The Impact of COVID-19 on Food & Ag Landscapes

FLM Harvest

FLM Harvest is grateful to have a talented board of advisors filled with industry veterans who provide strategic input to our agency and client work. They offer their distinct perspectives on how COVID-19 is rapidly changing food production.

As COVID-19 paralyzes the country, one thing is clear: U.S. farmers and food producers are essential to families and businesses, not only in the U.S but across the globe. The FLM Harvest Board of Advisors were asked to provide their point of view as farmers, agribusiness and food producers are ramping up efforts to keep the supply chain stable and the grocery stores filled.

“At Black Gold Farms, we’ve re-engineered our sanitation and food safety procedures to try to prevent issues. Food safety and traceability are always front-burner issues for us,” said Gregg Halverson, former president/CEO.

This focus on food safety will be key to growing business and strengthening consumer trust once restrictive measures from the pandemic fade.

“The future belongs to those who can incorporate a sense of safety and confidence into their brand,” said Jeff Nawn, global trade expert and founder of the North Hill Group. “Make sure that whatever message your business sends out to the market is given in the context of food safety and security.”

Nawn also explained that, while the health responses to COVID19 are critical, an underestimated consequence of the pandemic is international trade and the global economy.

“The true economic consequences of this event are not yet understood and certainly haven’t been priced into the market,” explained Nawn. “Many people and businesses are operating under an assumption that we will return to normal life in a few short weeks or months. Not only will COVID-19 continue to be an issue over the next year, but the economic consequences of this event will have a long tail that will impact nearly every aspect of our lives.”

This includes potential delays in regulatory reviews of new  crop protection, biotech and gene edited products in key foreign markets.  Nawn also expressed concern that some countries would use the pandemic to impose protectionist ag trade policies, particularly phytosanitary measures, to support local growers.

A NEW ECONOMY LEADERS MUST CHART

Bill Boehm, former senior vice president at Kroger, agrees that the fallout from this pandemic is unlike anything the U.S. has experienced since World War II.

“Unlike other recessions, a stimulus package won’t necessarily allow people to spend. Only an abatement of the virus will do that,” said Boehm. “We were not prepared for this, living on a bubble with a trillion-dollar deficit in one of the strongest economies of the post-World War II era. Now we face the equivalent of war debt that can’t be repaid without most Americans experiencing significant and long-term economic impacts.”

So what’s next? There’s no doubt navigating these uncharted waters will be difficult across all industries, but leaders within food and ag have opportunities to chart the course by adjusting production to meet new demands, limiting supply chain disruptions and managing a labor shortage.

“Volumes have spiked in both flour milling and baking,” explained Randy Marten, owner and principal of Food Ingredient Advisors. “There is excess capacity in milling, but the bread and bun industry is essentially running 24/7 to meet demand from grocers. For food companies, the short-term focus should be making sure the inbound supply chain and outbound distribution systems remain intact.”

The same is true on farms where access to crop inputs, animal feed and veterinary care are essential for operation.

“Inputs are time sensitive, so availability and movement are critical,” explained Danita Rodibaugh, farmer and former U.S. Meat Export Federation chair. “It’s important to ensure seed, fertilizer and chemicals can be transported to distribution points for farmers. “On the animal side, we cannot have feed, vet supply and processing plant disruptions in a ‘live animal’ business.”

The most challenging task ahead may be balancing employee health risk with the need for labor in order to keep the supply chain moving.

“Businesses may need to take unconventional actions with labor such as hiring healthy but laid-off service employees to do tasks on farms, in plants, retail outlets and distribution centers. This will require a plan and training programs,” said Boehm.

ALIGNING MESSAGES INDUSTRY-WIDE

Marianne Smith Edge, nutrition expert and founder of AgriNutrition Edge, noted that, in addition to navigating these issues, industry leaders must align to deliver consistent and transparent messages about the nation’s food supply,

“There is a lack of knowledge about the connectivity of the food supply chain, so the most important thing we can do in the immediate future is sing from the same page when answering people’s questions about processes, employee health and opportunities to improve,” she said. “When addressing the need for economic assistance, it’s crucial for the agricultural community to communicate how economic support for ag production contributes to maintaining an affordable and accessible food supply for consumers.”

LOOK INWARD TO REFINE

This disruption to business as usual also offers a silver lining as leaders take a step back and evaluate current practices. According to David Parker, FLMH executive vice president and strategic planning expert, now is the time to work on adjusting strategies to meet the demands of a new normal.

“We need to remember that this too shall pass. Now is the time to retool, organize and streamline. Frankly, it’s time to spend more time on your business, rather than in your business,” said Parker.

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