Slate of speakers discuss food system breakdown, solutions

Former secretaries of agriculture Dan Glickman and Ann Veneman along with current secretary of agriculture Sonny Perdue joined leaders of several food production and delivery system leaders May 12 for a virtual Food Summit hosted by the Bipartisan Policy Center.

According to the BPC, there hasn’t been a time in the United States that the country has witnessed Americans struggling to feed their families while farmers at the same time dump milk, euthanize their livestock, and plow under their produce. The coronavirus pandemic has brought attention to the countries complex and delicate food supply chain.

Sec. Sonny Perdue said he, like many Americans, wasn’t really aware of the complexity of the food chain. There is a “very dual-track parallel production in processing and logistics or delivery systems that we have in the United States of America.”

“Most people think about food really coming from the grocery store, but with the food supply chain we’ve had to broaden that expectation of understanding exactly what has happened here in America,” Perdue said.

Before the pandemic more than 50% of the foods being consumed were being consumed out of the home.

“We had a production scheme—a very efficient, synchronized, integrated, sophisticated delivery system, both for the production and the processing and the logistics and the delivery to the different sectors,” Perdue said. “One being institutional setting—restaurants and other congregate feeding areas—and one being to the consumer through retail. Mostly grocery chains in that way.”

And within an instant that 50% stopped suddenly. Perdue said it’s much like an accident on a major interstate bottlenecking traffic. He gets questioned why they didn’t anticipate something like this happening and plan for a detour.

“The fact is, no one could have anticipated the issues that we have in the food supply chain, and the degree to which we were segregated in our production process,” Perdue said. “It’s USDA’s role to be flexible and to move very quickly in these realigning these dislocations and misalignments that we had in the supply chain.”

And then the schools closed, creating an even bigger problem. Many school children receive meals at school, and there were regulatory hurdles to overcome almost immediately. Rules and regulations are in place to preserve the integrity of the processes involved with school meals.

Communities stepped up and reached out to get kids fed through a variety of programs. Many businesses in the private sector did the same thing. USDA also ramped up the SNAP program and worked to fix EBT problems. They also rolled out a food box program on May 15.

“It is really disheartening to all of us in agriculture when a farmer or producer puts their blood sweat and tears into growing animals or vegetables or produce or milk and having to destroy that milk or dairy, produce or meat because it’s the misalignment of not getting that protein where it needs to be,” Perdue said.

Perdue is proud of the work being done on the $3 billion food box program, which is up and running with contracts in place over local and regional distributors. USDA is also working with Feeding America getting food to those citizens who have never had to use a food bank before. Most importantly, Perdue is proud of the work his department is doing overall as well as farmers, processors, packers, truckers and grocery stores.

Perdue said the most efficient, sophisticated, synchronized food supply chain in the world has remained nimble. Nimble enough to supply people with the confidence that there will be enough food.

Food panelists

Following Perdue, Glickman and Veneman helped host a panel discussion, which included American Farm Bureau Federation President Zippy Duvall; Julie Anna Potts, president and CEO of the North American Meat Institute; Leslie Sarason, president and CEO of Food Marketing Institute and Katie Fitzgerald, EVP and COO of Feeding America.

Duvall focused on the production aspect of agriculture, and touched on a few of the hot spots from the past few weeks. Looking back, agriculture has been in a “perfect storm” for the past seven or eight years with a declining economy, while other industries have been booming. Ag is at about 50% of their income, Duvall said.

“We’re also having a difficult time with this last ingredient of the perfect storm,” he said. “After all the natural disasters and everything that we’ve experienced in the trade war, we’re very appreciative of the assistance that the secretary and the president has brought to agriculture in the last two years and we look forward to continuing to work with them.”

Following the perfect storm, there’s been an increase in the last 12 months ending March 20, an increase in the number of bankruptcies—627, Duvall said.

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“We’re very, very concerned about the ability of our farmers to be able to repay debt, and the flexibility that financial markets are going to allow for our farmers going into the future,” he said. “To be able to get operating loans to plant future crops.”

The major player in how farmers and ranchers survive their current financial position depends on how the CARES Act plays out. Duvall praised the president’s signing of it, and all the work Perdue and his employees put into it.

“What comes in that package is going to really determine how our farmers can hold on to their futures,” Duvall said.

One of the things really hindering agriculture is the problems with getting animal proteins harvested, but also issues with dairy, poultry and pork processing. Fruits and vegetables aren’t immune either.

Duvall believes the new normal will end up shaping agriculture in the future.

When the pipeline for animal harvest gets full or when there’s a glitch in the processing pipeline, the system backs up. This costs the farmers and ranchers funneling their products into the pipeline millions of dollars.

Besides the processing plants, the pandemic has hindered the corn and ethanol systems in the country.

“The ethanol plants have continued to close down and ethanol is a big part of rural America,” Duvall said. “It is a big part of what rural America did to help our country become energy sufficient. We’ve been able to not depend on the rest of the world for our energy, and corn in rural America played a major role in getting us to that position.”

And of course Duvall is concerned about the Phase One trade deal.

“All of our agricultural commodities need very badly the Phase One $40 billion worth of purchases,” he said. “The Chinese promise to exercise this year, we need that to happen. It would help strengthen commodity prices and help our farmers get through this.”

Meat Institute

Potts said she’s focused on the poultry and meat processing aspects of the agricultural industry, and the challenges faced as well as moving forward. She sees the packing plants as turning a corner and moving forward—getting back to full capacity. The North American Meat Institute began preparing back in February when it was clear there was going to be some sort of pandemic. They began meeting weekly to share best practices through trade associations.

Many plants added additional sanitation, extra communications about how to work within the plant and stay under within PPE, communications about being with people who were sick outside the plant, and screening questions.

“We have seen just a tremendous amount of COVID that has happened within the workforce of our processing plants,” Potts said. “We were in more or less constant communication with USDA, with OSHA and with the CDC on getting some additional guidance on how to deal with the situation as local health authorities and other health authorities took different approaches, as things began to come up in their communities.”

Plants faced increased absenteeism due fear of the disease, and Potts said the processing of meat continues to be a very labor-intensive activity.

While safety is always a top priority for these companies, it became especially important during the pandemic. Slowing the lines and processing have created the backlog of animals Duvall mentioned.

“That had become a critical, critical problem,” she said. “A couple of weeks ago—the White House, USDA and other agencies stepped up to address in a quite an extraordinary way. We believe that we are maybe the first industry outside of defense that has been the subject of defense production act order or executive order.”

Potts said that was a sign that there needed to be federal involvement in getting the plants back up to speed because it was so critical to the food supply.

“We’re looking at all of the challenges that we have going forward in getting our food service back up and running, but our first priority is the safety of our workers, and then to get our plants back up to speed 100% so we can process the backlog of animals that we have out there in the heartland,” she said.

Food Marketing Institute

Sarason covered the retail side of the picture and she said the retail sector has seen the supply chain squeeze. Extraordinary demand at a time supply was being tested is something she’s never seen before.

“It’s just been almost overwhelming,” Sarason said. “What we’ve seen is that our industry suppliers have responded with SKU alignments with distribution pacing. We’ve also realigned the supply—products that would normally have been destined for the food service sector. We’ve worked very hard to figure out how to repurpose those and move them into the retail area.”

FMI created a partnership early on with food service distributors to redirect some of the food service products to the retail sector.

It’s also been an “unprecedented test” to the online capacity of grocers and retailers. FMI was seeing a gently sloped, upward trend to online grocery shopping and overnight it became more of a rock climb.

“I think for us as an industry, as we had doubling and, in some cases, tripling of the demand for home delivery, store pickup, and all of these changes have clearly challenged us both taxing the technical and technology capacity of our member companies stores online ordering systems as well as the physical pickup and delivery capabilities for the industry,” she said.

Sarason has also been focused on the unparalleled safety requirements of retailers.

She sees it as yet another way retailers and grocers have demonstrated how essential food retail and food distribution is during any disaster situation.

“Our industry responded with the safety requirements like limitations at the store, both on the numbers of people in some cases who could enter the store at the same time,” Sarason said. “As well as in some cases the numbers of products that people could buy in various categories.”

Retailers have done specific in-store social distancing protocols to show how far six feet really is when standing in the checkout lines; some have doubled down on cleaning and sanitizing protocols; some have created special hours for special needs customers; established new precedence and customer service and employee safety with sneeze guards, masks and wipes.

The mettle of the workforce has been tested, according to Sarason.

The demand for labor is something stores have clearly recognized and FMI has worked closely with them to work on hiring “literally hundreds of thousands of new employees” since the pandemic began.

“We created an online talent exchange, to help allow our customers, our companies who have employees who are not being deployed currently to know about openings that are happening in the food distribution system and create that match so that those individuals can find positions,” Sarason said. “And our companies can be can be staffed appropriately.”

Sarason said FMI and other groups have done critical work with USDA and other agencies at both the federal, state and local levels.

“These unprecedented times have put the supply chain to the test, and we’ve had some hits and we’ve suffered some cuts and bruises along the way,” she said. “But I think we’ve proven that our system is incredibly resilient and stronger than ever and we look forward to continuing to demonstrate the importance of this industry and what we are capable of as an industry.”

Feeding America

Feeding America’s Fitzgerald praised the people who are showing up at the 200 food banks and some 60,000 agencies that are part of their network.

“Many folks don’t realize that during the course of an average year that charitable food system and the Feeding America network of food banks and agencies depends on 2 million volunteers,” she said. “Also every day, Americans are coming out, even in the midst of this pandemic to show up and to make sure that their neighbors and former coworkers and others have the food they need to nourish their families.”

Fitzgerald has found it humbling, as have the people needing the help.

“If you have not had to serve food to someone who has never had to ask for that help, people come to that experience with a great deal of shame and embarrassment,” Fitzgerald said.

Fitzgerald and Feeding America have tried to communicate to people across the country that events like the pandemic is why systems like this one exists. The same goes with the “tremendous public and private partnerships with the food industry and government.”

Fitzgerald touched on the incredible surge in demand, and how they have been surveying member food banks every two weeks since this began.

“We have consistently gotten data that shows us that on average food banks are experiencing a 70% increase in the number of people who are seeking food assistance across communities throughout this country,” she said. “And we serve every community in every county in the country.”

Fitzgerald’s best guess right now is based on their six-month impact analysis, which tells them an estimated 17 million more Americans could experience food insecurity as a result of the pandemic.

“That’s a 46% increase above the 37 million Americans who were estimated to be food insecure prior to COVID-19,” she said. “And of that 54 million, 18 million are children. So, we have a tremendous challenge on our hands and we’re going to continue to need the vital support of the federal government as we move forward.”

Fitzgerald expects the demand for food banks to continue for some time. She sees help through the Coronavirus Food Assistance Program Farmers to Families box program as well as waivers, other flexibilities and increases to the SNAP program as something that’s needed.

Kylene Scott can be reached at 620-227-1804 or [email protected].