Top threats to US food supply chain

Food Supply Chain Problems During COVID-19

Top threats to US food supply chain

The complex global systems that bring food from fields to forks are overcoming many hurdles to keep us fed.

It’s a luxury easily taken for granted in the developed world – that we can expect diverse, healthy and safe food on our supermarket shelves. But this is only possible thanks to the complex global supply chains capable of rapidly and safely growing, processing, and transporting food by land, sea and air from fields around the world.

The scale of these systems is staggering. About 23% of the food globally produced is traded internationally, and countries worldwide import food at a value of approximately $1.5 trillion annually. It’s no surprise then that the global food system accounts for 10% of the world’s GDP and employs as many as 1.5 billion people.

However, as governments around the world take measures to prevent the spread of COVID-19, the food system faces extraordinary disruption. Social distancing measures, travel bans, border closures, restricted transport channels and the temporary shutdown of much of the food service industry are significant hurdles to overcome.

From farmers and field workers, to food processors and retailers, the global pandemic is causing problems at every stage of the supply chain. For now at least, many sectors in the developed world have shown enough flexibility to ensure the delivery of food to consumers by adapting to new conditions. But is this also the case in less developed parts of the world?

To understand the challenges the world faces, we spoke to leading experts on global food supply chains to ask: how are we preventing a health crisis from becoming a food crisis?

Where the World Gets its Fresh Food

The world’s population is dependent on global trade for access to fresh, healthy, safe food. The United States, for example, imports 32% of the fresh vegetables, 55% of the fresh fruit and 94% of the seafood it consumes every year.

In the EU, around 80 million tons of fresh fruit and vegetables are produced annually for the fresh markets, according to Freshfel, the European fresh produce association. Of that, more than 30 million tons is traded between member states, with an additional 5 million tons exported outside the union.

In total, the EU imports almost 93 million tons and exports 91 million tons of agrifood products each year.

 

Today, countries often specialize in producing certain types of food and rely on each other to secure produce that can’t be grown locally due to climate or is cheaper to grow elsewhere. This reliance has led to great variety in our diets.

But what do global food chains that deliver these products to our fridges look ?

Heike Axmann, Expertise leader in Supply Chain Development and Logistic Design of Fresh Food Chains – one of the applied research groups at Wageningen University and Research, provides an example using French beans.

The chain starts with laborers picking the vegetables on multiple smallholder farms in Kenya. The beans are then transported, packaged, shipped by air freight, and eventually delivered to supermarkets across Europe.

But, she points out, supply chains can look very different to this. Most of world’s farmers are smallholders, often not connected to the global system or linked formally to markets.

Their produce often reaches markets via much smaller, informal, local systems.

Typically, smallholders sell their produce to middlemen who transport it to towns and cities to be sold at markets or wholesale to shops and restaurants.

When the Music Stops

Regardless of what the produce is, or to where in the world it’s moving, all food supply chains are dependent on a key component: people.

It’s people who sow seeds and harvest vegetables, people who drive trucks and package food, and people who unload the shipping containers bringing food from across the ocean.

A pandemic such as COVID-19 forces people to change how they work and how they eat, meaning there are multiple points of disruption that can ripple through supply chains in both directions.

“It’s a dance in a historic movie,” says Nancy Tucker, Vice President, Global Business Development at Produce Marketing Association (PMA), a trade organization representing companies in the fresh produce and floral supply chain. “The dancers move from partner to partner down a chain, but if the music stops the dancers all pile up.”

She gives the example of Chilean cherries, 90% of which are normally shipped to China, where they are distributed around the country. When the cherries are unloaded, the containers are refilled with another product and then shipped to another country, where the cycle continues with the containers eventually making their way back to Chile to be used once again for cherries.

However, the onset of COVID-19 stopped the dance, causing the containers to pile up –initially in China, where stringent quarantine measures prevented workers from unloading and reloading containers.

The number of containers leaving Shanghai dropped by 25% in February, which had a knock-on effect of causing record low levels of available containers in other ports around the world.

With Brazilian coffee sellers and Canadian lentil exporters struggling to secure the containers needed, trade began to seize up.

To successfully tackle this challenge, cross-border collaboration and organization is paramount, and measures are being quickly implemented to keep produce on shelves.

Binard points to the closing of the Austrian border with Italy as a success story where swift actions kept trade moving: “There were about 100 kilometers of traffic jams and, in less than 48 hours, arrangements had been made to set up ‘Green Lanes’ that allowed fresh produce deliveries through.”

Changing Consumer Demands Mean Supply Chains Have Had to Shift

Beyond transportation and logistics, one of the biggest challenges for food supply chains has been the immediate shift in consumer spending brought about by the temporary closing of virtually the entire food service industry, from school cafeterias to restaurants to canteens to hotels. It is a huge global market – worth an estimated $3.4 trillion in 2018 – so the sudden lack of demand has an enormous impact throughout the food supply chain.

In the U.S. and the EU, about one third of all fresh produce is delivered to the food service industry. The loss of this market has forced supply chains to quickly figure out how to shift their focus. This has presented a massive challenge.

Organizations such as PMA are helping producers find new buyers or shift their process to meet different needs, but it is not as simple as delivering food to a grocery store instead of a restaurant.

What consumers buy to cook at home differs from what they order when they are out and with restrictions on how often people can travel to supermarkets, they are more ly to buy canned goods with longer shelf-lives than fresh produce.

Added to this are uncertainties around the speed at which the different parts of the food service industry might be able to reopen and how the economic fallout from the crisis will affect consumer spending.

The Potential for Both Food Waste and Insecurity

Fresh fruit and vegetable products are particularly at risk to disruptions in supply chains, with perishable goods rotting and going to waste if left too long. Even before the pandemic, one-third of all the food produced around the world was lost or wasted before it was consumed, and COVID-19 is introducing new contributing factors.

“We expect an increase of food loss and waste around the world for a number of different reasons,” explains Axmann. “In Europe, for example, the main reason is a lack of labor and the sudden drop in the food service market.

“But we also expect higher losses and waste in developing countries because of border closures, trade bans, restrictions to sending products to markets, as well as the unavailability of labor at the right moment. There is the potential for a long-term increase in food insecurity.”

Smallholder farmers in developing regions and farm workers, often from economically difficult backgrounds, are bearing the brunt of these challenges. Reduced trade, the closure of village marketplaces and domestic travel restrictions pose a very real threat to their livelihoods. They also create the potential for a dire situation where food goes to waste while others go hungry.

Take rice for example. More than half of the earth’s population (3.5 billion) depends on rice as a staple to their diet.

The pandemic has seen panic buying which in turn prompted rice-exporting countries to impose limits on exports leading to a jump in its price. In Thailand, rice prices rose by 15% in March to its highest level since July 2013.

This hugely impacts poorer households, where rice can account for almost half of monthly spending.

Adapting to the Challenge but at a Cost

Crucially for the global fresh food supply, farmers, industries, organizations and authorities continue to rise to the challenge – from smallholders implementing social distancing and increased hygiene measures to the global coordination and cooperation that keeps the trade systems we depend on moving.

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“There are a lot of new protocols that need to be put in place and that is challenging,” says Binard. “But the sector has demonstrated that it can organize to the specific pandemic.”

However, this comes at a substantial price. For growers and suppliers in Europe for example, Freshfel calculates an increase in costs of €1 billion in the first two months following the pandemic. This is largely the result of mass logistics disruptions, and increased workforce and operations costs through measures supplying personal protective equipment.

“As the crisis continues, the question is how long can the sector continue to support this additional cost?” asks Binard. “Hopefully, if we move back to normal, there will be better rules and organization of workers that could decrease the cost.”

The needs of the industry will also change with the seasons. In the northern hemisphere the summer fruit picking-and-harvest season, for example, will demand new efforts to allow migrant laborers to travel across borders and to work safely in fields and packing houses.

The Road Ahead

There is hope that this turbulent period will result in more flexible and resilient supply chains that can better adapt to sudden changes in demand. These will be key to securely supplying the world with the food it will need in the future.

One solution to help achieve this is the greater use of technology and data. Tucker explains, “This pandemic is going to have long-term effects on every part of our world. There will be greater use of technology, such as robotics in picking products, warehouses and cold storage areas.

“There will also be increased data usage. We will be collecting more at every point to gather information as food goes through the supply chain. The more data we have, the more accurate models and better forecasting we can make.”

The panic buying that occurred in the early stages of the pandemic highlights how crucial a role data can play. By providing transparency on how much of a certain product is available and when it will be delivered, consumers are better informed and can remain more rational in their spending habits.

In the meantime, the industry continues to adapt, aware that further uncertainties lie ahead. But there is collective understanding for the need to build a better, more robust system that can benefit everyone.

As Axmann says, “Due to COVID-19 we are going to rethink our current food systems. This offers opportunities for transitions, making our current systems more resilient and sustainable, and global systems more intelligent.

To make this happen, strong and effective collaborations between academia and the private and public sectors are needed.”

Bayer’s Commitment

Источник: https://www.bayer.com/en/news-stories/feeding-the-world-in-a-pandemic-can-food-supply-chains-cope-with-covid-19

The Food Supply Chain is at Risk

Top threats to US food supply chain

The global food supply chain is complex, vast, and vital to human existence. For that reason, when there are disruptions to the food supply chain, it makes major headlines. These headlines come in all shapes and sizes, including disruptions due to food recalls, natural disasters, disease, and political unrest, among others.

Perhaps the biggest threat to the global food supply chain is climate change, as its effects are being felt already in many regions of the world. And while these disruptions do not always put the overall supply of food at risk, they often drive up the prices of common goods.

For a lot of the world’s population, small price increases on staple foods for their families can be crippling.

Climate Change and the Food Supply Chain

In a new report from the Intergovernmental Panel on Climate Change (IPCC), climate change is examined through the lens of the global food supply chain.

While rising temperatures and sea levels are contributing to more extreme weather events, and I’ll touch on these later, the biggest impact that climate change could have is on the food supply. Scientists estimate that for every 1 degree the planet heats up, the yield of staple cereal crops will decline by 10 percent.

The latest estimates, unless the planet can lessen its reliance on fossil fuels and cut emissions, is more than a 1 degree increase in temperatures, which could prove to be catastrophic in the long run.

In an article I read by Jason Hickel at Foreign Policy Magazine, he points to the example of the Himalayan glaciers. The glaciers are melting at a faster pace, which means that the runoff from these glaciers is not being replenished each year.

The issue, beyond the melting causing rising sea levels, is the fact that half of Asia’s population relies on that fresh water for household consumption as well as agriculture.

Without action, this trend will result in a lack of water for agriculture in as little as a single lifetime, which will devastate the entire region.

And that is just one example. Rising temperatures are threatening to turn once farmable land into vast wastelands where crops are unable to grow.

This includes large swaths of North Africa and the Middle East, which according to some studies, could become uninhabitable in the not-too-distant future. The plains and southwest of the US are also at risk of becoming inhospitable to farming.

This is clearly a scary thought given that these regions are critical areas for agriculture in the country.

Natural Disasters and the Food Supply Chain

Natural disasters and extreme weather events seem to be more common these days, which can be partially attributed to climate change. But when natural disasters strike, the food supply chain has many roadblocks to overcome. In the aftermath of a disaster, getting aid to the affected area is of utmost importance.

As we’ve seen over the last few years, many areas, even when they try to stock up in advance of a storm, are sorely lacking in terms of basic supplies. Getting supplies into these areas can often be difficult, as roadways and rails are often compromised. Also, as with Hurricane Dorian in the Bahamas, the storm can destroy the supplies that are on hand.

But the aftermath of natural disasters goes way beyond the initial rush of getting food supplies to victims.

In the aftermath of Hurricane Florence, for example, the agriculture industry was in a state of despair. Soybeans and corn crops in North Carolina lost an estimated $1.1 billion. For these farmers, they had to decide whether to harvest early or hope the crops could weather the storm.

For most farms, the crops were so heavily damaged that they could not be salvaged. The same is true of the peanut crop. While some crops turned out alright, many suffered severe water damage and began to sprout. Farmers indicated that this severely impacts the quality of their goods.

Hog farms were also hit hard in the aftermath of Hurricane Florence. Hog farming in North Carolina is a $2 billion industry. Hurricane Florence took direct aim at the state’s hog farming counties of Sampson and Duplin, leaving farmers scrambling to take action.

First, the farmers had to evacuate their animals to higher ground to ensure they would survive the storm. But there was another major challenge ahead of farmers – waste lagoons.

Waste lagoon is the pork-industry term for a large pit containing the liquid and solid waste from these animals when grown in a confined feeding operation for slaughter. A number of these pits were compromised, polluting surrounding waterways.

These contaminated waterways then need to be cleaned and run the risk of contaminating other crops in the area. In all, more than 6,000 hogs perished in the storm, raising the cost of pork due to a limited supply.

A final issue with natural disasters is the tightened labor market. Again, when Hurricane Florence swept in to North Carolina, it destroyed houses that the migrant workers had rented. These workers lost their possessions and ability to work. With the flood waters, there was simply no work to be done.

This equates to no paychecks. The end result was that many workers moved on to Florida to get ready for the tomato harvest. Crew leaders were lucky to get 10 to 20 workers in the field on any given day. This slows down the harvest but also leads to more spoilage and less product available for the market.

Epidemics and the Food Supply Chain

A third threat to the global food supply chain is the risk of airborne pathogens. In recent years there have been outbreaks of avian influenza and swine fever. Back in 2017, a chicken farm affiliated with Tyson Foods discovered a flock had been contaminated.

The flock consisted of about 73,500 birds, which were used for breeding. As a result of the outbreak, the flock had to be destroyed. To avoid a full-on outbreak, all farms within six miles of the affected farm in Tennessee were quarantined. This included about 30 farms.

That same year, the H5N6 flu strain struck South Korea, which resulted in authorities exterminating about 17 percent of the national flock of chickens and 28 percent of ducks. These birds were not raised for meat, but rather for eggs. Considering how many traditional Korean dishes contain eggs, the average price of eggs sold by South Korean farmers soared 50 percent.

The latest epidemic to hit has been the African swine fever. This disease, which is harmless to humans, is nearly 100 percent fatal for pigs. And as of today, more than a million pigs have been culled recently as a result. This disease is potentially much more widespread than initially thought, as many farmers are hesitant to report cases.

If that is true, the recent outbreak is only the tip of the iceberg. This outbreak is also causing prices on Chinese pork to skyrocket, resulting in the country calling upon its “pork reserve” to help. The shortage has also caused a recent move to breed “giant pigs” to respond to the shortage.

At some farms, the pigs that are being bred are close to the size of a polar bear, which, frankly, is a frightening thought.

Final Thought

I would put climate change as the single biggest risk factor to the food supply chain. It is already causing problems in many areas when it comes to agricultural-friendly conditions. While climate change has an impact on natural disasters, they will continue to occur anyway. And the ongoing concerns of animal illnesses will continue to be top of mind for many people.

However, there is also the issue of the honeybee. Whether it is due to climate change or other factors, the ongoing threat of colony collapse will continue to impact the global food supply chain. Bees are ly the most important part of the food supply chain.

While they may not transport or warehouse any of the crops or figure out the most efficient ways to get the crops from point A to point B, they are responsible for the crops maturing and becoming food.

A continued decline in the bee population puts the world in jeopardy of a food shortage, which could be catastrophic.

Источник: https://logisticsviewpoints.com/2019/10/09/food-supply-chain-risk/

The U.S. Food Supply Chain is Under Pressure. What’s Next?

Top threats to US food supply chain

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Cautionary news articles, growing industry concern and bare supermarket shelves – from basic pantry staples to potatoes, dairy, pork and beef – are causing concern about the security of the U.S. food supply chain.

Many maintain the U.S. food supply is plentiful and safe, but manufacturers have now sounded the alarm, with Tyson Foods even taking out full page ads in national papers warning that the “food supply chain is breaking.

There’s no question that the U.S. food industry is under unprecedented pressure from a pandemic and public health crisis that threatens multiple points in the national supply chain. So, how can they best navigate through this pandemic and prepare for another wave? 

Companies that had anticipated the pandemic and its corresponding supply chain risk could have taken multiple steps that would help them during this COVID-19 crisis.

From stockpiling personal protective equipment (PPE) for employees to varying supply chains geographically, keeping raw materials in stock and revising sick policies to incentivize people to stay at home when they had been exposed – in hindsight, companies will realize much could have been done in advance. A good pandemic plan could have helped them to consolidate the number of items they would sell in a crisis and vary their supply. Proper pandemic planning can seem daunting to those without experienced providers or guidance. Today, the value of allocating resources and priority to proper planning has become abundantly clear.

Some companies were clearly better prepared than others. Food manufacturers typically run tight supply chains due to the cost benefits that accrue, but COVID-19 has forced them to make rapid and previously unheard-of adjustments. It’s not too late for any producer to prepare for what is still ahead and take proactive action.

The chain starts here

The farming industry is under severe pressure in the best of times. They are now struggling to cope with excess supplies of highly perishable goods that they are unable to get to market.

The widespread media images of farmers destroying milk, potatoes, and other crops coupled with forewarning that farmers will have to “depopulate” livestock – all while food shortages spread and hunger increases for many Americans – only heightens the national concern.

Consumers can still generally buy the food they need, if not the specific brand or cut of meat they want. Unfortunately, retailers and online sellers did not impose item limits early on, which led to consumer stockpiling that has compounded our demand issues.

It’s also ly to result in consumers creating their own personal stockpiles to see them through the lockdown, and lead to much less consumer brand loyalty due to outages. When faced with dwindling supplies, economic constraints and growing unemployment, consumers will take what they can find and what they can afford.

If they’re happy with that alternative product or brand they’re ly to stick with it when things return to normal. 

The two biggest problems facing the supply chains now are employee illnessandshortages of raw supplies. While these are certainly challenging issues, action can be taken, and it’s imperative that the industry prepare for a second, perhaps steeper, wave that could hit once social distancing rules are relaxed.

Employee shortages

Some 18 or more U.S. meat processing plants have been forced to halt production in recent weeks.

While many other industries and companies have the luxury to move their employees to remote work, the crucial employees that staff our food supply facilities must physically work on those production lines.

Similarly, retail employees who sell us our food are also on the front lines every day and risk contact with thousands of people who could transmit COVID-19.

To secure the U.S. food supply chain, protect employees and allow them to return to work, companies must be able to conduct immediate and consistent workforce testing, ensure every employee has PPE and strictly enforce social distancing mandates.

Employers throughout the supply chain will undoubtedly need to incentivize employees to not work when they are sick, and ensure the proper accommodations are made for those employees who are in high risk categories.

Employers must also factor in accommodations for those employees who have had possible exposure to the virus, accounting for extended self-quarantining periods beginning at the moment of contact.

Rethinking supply lines and raw materials

Producers and retailers typically run tight supply chains to keep expenses in line and margins tight.

But, just-in-time supply chains only work efficiently and contain costs during business as usual conditions.

This also makes it more difficult for those companies who have treated vendors commodities to feel incentivized to prioritize them when they have alternate buyers competing for their attention.

Producers and retailers who are producing non-perishable materials can proactively map out their supply chain weaknesses, attempt to identify alternative supplies and work with their existing vendors to understand how solid their supply lines are ly to remain.

Sometimes the shortage is due to geography, as some regions are more heavily impacted than others, and sometimes it’s a result of having to substitute alternative ingredients for harder-to-find ones – so flexibility will be key.

For those producing perishable materials, they will need to calculate a minimum supply of material to maintain and pin-point alternative markets.

In many cases, there’s an abundance of raw ingredients that were previously being used in commercial operations such as hotels, restaurants and schools.

Companies would do well to thoughtfully maximize these supplies according to demand, negotiating to repackage commercial supplies and ingredients for consumer sales.

Retailers also must be prepared to limit purchases of sought-after goods in the early phases, as product availability will calm consumers and prevent hoarding, which is a normal reaction to shortages.

Planning for the future

While many companies were caught off guard by the severity of the crisis and its impact on our food supply chain, those that had a proactive, tested plan were able to quickly pivot and will better weather the crisis. This pandemic will fundamentally change business operations going forward, and we all need to focus not on returning to normal, but on adjusting to a new normal that finds us better prepared for a future pandemic.

The saving grace for the meat industry may be their large stores of frozen meat.

And while it’s expensive to maintain, many manufacturers and retailers will opt to proactively increase their stores of essential ingredients, products and employee PPE so they are not caught unprepared again.

The overarching lesson this pandemic has taught all businesses is that running tight supply chains with little to no excess may be the most inexpensive way to operate day-to-day, but it will never be the way to mitigate risk. 

Without a doubt, a re-evaluation of supply chain planning to effectively weather future pandemics will require a thorough inventory of all risks to employees, customers and operations.

This is the time to be vigilant and implement strategic business resilience planning to ensure the issues we're facing today don’t multiply in the future.

Let’s hope that businesses have now come to realize that investing more on effective planning and mitigation will pay off exponentially in the long run.

Источник: https://www.foodlogistics.com/safety-security/risk-compliance/article/21135817/the-us-food-supply-chain-is-under-pressure-whats-next

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