Empty Grocery Shelves and Rotting, Wasted Vegetables: Two Sides of a Supply Chain Problem

In Florida, farmers are tossing away thousands of pounds of zucchini and leaving tomatoes to rot on the vine. In California, they’re plowing under squash. In Wisconsin, dairy producers are dumping milk down drains. And in at least eight states, the coronavirus has sickened and killed workers at meat processing facilities, forcing operations to a halt. 

A single pork processing facility, in Sioux Falls, South Dakota, is now the biggest Covid-19 hotspot in the country, with more than 600 workers ill. 

With no place for their livestock to go and unable to afford feed, farmers are being forced to euthanize animals they raised for slaughter.

“They’re going back to their farms to kill birds because they can’t process them,” said Mary Hendrickson, an expert in food systems with the University of Missouri. “No farmer wants to do that.”

All this at a time when food insecurity is on the rise.

As the coronavirus pandemic rips through the food system, the supply chain—from farm to supermarket—is showing signs of distress and sending up warning flares about the fragility of the world’s food production system. Many analysts, farmers and researchers are now examining with fresh urgency how supply chains might be retooled or regionalized to handle disruptions, including those projected to increase with climate change. 

“What this immense public health crisis has done is exposed really sharply the cracks in so many of the systems we’re living with, the food system among them,” said Melissa Leach, a member of the Brussels-based International Panel of Experts on Sustainable Food Systems (IPES-Food). “Disaster as it is, it might be an opportunity to rethink food systems fundamentally.”

A decades-long trend toward mega-mergers and corporate consolidation across the food system—from seeds to processing to consumer staples—has led to a sprawling supply chain that’s more easily upended when disasters hit, critics say.

“Our food systems are highly vulnerable because they’re so globalized,” Leach added. 

Last week IPES-Food published a report calling for a paradigm shift in agriculture toward a more diversified system, based on principles of agroecology, in which a greater variety of crops are grown, using fewer chemicals, and often on a smaller, regional scale. The United Nations Intergovernmental Panel on Climate Change and other UN organizations have said those principles will be critical for sustainable food production as the climate continues to change.

“A highly specialized, centralized, concentrated agri-business food system is never resilient, so it’s vulnerable to anything that comes its way,” Hendrickson said. “Farmers have to be able to make decisions; they can’t be beholden to these centralized supply chains. That’s going to make us better prepared for climate change and ongoing pandemics.”

Eating 100 Percent of Meals at Home 

Since the onset of the pandemic, consumers have flocked to grocery stores, stripping shelves of pantry staples like flour, dried beans and canned vegetables. Economists say that Americans typically eat 50 percent of their food away from home. But with the closures of workplaces, entertainment venues and restaurants, that changed suddenly, and shoppers descended on grocery stores and swamped online retailers.

“At first I thought it was strictly hoarding,” said Joe Glauber, a senior research fellow at the International Food Policy Research Institute and former chief economist at the U.S. Department of Agriculture. “But once you start forcing that 50 percent of consumption into the house, you’re going to have a big switch.”

The supermarket supply chain, Glauber explained, is set up to minimize waste, with inventories calibrated to a “just-in-time” concept, meaning the stores don’t keep big inventories.

“That’s part of the reason you see this problem with grocery stores right now,” he said. “Plus, people don’t want to go to the store every day, so they’re buying larger quantities. All of that is pressuring grocery stores. It’s still hard to get staples. Everybody’s making bread and posting pictures of what they ate last night.”

Most producers are set up to provide food for either the retail or the institutional side of the supply chain. So, as restaurants and huge institutions, from universities to cruise lines to theme parks, have closed down and stopped buying food, producers who supply them are either scrambling to find new markets or just dumping their products or plowing them under.

“Fewer school lunches are being served. People aren’t eating at restaurants. Other institutions have closed,” said Mike Stranz, vice president of advocacy for the National Farmers Union. “Those supply chains are still there, but they can’t adapt as quickly. It’s not a seamless transition to go from supplying institutions to retail.”

Even before the coronavirus arrived, the American farm industry was facing economic hardship. Low commodity prices, worsened by President Donald Trump’s trade war with China, and a series of natural disasters made 2019 tough. Now Covid-19 and projections for early flooding across the Midwest are shaking the industry again, making 2020 look increasingly dire. 

But farmers who sell into shorter supply chains—directly to farmers markets, for example—seem to be faring better during the Covid crisis than others. Many are hand delivering produce boxes to peoples’ houses, doing “drive-by” markets or inviting shoppers to pick up pre-made boxes at their farms for contact-less shopping. 

“In terms of resilience and nimbleness, they seem to be able to pivot and figure out new supply chains quickly,” said Gail Feenstra, deputy director of the University of California-Davis Sustainable Agriculture Research and Education Program (SAREP). “They’re always struggling because of the competition that comes from the global food system. It puts many of them at a disadvantage. But now that system is in complete disarray. It allows these regional food systems to emerge. They’re the ones that are bringing relief to communities.”

This ability to pivot, some researchers say, underscores the dangers of a food system that’s become too centralized, with individual farms producing just one or two things, making them overly reliant on a narrow market for their products. “People who grow corn and soybeans for the market, they have fewer options,” Stranz said, referring to the United States’ two biggest commodity crops. 

The same goes for livestock producers who now have only a handful of places for processing and selling their animals.  

Smithfield Foods, the world’s biggest producer of pork, announced Sunday it would close down its Sioux Falls plant, which processes 4 to 5 percent of the country’s pork.

“These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers. These farmers have nowhere to send their animals,” said Kenneth Sullivan, president and chief executive officer, for Smithfield, in a statement.  

But with more processing facilities and a distributed system, livestock producers would have more options and the interruption to the supply chain would be limited. 

“If you had four plants rather than one, you could isolate the problem plant,” Hendrickson said. “Redundancy is actually essential for resilience and it’s critical to something like this pandemic.”

Relocating California to the Mississippi Delta

Over the last 30 or 40 years, global agriculture has instead moved toward a system that critics say has become too large and focused on economies of scale, losing the redundancy that’s important for food security — either in a time of pandemic or natural disaster.

“The big systems become non-resilient,” said Marty Matlock, executive director of the University of Arkansas Resiliency Center and a professor of ecological engineering. “We need more than one supply of vegetables, of fruits, of protein.”

Earlier this year, the World Wildlife Fund released a report called the “The Next California, Phase 1: Investigating Potential in the Mid-Mississippi Delta River Region.” With help from government and academic researchers the group—as the report’s title implies—investigated a potential new growing region that might partially replace the output of California, which currently produces one-third of the country’s vegetables and two-thirds of its fruits and nuts.

“California’s becoming a more difficult place to produce. You have winters that aren’t cold enough and freak freezes in the spring,” said Jason Clay, the senior vice president of markets at WWF. “Is there a way to find places to take the pressure off?”

The group settled on an area in the Mississippi Delta that has some ideal characteristics, including fertile soil, ample rainfall, low land costs and a labor force. In the next phase, the group plans to work with universities to set up a pilot project. The idea, ultimately, is to create a model that can be reproduced elsewhere in the world, replicating regional food systems everywhere.

“Every country has a California in their food system, and they’re trying to find out where their next California is going to be,” Clay said.

Matlock, who worked on the report, said these smaller, regional food systems are especially critical with the likelihood for more disruptions. 

“We need to be decentralizing production to the areas that have the ecological resources,” he said. “With big systems you lose redundancy. When one thing goes down, the whole system goes down.”

Leading Senate Democrats Target Agricultural Mergers and Monopolies

Over the last several years, the issue of consolidation in the global food and agriculture industries has grabbed the attention of law and policy makers who increasingly say that placing most of the food supply—and political power—in the hands of just a few companies is bad for consumers and the planet.

Sens. Elizabeth Warren and Bernie Sanders have advocated for the break-up of agricultural monopolies, and Sen. Cory Booker introduced legislation last year that would place a moratorium on agricultural mergers and bolster antitrust enforcement. In January, Booker introduced legislation that would put a moratorium on large factory farms. 

Advocacy groups say these efforts to shrink farm systems are more critical now, but recognize the challenge ahead.

For starters, the Trump administration in late March resumed a process allowing expedited mega-mergers.

“It’s really poor timing because everyone’s eyes are on the pandemic,” said Amanda Starbuck, a senior food researcher and policy analyst at Food & Water Watch. “We saw, after the recession of 2008, even further consolidation in the food industry. My worry is, with smaller farmers and businesses going under because of the economic strain, bigger players are going to buy them out.”

Advocacy groups are also keeping an eye on the recent stimulus funds approved by Congress, which directed $23.5 billion to farmers. Over the last two years, the Trump administration has given $28 billion to farmers to compensate them for the losses they’ve suffered from his trade war with China. Most of that money went to larger operators, suggesting to critics that the same will happen again with the latest infusion. 

That could continue to make the big bigger and push smaller operators out of business.

“This is more than a dress rehearsal. This is it,” said Feenstra, of UC-Davis, referring to the disruptions caused by the pandemic. “This is going to be here for a while and it isn’t the last time this will happen.This is an opportunity for our policy makers to invest in small and mid-scale businesses.”

Even larger producers are viewing the pandemic as a kind of test.

“It’s during this kind of outbreak that you realize you’d better start planning,” said A.G. Kawamura, former agriculture secretary for California and a major grower of strawberries and green beans. “You’re going to end up with more droughts or flooding and warming patterns. Shame on us if we don’t put into place resilience planning for some of the challenges in front of us.”