Farm to table, the US has the most productive food supply chain in the world. However, as our relationship to the source of our food has shifted, it has driven an increase in misinformation and fear.
The US produces more than 4,000 cal worth of food per person, per day. But, the USDA estimates that 37.5% (1,500 cal) of that production goes to waste.
There are three issues that contribute to food fear in the US:
- Consumption habits
- Distribution of demand for US ag products
The US leads the world in agriculture innovation – from more efficient equipment to precision agronomy to scientific breakthroughs, the average farm in the US leverages more high-tech each year.
Based on the relative amount of inputs per acre (seed, chem, fertilizer, fuel, land, and labor), the US has remained static since 1948, but with better practices, equipment, and technology, output has tripled.
Yield is higher, but overall, fewer families are farming than ever.
US farms peaked in 1935 at 6.8 million against a total US pop of 127.3 million. A huge percentage of the US was involved in AG in some way.
By 2017, there were only 2.05 million farms to feed 325.7 million people. The US is producing more food than ever, with fewer growers than ever.
The type of grower has shifted as well. Farming is still a family business, but the trend is towards much larger, corporate-style farms.
And at this point, the trends are likely irreversible.
When corn prices decoupled from reality in 2006 thanks to an explosion in demand for ethanol, it started an upswing in market, input, and land prices. Everything got more expensive, even as crop prices came back down.
Likewise, the US enjoyed a strong uptick in exports of not just the crops themselves, but co-products of refining such as DDGS and soybean meal (SBM). These became cheap, high-demand protein sources for Asia to feed their growing poultry flocks and herds of swine and beef.
At the end of 2013, China decided to address its own food insecurity. China’s enormous population demands massive amounts of protein. Separate from the US staple crops of grains and soy, the news is no better for the livestock, produce, and dairy sectors. The major distinction is that the primary markets for corn and soy are processors who convert them into food ingredients, biofuel, or animal feed.
The supply chains for these are fairly static. Grains and soy tend to move in bulk once or twice, then be turned into a new product.
X qty to become animal feed.
X qty to become food ingredients.
X qty to become biofuels.
They are less unstable.
The other products are more sensitive to demand disruptions (such as economic slowdown or COVID-19) because they are much closer to the consumer’s table. Meat is butchered and sold. Dairy is processed once, then sold. Produce is processed not at all, or once, then sold.
Thus, US consumer behavior is closely tied to these more-sensitive food items. So too are the supply chains to move these products from farm to table more specialized. Produce must be segregated by quality. Liquids move in expensive tankers. Meat must stay cold.
If restaurants and schools have reduced consumption, they’re buying less from suppliers, who buy less at the farm level. Hence the stories we’re now seeing about massive spoilage on-farm. The risk has been transferred from the end of the supply chain to the front of it.
Another disruption is that of transport capacity, especially for perishable items. Refrigerated trucks (“reefers”) carry much of the dry/packaged goods, and specialty tankers carry bulk liquids like milk. Change in demand increases prices and dislocates assets.
The more specialized the transport, the less capacity can “flex”. A regular dry van trailer can move nearly any cargo. A tanker can only move a few products. The assets depend on reliable volumes. Carriers who can’t make money will change trailers and carry something else.
An issue affecting meat is the stoppage of in-person livestock auctions, where a good portion of business occurs in that sector. Reduction in meatpacking capacity is also an issue.
However, these are temporary issues – unless the economy stays shut down.
For people newly facing food insecurity, it’s more a result of less money to buy food because of reduced (or eliminated) income. For farmers, it’s an emergent revenue crisis that is doubly galling after seeing $6 trillion go to a variety of political interests.
Farms are hardest-hit right now, even as shelves remain mostly full. A continued slowdown during planting season will have a long-term impact for the rest of the year, even if the economy recovers somewhat.
Farmers are beginning their spring crop cycle in the greatest economic uncertainty most have ever faced. The USDA needs to take all measures to financially protect producers for the ’20-21 marketing cycle, especially with robust direct payments at the farm level. Second, waive all hours of service and weight limit restrictions for drivers carrying food or food-adjacent goods (packaging, for example).
Price caps on inputs and taxes, as well as subsidies for freight payors moving food products, need to be instituted.
We also need to institute some form of national food stockpile program under the guidance of a National Quartermaster.
An effort to replace missing migrant workers on-farm with paid prison laborers – qualified by good behavior and nature of the offense should be looked at.
The fact is that whatever happens with COVID-19, the most essential link in our food supply chain is already being crushed, especially after years of struggle. Our future depends on saving our farms.