments in the farming cycle. The risk of major interruptions to food supplies over the coming months is growing, especially for low-income, net food-importing countries, many of which are in Sub-Saharan Africa. Governments, international institutions and major private organisations…must make it clear that they will continue to fully supply international markets and customers. Importing countries must play their part as well by keeping ports and borders open, while continuing to ensure proper food safety provisions are in place. There could not be a more important time in which to keep trade flows open and predictable.

After this pandemic, the world will have had a very vivid example of the problems that quickly result from disrupting the market exchanges around our most important commodity, food.


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