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How the Pandemic Has Disrupted Food Chains

Lori Pottinger May 18, 2020
photo - Man in Fields Harvesting Lettuce

The COVID-19 health emergency has changed what we eat and where we eat it. We talked with Dave Puglia, president and CEO of Western Growers (which represents family farms growing fresh produce) and a member of the PPIC Water Policy Center advisory council, about how these changes are affecting California’s agricultural sector.

photo - Dave Puglia

PPIC: How has the pandemic affected food supply chains?

DAVE PUGLIA: The pandemic shut down the food service sector—restaurants, schools and universities, hotels—so suddenly and completely that it just blew up supply chains. This caused many farmers to divert their produce from food service outlets to retail markets. That added more confusion to the food chain, as certain commodity prices dropped like a stone due to oversupply, while some other crops did quite well, fueled by people buying more produce that is less perishable. Foods like carrots, onions, and potatoes have been flying off the shelves.

Those first few weeks were incredibly damaging to American agriculture, and particularly the fresh produce industry. California’s desert region was in full swing for harvesting when the shutdowns began. I watched one of my members plow 350 acres of romaine lettuce into the ground. A lot of fresh produce made it to food banks—our members doubled the amount they usually ship to them—but we saw some food banks wave off perishable fresh produce, which requires adequate cold storage space and must be distributed quickly. For growers, transportation was an added cost.

We’re not out of the woods yet. The food service sector is still largely shut down. California’s coastal farms are now starting to harvest. They had to project a month ago how much crop to plant without knowing if restaurants will be open, half open, or still closed. And for those with permanent crops—table grapes, nuts, and stone fruits—their crops are coming. They’ll have to make these same tough decisions about whether it pencils out to pay for the labor, shipping, and cooling costs to harvest their crop. To put it in perspective, harvesting—which includes labor and energy—comprises about half the costs to produce, say, an acre of lettuce.

Farming has always been a risky business, but this has created an impossible guessing game for growers in fresh produce.

PPIC: What can be done to help get more farm products to emergency food programs?

DP: The top priority is to inject capital into the food system now. Ideally, the federal government would increase food purchases so we can deliver more produce to food banks and organizations that serve people in need. The CARES Act began to fund this, but the amount was small—$600 million over six months, across the whole country. That won’t buy a lot of food. The quickest way to help is to dramatically increase funding to this program.

At the state level, increasing the tax credit for food going to food banks could help. Currently, California has a 15% tax credit on the value of produce that the state’s farmers deliver to food banks. Clearly, the state needs every tax dollar it can get, but if we’re trying to keep farmers going so they can continue to grow our food and support the economy, that would be a good way to help.

PPIC: What further steps would mitigate the damage?

DP: The immediate need is for the federal government to expand its agricultural relief package in the CARES Act. The caps on the relief package were not practical for fresh produce, dairy, and cattle. Growers got $125,000 per farmer, which was appreciated—but it’s a very small amount given the losses for the higher value crops, which cost more to produce. For example, a farmer growing romaine lettuce spends about $10,000 per acre. The average-sized lettuce farm is 225 acres; the relief package covered losses for about 12.5 acres of that. Strawberries cost roughly $50,000 per acre to produce; the relief package covered just 2.5 acres of lost production on the average 55-acre farm.

The state has been helpful in crafting practical guidance for continued operation of our farms, which helped the industry implement distancing very quickly. We have a big challenge there, as these folks work and live in close quarters. It was also very helpful that the governor acted quickly on our request to help farmworkers with emergency childcare. These are mostly families where both parents work and don’t have the option of a parent staying home with the kids.

Going forward, I hope that coming out of this crisis we don’t see a raft of new regulatory costs. The cost of doing business in California is already quite high. If the cost of farming here compared to Mexico or Arizona gets much higher, it will incentivize more farmers to relocate.

PPIC: What changes to California agriculture do you envision coming out of this crisis?

DP: Farmers are amazingly adaptive people, and I’m encouraged by the many California farms that are finding new, more efficient ways of operating and producing food because of this crisis.

Will there be fewer restaurants in two years’ time, or will Americans have returned to their previous habits of eating out? No one knows. But growers will adapt to changing demand, and they’ll respond very quickly.

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