April 24, 2020
Friday by Noon:
Relief, Reopening, Reconsideration
Week six of U.S. quarantine brought continued discussion about federal relief to the agriculture and foodservice sectors. Employees infected with COVID-19 disrupted the middle part of the food supply chain, halting more meat processing and sowing confusion throughout the industry.
Earth Day typically serves as an opportunity for food brands to tout their accomplishments in sustainability, and many took a break from coronavirus to do so. This meant some positive talk about environmental stewardship and preliminary plans for reopening pushed through the negative reports on struggling businesses, which have dominated the news.
“Remember when we wrote about amazing recipes and restaurants? Good times.”Sarah Nassauer, reporter, The Wall Street Journal, (Twitter)
Relief, Reopening, Reconsideration
Various corners of the supply chain balanced calls for additional relief with eagerness to reopen. Agriculture benefited from another round of relief for lost sales while large foodservice companies faced criticism for receiving too much assistance. Meanwhile, local governments, processors and restaurant operators started considering plans for reopening.
- Late on April 17, Agriculture Secretary Sonny Perdue announced an additional $19 billion relief package for farmers and ranchers, with $16 billion to support actual losses and $3 billion to offset purchases of produce, dairy and meat lost to closed markets.
- Commodity groups, including the National Milk Processing Federation and the National Corn Growers Association expressed gratitude, but noted that the amounts fall short of actual losses.
- Forbes kept a running summary of the foodservice relief situation. When Paycheck Protection Program (PPP) relief money ran out, many small operators left empty-handed and many larger chains, such as Shake Shack and Sweetgreen, returned millions of dollars.
- Meanwhile, the National Restaurant Association shared an infographic on April 21 detailing the significant loss the foodservice industry is facing. The lobbying organization asked lawmakers to pass relief legislation to cover the $240 billion total loss.
- With meat processors like Tyson outlining a clear picture of restarting production, a re-opening of foodservice is questionable (Feedstuffs). Eater painted a grim picture of uncertain timing, masked waiters and half-empty dining rooms.
- Eager to restart the economy, Georgia Gov. Brian Kemp announced reopening of restaurants and other nonessential businesses on April 27. ABC News noted this ran counter to the advice of the Trump administration and worried owners of businesses allowed to open.
- According to Nation’s Restaurant News, McDonald’s is putting safety first when considering reopening. The company will provide face masks for all employees when its 14,000 U.S. dining rooms can reopen.
- In an Agri-Talk radio broadcast, Sen. Joni Ernst (R-Iowa) — who sits on the White House’s task force to reopen the economy — cautiously warned, “It’s gonna take a while, and patience is a virtue.”
Wednesday, April 22, marked the 50th anniversary of Earth Day. While the coronavirus crisis limited the volume of conversations for such a milestone year, the occasion still prompted an array of influential voices to speak up about environmental stewardship.
- Agriculture-aligned groups, including Cargill, Successful Farming and the USDA, used the occasion to note that “every day is Earth Day” for farmers and ranchers.
- Activist group Center for Food Safety suggested that followers grow herbs and produce at home.
- Yum! Brands highlighted how its donations reduce food waste.
- On Twitter, Maple Leaf Foods bragged about its carbon-neutral status.
- Animal Agriculture Alliance published an updated “Sustainability Impact Report,” including some incredible stats. For instance, the carbon footprint of eggs has decreased by 71% since 1960.
- Civil Eats editor Naomi Starkman shared a High Country News opinion piece by Gary Paul Nabhan that advocated for regenerative farming practices.
- PepsiCo Chief Sustainability Officer Simon Lowden wrote in a LinkedIn post: “COVID-19 has brought disruptions and pain that will be with us for years to come. But … It’s been heartening to see the global community unite and take action. … I think this action and collaboration speaks to the spirit of Earth Day — coming together as a global community to create positive change.”
Caught in the Middle
New closures at food processing plants added to growing concerns of reduced meat production and scrambled supply chains. Smithfield, Tyson and JBS announced additional shutdowns; while CPG producers announced temporary operational disruptions as well.
- The Food Environment Report Network (FERN) published a map tracking meat and food processing plant closures.
- Mainstream media outlets, such as MSN, investigated the impact of COVID-19-related illnesses among meat companies.
- Purdue University agricultural economist Jayson Lusk pointed out that pandemic-related shifts in food prices do not affect all meat equally.
- On April 20, Wall Street Journal reporters Jesse Newman and Annie Gasparro described closures at CPG facilities at ConAgra and Kraft Heinz, including a macaroni-and-cheese plant.
- Activist group Food & Water Watch accused meat companies and livestock organizations of “scaremongering” about the availability of meat, claiming cold storage inventories are plentiful.
- On April 22, Reuters shared USDA data with Rich Nelson, chief strategist for broker Allendale, showing the pork industry has 27 million pounds less supply in cold storage as a result of reduced production and predicting, “inventories could drop another 20 million to 40 million pounds in April, when inventories would normally rise about 27 million pounds.”
- Meanwhile, the United States and other major food exporting countries in the World Trade Organization, agreed to keep food and agricultural trade open to minimize disruptions to global food supply, according to Bloomberg.
- Politico’s Liz Crampton reported that USDA inspectors are increasingly falling ill as well, which will further limit plant operations. The inspectors’ union, American Federation of Government Employees, called protective gear inadequate.
“When we reopen, people are going to be afraid to go back to work. So what are you going to do to ensure to the workers that the work site is safe?”Rep. Debbie Dingell (D-Mich.) (The Wall Street Journal)
Some important points of view worth checking out this weekend.
Ratty Supply Chains
On April 21, Chicago Tribune reported that even urban rats’ food supply chains have been disrupted by the coronavirus. Because of restaurant (and restaurant dumpster) closures, rats in cities like Chicago and New Orleans are breaking from traditional eating habits and searching for food in the open, during daylight hours. Unsettling.
In an April 16 earnings call, Barry Callebaut CEO Antoine Bernard de Saint-Affrique, addressed the negative, but unpredictable, effect the coronavirus will have on the gourmet chocolate market. Food Business News reported that, while production for the chocolate leader is down, online sales in bellwether market China have increased. Bernard de Saint-Affrique maintained a positive spirit saying, “We contribute every day to keep the food chain going, and this gives all of us all the energy in the world.”
VC Tap Still Running
Christoper Doering of Food Dive captured the current situation over funding for food startups. In light of the coronavirus crisis, the author suggested that investors are cash-flush and “are even more focused on companies with strong growth, in-demand products like plant-based or clean label, and what channels the businesses are targeting, such as selling straight to a supermarket or direct-to-consumer.”
Disagreement in a Can
In an April 21 Wall Street Journal article, freelance food reporter Jane Black, in a coronavirus-inspired pantry-check, made the case for canned salmon over canned tuna. Black explained “the beauty of canned salmon,” citing metrics like mercury levels, omega-3 fatty acids, sourcing concerns and taste. However — and consider this a comment from the editor — the tinned sardine is the superior choice.
Chipotle’s week turned into a bit of a rollercoaster ride as the chain announced rising online orders, but falling sales. Oh, and the U.S. Department of Justice fined the chain $25 million for repeated food safety issues between 2015 and 2018. Food safety attorney Bill Marler examined legal precedents, noting that Jimmy John’s has been responsible for nine outbreaks since 2008 compared with Chipotle’s five. He pondered, “Why whack Chipotle and not Jimmy John’s?”
Ian Lecklitner from MEL sets the record straight on mac and cheese in “A Gooey and Delicious History of Mac and Cheese, a Meal Once Fit for a King.”
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