Food chain works to stabilize itself amid pandemic
By Christine Souza, California Farm Bureau Federation
May 13, 2020
As some businesses are allowed to reopen under conditions intended to protect people from COVID-19, people in the food supply business say they've seen some market stabilization but expect continued volatile conditions in coming months.
San Luis Obispo County County farmer Tom Ikeda, who grows leaf lettuces, cabbages and other vegetables for food service and retail, said the market for produce appears to be stabilizing—somewhat. Commodities doing well, he said, include the "more durable items, such as cabbages and kale; tender items like lettuces don't seem to be doing that well."
"It's been very difficult because it's an ever-changing environment," Ikeda said. "Things have stabilized in the last few weeks. I wouldn't say it is predictable, but it's more predictable than it was."
"It hasn't been a good spring," he said. "Lettuce markets are terrible, prices are terrible, movement is not good and a lot of it is because much of it goes to food service and demand went down significantly—but on the retail side, demand didn't go up."
Constantly evaluating the market, Ikeda said he reduced plantings of certain varieties of lettuce, because sales of those tender commodities have been sluggish due mainly to the constriction of the food service sector.
Tim York, president of Salinas-based Markon Cooperative, which supplies fresh produce to food service, said he expects a slow recovery of the food supply system, but indications are that the market is starting to stabilize.
"We are beginning to see some light at the end of the tunnel," York said. "Certainly, our numbers reflect that: We are well over 50% of normal (sales) volume this week, which we think is a great sign. We were in the 40s last week and the 30s the week before, so we definitely see a positive trend."
Salinas growers of mainstream vegetable crops are planting the usual production for June, York said, but he expects to see adjusted plantings the remainder of the year.
"Growers were coming to us saying, 'What do you think your needs are going to be come July, August, September?' Well, we're all shooting in the dark; nobody knows," York said. "We were telling growers we think 55 to 60% of normal, but that is just a flat-out guess. We hope it would be 80% of normal. If growers aren't planted for that, they stand to have very high markets, but we also stand to not have products that customers are looking for, so it's a two-edged sword."
Times are especially tough for growers of specialty produce such as microgreens and heirloom carrots grown for high-end restaurants, he said, because many of those products don't necessarily translate well at retail.
Before the pandemic hit, Kara Strauss, owner of Bloom Microgreens in Los Osos, which grows microgreens sold to Central Coast chefs, said she planned to exit the business, selling her company to an interested buyer with the deal set to close April 1.
"I was in the process of selling the company and due to the statewide shutdown, the sale was put on an indefinite hold; I'm not sure of the fate as we wait to see how the slow reopening goes," Strauss said. "I know the restaurant market will change and be affected greatly by this for some time to come."
The meat business has also been disrupted, with some packing plants closing or slowing operations after employees tested positive for COVID-19.
Ben Higgins, director of agricultural operations for Hearst Corp. in San Simeon, said beef producers that sell to restaurants or food service are not faring as well as those supplying grocery stores and retailers.
Heavily reliant on processors, packers, truckers and cold storage facilities to assist in bringing beef products to market, Higgins said the company has engaged in discussions with its packers regarding contingency plans. Hearst Corp. supplies grass-fed beef to Whole Foods Market for sales throughout Southern California, and Higgins said the ranch will start shipping next week in time for Memorial Day, the kickoff of the summer grilling season.
"Consumer demand at the retail level is extremely strong, so this has caused a certain amount of anxiety for us as we look to secure our position with the (California) packer that we work with in order to make sure that these finished animals are going to be able to make it to the retail beef case," he said. "We're cautiously optimistic that this shipping season will be relatively trouble-free."
With a growing demand for home food delivery, Higgins said he expects the company's subscription-based meat supply service will be expanded.
Throughout the food supply chain, people are preparing for changes in consumer behavior, such as making fewer trips to the grocery store, more direct-to-consumer purchases and curbside pickup, and whether people feel comfortable dining in a restaurant.
"If they weren't trying to take out before, they may be trying takeout or delivery now," York said.
Sacramento chef Oliver Ridgeway of Camden Spit & Larder, which specializes in California ingredients, said for now, the business model has changed at his restaurant, doing curbside pickup and more family-style meals. He is also making meals for low-income people through a city-funded program.
"A lot of us are forward planning what that reopening could be: spaced seating or a minimum capacity," Ridgeway said.
With a large patio area, he said he feels the outdoor space could compensate for reduced seating inside the restaurant.
"There's so many unique local farms here that still want our business, and I think we will get through this hump and hopefully put on our plate what we've always put on, which is great, seasonal, fresh, locally grown vegetables," Ridgeway said. "Chefs are very good at adapting and this has definitely been a big learning curve. But if anything, I'm assuming we're just not going to go back to full throttle."
