“Got Milk?” The COVID-19 Food Dilemma: Part II, the Food Chain Disruption

Don’t cry over spilled milk? Well, you’re lucky if you’ve got any milk at all. In part II of our two-part series on the grocery, we talk about how the current crisis is affecting the massive network behind the storefront. COVID-19 is forcing us to re-examine systems that have been in place for hundreds of years, including the food supply chain. Once a robust system maximizing efficiency and profit, the brokenness of the American food system is a shock to consumers and industry leaders alike. Can the problems be a blessing in disguise? How might these pressure points shed light on industry practices, and lead to social and environmental gain?


HomeStoriesThink“Got Milk?” The COVID-19 Food Dilemma: Part II, the Food Chain Disruption

Missed part I of the series? Read it here.

You finally got that milk you wanted for your morning coffee. Instacart delivered it from the local grocery around lunchtime, so tomorrow will be a morning just the way you like it: you’ll start the coffee maker and open the fridge, grab the milk, pour and go. But before you take that sip, know that it’s a miracle that milk made it from hundreds of miles away, passed through hundreds of hands and tens of vehicles and stops, to be enjoyed in your mug. It’s a miracle also because as you read this, up to 3.7 million gallons of milk are being dumped a day, an estimate by the Dairy Farmers of America, a major dairy co-operative, because of the demand shift in the country. So enjoy that milk, if you’ve got it.

The grocery store is commonplace, embedded subconsciously into our everyday existence. But behind it lies a choreographed network of worldwide production, trade, distribution, labor and logistics—one that is now in jeopardy. John Tyson (yes, that Tyson) bought full-page ads in multiple national and local newspapers on April 26 to make one point clear: “The food supply chain is breaking.”

Market summary last 6 months of Chef’s Warehouse Inc. and Blue Apron Holdings Inc. Images courtesy of Google.

Observe. On March 18th, a day after North Californians were ordered to shelter-in-place, while Blue Apron’s stocks (an American ingredient-and-recipe meal kit delivery service that had struggled for years prior to this pandemic) went way up, Chef’s Warehouse, Inc.’s (premier distributor of specialty food products serving chefs in North America) took a nosedive. Brands under its cooperative distributor, like Dairyland, Del Monte Meat Co., Wabash Seafood and others, all suffered the recoiling effects of COVID-19 shutdowns. 

And this shock to the American economy isn’t an isolated incident. As the Food and Agriculture Organization of the United Nations (FAO) reports, “world food prices declined sharply in March, driven mostly by demand-side contractions linked to the effects of the COVID-19 pandemic…” 

What does this mean? FAO predicts this fear may result in “reduced visits to food markets … a shift in how people buy and consume food – lower restaurant traffic, increased e-commerce deliveries (as evidenced in China), and a rise in eating at home.” So let’s unpack where the food chain has fallen apart behind the scenes, what this means for American agriculture and food processing workers, and why we need to take a proactive approach to learn from these specific points of failure to innovate the system for greater resiliency in the future.

For those of us nestled in the productive farmlands of Northwest Ohio, all this talk about food shortages sounds far away. For now, our store shelves are still stocked (except for yeast, it seems). Besides, why haven’t we heard more from the government about infrastructural strategies, especially on the food front? 

That’s because the conversation surrounding the future of food remains a contested one.  According to the United States Department of Agriculture (USDA), the U.S.’s resources will cushion us through the COVID slump. They say that, as of April 16th, 2020, “what we know is reassuring.” The USDA assesses that specific industries that are not labor-intensive (flour for example) are not anticipated to have any disruptions. Citing a minor “15% of total food consumption” coming from imports, America’s own resources should tide us over. 

While this is a favorable projection—”everything is fine, everything will stay the same”—international organizations such as the Food and Agriculture Organization of the United Nations (FAO) warn of a more complex reality: “We risk a looming food crisis, unless measures are taken fast to protect the most vulnerable, keep global food supply chains alive and mitigate the pandemic’s impacts across the food system… But there is no need for the world to panic.”

Naysayer may scoff at such an apocalyptic prediction. But the truth is that our world is much more interconnected and interdependent than we realize. 

Though a powerhouse in worldwide food production, the U.S.’s highly streamlined industrial food chains—once its best asset—are now becoming a logistical nightmare to navigate. On the news, you’ve seen the acres of onions and zucchinis plowed back into the good earth. There is so much excess food that even food banks and “Meals on Wheels” programs cannot store and distribute such large amounts—an extreme farce in face of worldwide and national hunger. Whether we want to believe the USDA’s appeasements that all’s well on the home front or not, the sacrifices being made on the ground represent both a warning and an opportunity for a reexamination of a system-for-profit and potentially a move toward a system-for-flexibility. 

Dairy is an industry hit especially hard by the pandemic. The New York Times reports that “[a]bout 5 percent of the country’s milk supply” is being dumped, this number expected to rise if America’s schools, cafeterias and coffee shops remain closed over the next few months. To put this into scale,take a major consumer like Starbucks, whose typical order of 3 loads of milk (~13,500 gallons) per day from a dairy processing plant outside of Cleveland has now shrunk to just one load every three days (or ~1,500 gallons a day). At a small farm of 200 cows in Northern Ohio, the Hartschuhs drained 31,000 pounds of milk into a lagoon. Because packaging processing plants weren’t designed for such shifts, it isn’t easy to adapt restaurant-sized bulk packaging into retail-ready containers. The shift, with the future still uncertain, still seems too costly of a move to make for most processors. 

Not only food in the dairy and vegetable industries, but also as slaughterhouses close, perfectly healthy and productive cows and chickens are being euthanized. So these farmers aren’t just losing out on one season’s harvest, but are forced to make drastic choices that upends an entire business and a lifetime source of income. 

The reduction in demand from the closure of restaurants and coffee shops doesn’t mean demand for dairy has ceased. According to the World Economic Forum, consumer demand is strong, so much so that “[p]anic buying has left grocery store shelves nearly empty in recent weeks amid business shutdowns and quarantines nationwide.”  As a result of a diminishing supply and an unmet demand, prices for meat and eggs are going up, for eggs “nearly 40% for the week end[ing] April 18.” 

So why doesn’t all that surplus milk and eggs just go to consumers, filling shortage with a surplus? With major restaurants closed and challenged by the need to shift to cash-paying, individual consumers, many farmers are unable to navigate the current disruptions in the supply chain. According to PBS, one main obstacle at this time of the year is for farmers to decide “whether to spend the money to harvest it, which is the most expensive part of farming in the produce industry. So, if you already know you’re taking on a 100 percent loss, do you want to make it 160 percent by harvesting a product that doesn’t have a profitable home?” The lack of profit in the current food supply system ultimately prevents the creation of new paths that food might take to make it to the consumers

As the industry pivots, the labor workers behind the scene will suffer the most, suffering layoffs and prone to infection due to closely packed working conditions. The systemic weaknesses that are usually glossed over are now made prominent by the impact of COVID-19. In recent days, the back-of-house deaths in factories and processing plants bring social issues to light—immigration, affordability and access to medical care and unemployment. These types of work make it impossible to socially distance. 

On top of this, there are infrastructural mishaps that make matters worse. In April, for instance, the USDA contradictorily granted waivers for 15 company plants to increase poultry processing speed — cramming more workers on the processing floor who typically stand shoulder-to-shoulder, increasing the likelihood of employees spreading COVID-19 by 10 times. One of Tyson’s plants that received such a waiver in Robards, Kentucky, now reports 68 of their COVID cases are Tyson employees, eight are close relatives or household members. Workers on the line felt that the company cared more for production than their health, another reason why the line speed was prioritized and even increased despite risking the employees’ health. COVID-19 infections are 75% more in those counties with meat processing plants than the average U.S. county.  As of May 13, data shows there are at least 14,000 reported positive cases at 181 meatpacking plants in 31 states and at least 54 reported worker deaths at 30 plants in 18 states. When compared with numbers just two weeks prior on April 28, the jump in death and infection is staggering: a nearly 200% increase in deaths and 218% increase in the number of workers infected.

The government has so far mandated no enforceable protocol to mitigate the spread of the disease within meat-packing facilities. On the contrary, President Trump signed an executive order on April 28 for meat and poultry plants to continue maximum production to prevent industry disruptions. An unregulated, uneven and scattered approach from companies handling the COVID crisis means unprotected workers. Some are installing infrared walk-through temperature scanners, providing masks or face shields to employees and using Plexiglas dividers to protect workers on the processing line. But there have not been uniform, enforceable guidelines from the government. 

Moreover, about half of our agriculture workers are without paperwork. When these “essential workers” get sick, they’re unable to claim unemployment and stimulus checks or have adequate medical care coverage. So the disease spreads quickly in factories, plants and fields, becoming COVID hotspots in the nation. Whether we like it or not, the plight of all workers across the nation behind-the-scenes is directly tied to us right here on the receiving end of the food chain. 

Exchanging a System of Profit for a System of Flexibility 

Some say temporary, albeit huge waste in a short period of time may not be worth innovating the mammoth supply chain for. Some industry analysts shrug off the possibility of a permanent new normal: “It isn’t like restaurant demand has disappeared forever… Even if it were possible to re-format to make it an 8-ounce package rather than a 20-pound bag, the dollars and cents may not pan out.” The system works well, by some standards anyway, in “normal” times pre-pandemic. So unless the bad times are here to stay, there’s no point in making the system fit a “new normal.” Right? 

But what we are seeing is not just an inefficiency during world crises, but an exposure of precise points of vulnerability where the system needs reinforcement. Now is not the worst time to have an in-depth conversation, but actually the best time to figure out how to survive the pandemic AND to come out on the other side a more robust and conscientious nation — one willing to face challenges for the public good. By tackling issues so exposed as they are now, we actually have an opportunity to tackle deeply-seated problems people don’t bother to look at in normal times. Instead of coping in the short term, we might be able to come out of this crisis with a better “new normal,” a silver lining for the humanity of our country.

1) Cultivate a culture that values resilience—even in good times

America has never had to think so urgently about food logistics for the sake of public and global health until now, but there have always been vulnerabilities in the system. A lot needs to be done during “good times” to prepare for the “bad times.” These include upgrading back-of-house protocols and care for laborers that are “essential” personnel though typically unseen, as well as a concerted effort across the nation to shift both consumer behavior and production practices toward sustainable food security practices, increasing the efficiency of the food system—particularly on the aspect of dealing with waste, a sensitive topic today that brings the greater issue of hunger and inefficiency to the fore.  

A 2017 study on the global food system shows that “[t]he highest rates of loss are associated with livestock production,” and practices like meat and dairy consumption (responsible for massive amounts of waste) lower the efficiency of the overall food system, and also increase negative health implications for Americans (making them more vulnerable to diseases like COVID-19).  One in nine Americans suffers from hunger, yet the 2010s saw 50% more food waste than in the 1970s; today, an estimated 30-40% of the food supply is lost, which in 2010 was an estimated 133 billion pounds of perfectly good food discarded. 

Global consumer trends such as overeating and food discarded have substantial consequences on food security and sustainability. Long-term shifts toward more resilient practices and contingency plans need to be encouraged and supported on a broad basis in normal times, and cannot be done overnight.

2) Improve transparency in back-of-house protocol and practices—behind-the-scenes in factory work and agricultural industries

Undocumented workers are getting sick, unable to seek out medical care or receive government stipend. This brings up a social equity issue that is emerging in the pandemic conversation, and shows just how interconnected we are. Vulnerable populations bearing the brunt of the onslaught of cases and deaths is not an isolated incident without ripple effects; even those in prisons have a huge impact on medical resources and equipment. 

These sectors constitute a large yet invisible aspect of public health we often ignore. It is time to take a critical look at our food production systems—to have a socially equitable policy that isn’t driven by politics, but by public health with humanity in view. Ultimately, companies’ finances need to be driven by equity and human value rather than profit. As far fetched or impossible as that may sound, It’s a better, wiser long-term decision to innovate with people in mind.  

3) Adopt sustainable agricultural models—incentivize farmers as land stewards to implement more diverse, responsible, sustainable and small-scale operations

Every industry, including livestock and agriculture, will likely face downsizing (or at the very least, change) in the near future. It would be prudent to, at the same time, adopt more sustainable practices that will incur less cost and sacrifice when disrupted. The old system of big agriculture dependent on mono-crops, chemicals and fertilizer relies on a rigid timing that fails in times like today. These practices are not only disastrous in bad times, but also slowly eroding major resources we don’t typically care enough about. The harmful algal blooms and the hypoxic zones that are emerging are just as disastrous as now, not to mention the loss of 75 billion tons of eroded fertile soil across the globe. 

4) Support emergent models of flexibility—keep small businesses and farms around in good times

A food supply designed for flexibility help small players thrive in good times, knowing they are more adaptable and especially important in bad times. A mini “buy local” movement is happening since the larger producers are shut down, and others are finding resilience by shortening the food chain and going farm-direct, skipping grocery stores altogether to buy perishables from local farmers. Some small food retailers, such as bakeries, are able to stock up on goods found at grocery stores, like butter, cottage cheese and milk, that can attract and supply buyers informally on social media platforms. Such small-scaled businesses and retail shops are proving their value in flexibility and resilience to both suppliers and consumers by acting as a local connector in times of national crisis. 

5) Encourage social tech platforms to innovate agile shifting between industry manufacturers & producers and cash-paying consumers 

As consumers are seeking ways to shorten their food chains in the COVID-19 crisis, there remains a gap between cash-paying customers and manufacturers & producers stuck in the system—a gap that smart-apps and tech companies have a major role to play in connecting buyers and sellers. Can automation and programming come together to make more flexible and agile systems for food processing and packaging? Can coding and /programming on a broad scale replace rigid networks that exist between food sources and the customer? Can technology that has influenced so much of the production line come to the forefront and connect existing demand to a diverse market? The same way that grocery storefronts are reinventing the shopping experience and partnering with tech companies like Uber and Amazon, meat and agriculture industries need to seek out new innovation for a happy medium that allows for safe labor practices while maintaining supply for consumers. 


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