Continued Challenges to Global Food Supply Chains
April 23, 2020
The U.S. government and food industry groups have reassured the consuming public that our food supply is strong, and empty shelves do not signal a looming food shortage. So, what exactly has caused disruptions in the food supply chain?
Empty shelves have partly been created by people panic buying and hoarding in anticipation of a prolonged hunkering down period. However, other challenges in the supply chain have been lurking in the shadows for several years, and the current pandemic is making these more apparent. This blog explores a few of the challenges.
Food Supply Chain Workforce Vulnerability
The coronavirus has exposed our workforce vulnerability to any contagion. Agriculture and food production are labor-intensive industries, often done in close contact by personnel that accept these jobs because others won’t.
We rely on these workers to harvest, process, stock and deliver our food. Unfortunately, their vulnerability has exposed gaps in our food supply chain, with little to no backup plans. Social distancing practices have slowed our ability to harvest and transport in an efficient manner, leading to less crops being harvested in some localities and crops wasting in our fields.
Not Unique to the U.S.
The labor situation is not unique to the United States, and other global agricultural growing regions and food manufacturers currently face similar challenges. Frankly, problems existed before COVID-19 because of the difficulty in mobilizing enough farm workers to most geographies at appropriate times for harvest. However, this challenge is extremely exemplified during this crisis because of the rapid spread of the disease and its effect on agricultural and food workers.
Other global food supply chain personnel afflicted by COVID-19 or isolation policies include dock workers, import and export control officials, ship crews, and office workers. The U.S. imports approximately 20 percent of its food. This has led to spot shortages of some products, like fruits and vegetables, tree nuts, seafood, spices, some meat and dairy, and other imported products.
Agricultural Processes Disrupted
Agricultural commodities and specialty crops are produced in all 50 states in this country, and harvest happens in several discrete stages throughout the year. As food leaves the farm gate, it enters a very complicated, interconnected web of transportation, processing, and an additional transportation stage before it is placed on shelves for purchase by consumers. Perishability makes it especially difficult to store and/or route products to processing and ultimately the consumer. Therefore, it is important for the supply chain to repetitively function without any mishaps, such as the ones currently occurring.
Impact on Meat Processing
This pandemic is beginning to severely impact meat processing. Slaughterhouses, despite being some of the most sanitized facilities in the food processing industry, are globally few in number. The industry has repetitively consolidated in past decades to maximize efficiency and profitability. As a result, these plants employ large numbers of people, who work in close proximity to each other. The large numbers of meat plant employees contracting COVID-19 is not surprising despite numerous precautions by the industry in recent weeks to protect employees.
Now, many plants have reached a tipping point with viral cases and have started to close. Unfortunately, when a large meat plant closes, it ripples throughout the supply chain—backing up animals all the way to ranches and forward to the consumer, causing a tight market supply of meat in many geographies. The reduction in food service demand will ease some shortages, but as isolation restrictions ease and restaurants begin reopening, the retail meat supply will potentially be leaner in coming months.
Not Enough Truck Drivers
One weak point in U.S. supply chain linkages that existed pre-pandemic and is now being strained is truck driver shortages. Our country’s shortage of drivers exists because most high school graduates enter other vocations due to the stringent requirements for interstate commerce drivers. Currently, drivers under 21-years old can not participate in interstate commerce. The Federal Motor Safety Administration and interstate trucking companies are in the midst of a three-year collaboration, studying the potential to allow 18- to 20-year-olds to apply for truck driving jobs if they possess the U.S. military equivalent of a commercial driver’s license.
This pandemic places additional strain on the network because of ill drivers, shuttered truck stops, closed state and national borders, and restaurants only allowing takeout. With less demand for food service inventory, truckers are also rerouting their loads from food service to retail outlets. When growers are unable to schedule trucks for pickup and delivery, they usually leave crops unharvested to minimize financial loss.
Not Enough Storage Capacity
Another weak point now significantly strained is the need for more refrigeration and storage capacity in our country. Some lack of storage is attributed to fewer storage units being constructed, as the food industry carried less inventory and practiced more just-in-time delivery systems. Thus, our lean food system isn’t stocked with extra inventory to fill high-demand needs as is currently being experienced. Today's spot shortages will be remedied over time as plants, especially meat processing, come back online and by inventory restocking.
Food growers have usually planted just enough crop to meet consumer’s forecasted demand. Yet when weather or insect infestation destroys portions of crops, spot shortages occur until another region of the world fills the gaps. In the case of a global pandemic, our vulnerability to backfill those gaps is exposed, without an easy solution.
Future of the Global Food Supply
What does this all mean for our future food supply?
One thing is for certain—there will be changes in personnel safety on our farms and in plants. Retailers and consumers are witnessing the vulnerability of our food supply chain. And while this current crisis is not endangering our overall food security, it is inconveniencing consumers and giving them some angst. This presents future opportunities to build regional and domestic food security with less reliance on moving products across the country or importing significant amounts of food.
How NCFIL Can Help
How can the North Carolina Food Innovation Lab (NCFIL) help growers and food processing companies during and after the pandemic?
NCFIL is a plant-based product development and pilot plant facility that focuses on helping our clients develop, manufacture and launch new products. Other services we offer are ideation sessions to solve problems companies encounter, such as mapping their supply chain or expansion of their product offerings. We also consult with food companies about maximizing their operational efficiency or improving personnel and food safety. NCFIL’s clientele includes entrepreneurs and multinational food and equipment companies.
As all of us hopefully exit social isolation in the coming weeks, we’ll need to make changes in our labs and production facilities. We’d welcome the opportunity to work with many of you in these endeavours.