As farmers are forced to dump food and food banks are struggling to feed millions, an explainer on U.S. food supply and distribution.
“It’s like Armageddon, but we’ll get through it,” Benjamin Walker explained over the phone in mid-March. That day, sales at Baldor—the New York-based food distribution company where Walker is the vice president of sales and marketing—had dropped by 85 percent.
With 90 percent of its business focused on food service, Baldor’s 400 trucks are typically loaded with specialty produce, meats, and baked goods bound for restaurants, hotels, schools, and stadiums in New York City, Boston, and Washington, D.C. In other words, its food goes to all of the institutions that have been shut down by the coronavirus pandemic.
“The shimmer of hope for us is the 10 percent of retail [sales we were already doing],” Walker said. “That’s really the only food channel operating at the moment, and that supply chain has been maxed out.” Over the last months, Walker and his team have been acting quickly to onboard new accounts and reroute those trucks.
As shoppers across the country have stockpiled food in anticipation of weeks or months of eating at home, there has been significant panic at the sight of empty shelves in grocery stores. Experts and food-industry groups have jumped in to assure the public, in various publications, that the American food supply was strong and those shelves do not reflect shortages. Instead, they were said to be a reflection of behind-the-scenes adjustments that need to be made by manufacturers, distributors, and retailers to keep up with where people are eating.
In the last few weeks, however, it has also become clear that the workers we rely on to harvest, process, stock, and deliver all this food are vulnerable to coronavirus—which means we will likelybegin to see gapsin the production system itself.
We’re also seeing large disparities where farmers, without their usual foodservice markets, are being forced todump milk, eggs, and produce—even while there is an urgent, unprecedentedneed at food banks. And while there areefforts underwayto address the gap between production and distribution, in between are many questions about how our food supply and distribution systems are set up—or not—to respond to disruption.
For now, what we know is that the country is in the midst of a rapid shift in terms of the kinds of foods that will get to shelves and how they get there—as well as shifts in who is available to work, how those workers are kept safe, and new restrictions on movement between countries (and sometimes, cities). With all this in mind, now is the time to understand what U.S. food distribution, under the best of circumstances, looks like.
Food Distribution 101
Farmers produce food in all 50 states, but agricultural production is concentrated in California and the Midwest. Some states have built robust local and regional food systems in which food is sold directly to residents at nearby farmers’ markets, restaurants, and CSA subscriptions, but the vast majority of food leaves farms and enters a complicated, interconnected web of transport and processing.
Andrew Novakovic, a Cornell University agricultural economist, said that the beginning of the supply chain is pretty uniform, but once food leaves the farm, “that’s where you start to get some divergence.” Some foods that are sold fresh are moved almost directly through packaging to a grocery store, while others are processed into different products.
Dairy is a good example of variability in supply chain length. The shortest is for milk, which is highly perishable. It’s bottled and pasteurized and then trucked directly to a retailer or moved quickly through a distribution center before being shipped to grocery stores or food service customers.
Cheese is a different story. That milk might be processed into mozzarella in a factory, which is then used by various companies to turn it into blocks or packages of shredded cheese. Or maybe the milk goes to a factory where it’s processed into powdered cheese, which might then be sent elsewhere to a processor making boxed macaroni and cheese, as one ingredient in the assembly line. “Every [food] has a little bit different detail, but the fundamental story is farm to processor, processing in one or multiple locations, maybe there’s storage involved, and then ultimately it gets to a food manufacturer or retailer,” Novakovic said.
Those pathways, however, are rarely simple nor linear. In 2019, a research team at the University of Illinois gathered data on how food moves between counties and then developed maps that illustrated those “food flows.” The research showed 9.5 million “links” between counties. “For example, the map shows how a shipment of corn starts at a farm in Illinois, travels to a grain elevator in Iowa before heading to a feedlot in Kansas, and then travels in [the form of] animal products to grocery stores in Chicago,” the lead researcher explained late last year.
Then there are imports and exports. According to Economic Research Service data, in 2018, U.S. agricultural imports totaled $129 billion, with more than half of that total in “horticultural products” like fruits, vegetables, nuts, and wine. While those foods were coming in, even more food was being shipped out, with exports totaling $140 billion. In 2018, Canada, China, and Mexico received the most food from the U.S.; more than 50 percent of the rice, wheat, and nuts produced here were exported.
While several decades ago, retailers were more likely to store extra inventory, in recent years, supply chains have become what many in the industry call “lean.”
“Supply chains are so efficient, they call them ‘just-in-time’ food delivery systems,” explained Robin Currey, the director of sustainable food systems at Prescott College. This is possible because retailers track buyer behavior over time and order just what they need when they need it. “The models are extraordinarily well-developed … because nobody wants to be losing money [on food waste or storage],” she said.
Before the pandemic, those models accounted for shoppers buying roughly the same portion of food they ate every week—the remainder was eaten outside the home. So, when people were told to stock up and stay home, demand spiked, and that lean system wasn’t stocked with extra inventory.
“We’re making decisions about [food] purchases today that are going to be consumed over a longer period of time,” said Michigan State University agricultural economist Aleks Schaefer during the first in a series of weekly Zoom presentations about how the coronavirus is impacting the supply chain. Schaefer said he saw current shortages at supermarkets as “short-run disruptions that over time will be ironed out.”
Coronavirus and the Supply Chain
“As the virus spreads and cases mount, and measures tighten to curb the spread of the virus, there are countless ways the food systems at all levels will be tested and strained in the coming weeks and months,” the Food and Agriculture Organization (FAO) of the United Nations declared at the end of March.
Starting at that first step in the chain, the U.S. food supply could first be affected by disruptions in farm labor. Many farms rely on workers who come from Mexico and other countries via temporary agricultural H-2A visas, and while the Trump administration is allowing workers to come in, fewer workers may make the journey, given the situation. Farmworkers are also particularly vulnerable to coronavirus, and outbreaks in the fields could occur.
In meat processing, workers in several states have already contracted COVID-19, causing groups of workers to go into quarantine; others have walked out of meatpacking plants demanding better protections.
On Monday, the CEO of Smithfield—one of nation’s largest suppliers of pork—warned that the virus was pushing the industry “perilously close” to a meat shortage.
“It is impossible to keep our grocery stores stocked if our plants are not running,” Smithfield Foods CEO Kenneth Sullivan told NPR.
So far, Novakovic doesn’t think these impacts will spread industry-wide. But he is concerned that transportation could be affected. “There’s going to be a lot of stress on the transportation system,” he said. The U.S. trucking industry was already confronting a shortage of drivers before the coronavirus. And there have been recent reports of truckers facing fears on the road, as they face shuttered truck stops and changes in demand.
Data from the food flows project also shows that the most “important” counties in terms of sending out and bringing in the most food each year are almost all in California, one of the states hardest hit by COVID-19 so far.
Tessemae’s is a Maryland-based company that makes organic salad dressings, condiments, and salad kits sold at national retailers like Target and Walmart. Co-founder and CEO Greg Vetter said he was initially concerned because the produce the company uses for its salad kits comes from Monterey County, California, which issued a “shelter in place” order starting on March 18. However, agricultural supply chains have so far been allowed to operate as usual. “Right now, we’re exempt from any of these lockdowns,” he said. “So we’re just going to keep watching this in real time.”
Movement across international borders is likely to be affected in bigger ways, and the FAO noted that it was “already seeing … challenges in terms of the logistics involving the movement of food.”
In many places where travel has been restricted in the U.S., exceptions are largely being made for important food distribution. The closing of the Canadian border, for example, does not apply to commercial traffic, which Novakovic said recognizes that “we’ve got pretty integrated supply chains going in both directions.”
At Baldor, Walker said he has started to see disruptions in imports, especially from heavily affected places like Italy and France. While there is a significant amount of imported food already stocked in the U.S., depending on when trade and production return to normal, he said, “you’re going to start to see the domestic stock of European imports vanish.”
Still, that does not necessarily translate to an overall food shortage, Novakovic emphasized. “If you can’t get Brie cheese from France or olive oil from Greece, nobody in the U.S. is going to go hungry,” he said.
And yet shifting supply chains to move food normally destined for restaurants and other institutions to retail locations is a bigger challenge than it sounds.
At Baldor, Walker said the core challenge has been quickly setting up accounts with retailers. “We’ve been trying to onboard hundreds of new customers,” he said. On the day we spoke, his drivers delivered to 150 Acme supermarkets, a chain based in New Jersey, New York, and Pennsylvania.
Other companies set up to sell to both food service and retail customers, such as Organic Valley, are taking a similar tack. The company’s structure, a cooperative of 1,800 dairy farms, means it already has a network of small, domestic producers spread out across the country. But chief revenue officer Staci Kring said in a statement that the company was working to adapt to the shift. “Where we have the flexibility, we are redirecting production from food service to retail to fill the increase in demand,” she said.
Another challenge Walker noted was that retailers have different produce preferences than restaurants. Grocery store shoppers only want about 50 popular items out of the 3,000 items Baldor usually distributes, so farmers who grow produce such as microgreens and purple garlic for chefs are likely to be more affected than onion and tomato growers.
Once distribution networks do shift more to grocery stores, labor at those stores presents a final challenge. “Some of the stock-outs and slowdowns in grocery check-out lines are because employees are staying at home and practicing social distancing,” Purdue University food and agricultural economist Jayson Lusk said in a recent blog post . “This problem is likely to grow if more people become ill. So, while we might have the food supply available, will we have the workers to get it to us?”
Trader Joe’s has already had to temporarily close stores in New York City after workers tested positive for coronavirus, although it’s one of several grocery stores that are implementing preventative measures, like reducing hours to give staff time to stock shelves while limiting exposure to customers.
“In many locations, we’ve adjusted our hours to allow our store teams time to rest a little, clean, and get new products in and on the shelves for our customers,” Kroger’s CEO Rodney McMullen said in a video posted to the national grocery chain’s coronavirus information page.
Supermarkets are also hiring more workers: Safeway, a national grocery chain, announced it has 2,000 open positions to fill, while Amazon announced it would hire an additional 100,000 workers to handle increased delivery demand (a significant portion of which is likely due to a spike in online grocery orders). Like many things, whether the companies will be able to fill those jobs at a time when social distancing is encouraged is a big unknown.
Will Food Distribution Become More Localized?
Will the disruptions to these long food chains prompt more people to buy food directly from local producers? Maybe.
“I’m in the midst of writing an op-ed right now about this being the moment for local food systems to shine,” Malone said during the Michigan State University presentation. He’s not the only one. Kathleen Finlay, president of the New York-based food and farming organization Glynwood, recently made that argument in The Boston Globe, and many articles have chronicled a rise in demand for local food.
Prescott College’s Currey said that the COVID-19 crisis has called new attention to food security, and that some of the benefits of localized food distribution are on display. For instance, relationships between farmers and customers that enable direct distribution far from crowded grocery stores. Small, direct-market farmers are also not locked into contracts with big buyers, so they can be more nimble and change what they grow and how they get food to people more quickly.
On a basic level, “the longer and the more complicated something is, the more things can go wrong,” Currey said.
But different kinds of crises can illuminate the risks and opportunities of different systems of distribution, she added. A hurricane that wipes out crops in Florida, for example, would highlight the benefit of being able to get food from far away shipped in. “Longer supply chains can enhance our resiliency when we have localized disasters,” Currey explained.
Her hope is that “increased awareness about some of the vulnerabilities in our food supply” will lead to deeper consideration of how to build domestic and regional food security, and where balancing that with imports and exports really makes sense.
In the meantime, the supply chain will continue adjusting on the fly. “I get a recap from our head of supply chain at the end of each day. It’s ‘What’s going to happen next?’” Tessemae’s Vetter said. “Every single day is something new.”