Column: COVID-19 creates unprecedented times for food supply chain
Unprecedented is an adjective that has been used frequently this spring. Aptly so.
The shutdowns and stay-at-home orders that have taken place due to the COVID-19 outbreak do not compare to anything experienced by society, at least not in our lifetimes.
The situation also has turned the food supply chain on its ear.
It is an interesting case study in just how intricate, perhaps inflexible, the food supply system is for most of the world’s population.
In the U.S., less than 2% of the population is in the business of growing produce or raising livestock for meat and dairy. There are many more who are in food production, of course, but they still rely on the production of those 2% — actually, it’s closer to 1% — to make their products.
What, how much and how those farmers and ranchers produce is based on years of consumer trends, calculations and technology. In many cases, it’s directly linked to the estimated need of those who process the raw product.
Potatoes are one of the most consumed and processed vegetables in the world. The potato industry is also a prime example of what happens to a well-oiled supply chain when the market suddenly shifts.
For years, consumer trends have been moving away from cooking at home toward eating out. That’s been good for the frozen french fry producers that supply the McDonald’s, Applebee’s and Wendy’s of the world. It’s bad, however, when folks suddenly aren’t eating at restaurants at all, nor are they getting drive-thru or take-out meals as often.
Processors often contract with growers well before they anticipate needing product so that ample acres can be planted. Sticking with potatoes as the example, the varieties planted, size they’re allowed to reach, crop protection agents used and storage temperature can all be different between spuds meant for processing and fresh ones marketable to retailers.
That’s why there is a surplus of potatoes in the supply chain, like so many other perishable items.
Sales of non-perishable processed goods for retail, like canned vegetables or instant mashed potatoes have spiked. Short-term, it’s not a bad thing, but long-term supply is potentially threatened as growers reduce acreage. Eventually, the foodservice demand will come back, and what then?
No one can be certain. It’s unprecedented.
Top — An Applebee’s in Grand Rapids, Michigan, sits empty on a Saturday evening in the spring of 2020. Photo: Zeke Jennings