The coronavirus has sent the markets into a tailspin, closed down schools, emptied large sections of grocery stores and turned restaurants into to-go stands. But so far, agriculture’s intricate supply chain is — for the most part — still turning.
Truckers are still trucking, planters are still planting, and processors are still processing. But no one is willing to place any bets on how long the sense of continuity will last. Many are concerned about looming problems that the supply chain will face if additional emergency steps are not taken.
There are not any current issues in the supply chain for members of United Fresh, which represents the entire produce supply chain, says the group’s Senior Vice President Robert Guenther. “The major issues now are food distributors who service restaurants and bars. There are a limited number of options for where product can be diverted.”
National Council of Farmer Cooperatives President and CEO Chuck Conner tells Agri-Pulse his group is hearing concerns about the availability of farmworkers later this year. Key cogs in the H-2A visa system — given to temporary workers employed in agriculture — have been slowed or stopped altogether due to teleworking or closure of consulates that typically conduct interviews to screen visa candidates.
“If you take away our workers and our ability to transport and move product over the next few weeks, then you might as well take out our entire year,” Conner said. “When you explain it in that way, there aren’t very many people who don’t recognize that we need to get food planted here in this country in 2020 in order to sustain ourselves.”
Conner said NCFC is seeking interview waivers for previous recipients of visas — a new interview must be conducted every year — which he said would speed the process for a “substantial percentage” of applicants who are repeat workers.
Ag Secretary Sonny Perdue held a conference call with agribusiness leaders Tuesday afternoon to discuss the issue. A USDA spokesperson said the department is “directly engaged with the State Department and working diligently to ensure minimal disruption in H-2A visa applications during these uncertain times. This administration is doing everything possible to maintain continuity of this critically important program.”
Chuck Conner, NCFC
Conner says NCFC is further concerned about the potential for more stringent quarantine measures that could hit during planting season for many different crops over the next few months. But for those already in the fields, he said he’s not hearing any concerns about seed and other inputs getting to producers.
Rod Wells, executive director, enterprise supply chain, for GROWMARK, told Agri-Pulse it’s “business as usual” for the company’s distribution centers. He said most of the company’s seed corn, for instance, has already been positioned. But if the virus hits the company’s workforce — or containment measures take their workers out of commission — he said the continued flow of product will suffer.
“Our facilities are not extremely automated facilities like you might see with a lot of robotics, so it’s still a guy or a gal on a forklift picking products, putting products on trucks, so the human element in all of this is the big wild card, and the one that would impact us probably most severely,” he said.
CHS President and CEO Jay Debertin posted a message to customers and CHS owners on Monday saying the company is “adjusting workflows as needed to ensure we can continue to provide the products and services you need.”
Interested in more coverage and insights? Receive a free month of Agri-Pulse or Agri-Pulse West by clicking here.
While row crops and other goods are concerned about adequate planting infrastructure, the protein sector is trying to address harvesting concerns as the virus lingers.
“It’s the fluid nature of the situation and not knowing what may or may not happen,” Colin Woodall, CEO of the National Cattlemen’s Beef Association, said in an interview with Agri-Pulse. “I think everybody’s going into this with one idea, but the experience — as we see the virus spread — could be something much different, and I think it’s hard to speculate on what that looks like.”
NCBA and the U.S. Cattlemen’s Association, a separate beef industry producer group, have both individually been in contact with Department of Agriculture officials about beef packing plant operations as the virus spreads across the country.
So far, beef packers and USDA inspectors — without which facilities are not allowed to operate — have pledged to stay on the job. On Monday, Mindy Brashears and Greg Ibach, USDA’s food safety and marketing and regulatory heads, respectively, issued a joint statement assuring the industry “that the agencies are committed to ensuring the health and safety of our employees while still providing the timely delivery of the services to maintain the movement of America’s food supply from farm to fork.”
"These agencies are prepared to utilize their authority and all administrative means and flexibilities to address staffing considerations," the statement added.
Colin Woodall, NCBA
A USDA spokesperson confirmed to Agri-Pulse that the department is “not aware of any reports at this time” of food safety concerns stemming from the virus.
Last year, the beef industry got a preview of what happens when its production capacity takes a hit, when a fire at a Kansas beef plant took the facility out of commission for several months. USDA launched an investigation into the pricing practices that followed, and Woodall said the department is “watching this very closely” to ensure the market disruption does not become a profit-taking opportunity.
The National Pork Producers Council has also sounded the alarm about the concern of labor shortages in processing facilities. Last week, the organization sent a letter to administration officials outlining their concerns about what’s at stake if animals are unable to be harvested.
“It would result in severe economic fallout in rural communities and a major animal welfare challenge,” NPPC President Howard “A.V.” Roth said.
Aside from challenges in moving and producing raw commodities, machinery and other inputs are feeling the pinch of the virus as well.
March is a normally a busy time of year for Darrin Addison of Addison Irrigation and Center Pivot Parts, who sells irrigation parts to farmers in southwest Kansas. But the outbreak is causing supply chain disruptions.
“I’ve talked to two of my overseas friends that are in the manufacturing business and they’re having problems with labor. They’re not coming to work now because they’re scared about getting sick,” Addison said.
Addison said he is even hearing about container ships being quarantined out at sea.
“Container ships which are hauling our products and products for a lot of people here in the U.S. are not able to come in port,” he said.
Of the ships that have ported, he said agents are quarantining the parts to make sure they do not have the virus.
Addison, who said roughly “90 percent” of his irrigation parts come from overseas, feels the disruption is not just going to be irrigation parts but all farm parts.
“Tractors, planters, you name it, I’m thinking we’re going to see a shortage before this season is over,” he noted. The disruption comes at a bad time, as farmers are maintaining machinery and irrigation equipment before spring planting and summer crop maintenance.
In grocery stores, a representative of packaged foods and goods from Coca-Cola to Clorox said the organization’s number-one priority right now is keeping the supply chain open to consumers.
“Keeping basic materials that are used to make our products moving, and we’re focused on both the state and international level,” Bryan Zumwalt, executive director of public affairs at the Consumer Brands Association, told Agri-Pulse.
He said recently CBA has partnered with the State Department to track international goods. Zumwalt said the organization has not seen immediate “outright disruptions but issues of concern” as products begin to enter the U.S. from overseas.
He said countries like India, China, and Germany are starting to put export bans on certain products.
“We don’t want to see those things progress in a meaningful way that would undermine our supply chain,” Zumwalt said. At this stage, he said retailers are not concerned about domestic supply chains.
Zumwalt noted CBA has also asked to be exempted from gathering size limitations to allow for the continued movement of products and to minimize hoarding at grocery stores and supermarkets.
“You’re in a situation now where consumers are buying three to five months of supplies and there is not a level of concern to justify that purchasing,” he said.
For more news, go to www.Agri-Pulse.com.
