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The spread of the coronavirus is shining a spotlight on the weakest links in the global food supply chain. This could have long-term implications on how we feed ourselves. Most dramatically, some people are facing a heightened risk of famine. The UN’s World Food Programme (WFP) warned in a new report that “we could be facing multiple famines of biblical proportions within a short few months,” because of the virus. The head of the WFP remained optimistic, however, saying this could be avoided by acting quickly and wisely. 

The alarming number of Covid-19 cases in US meat packing plants is also highlighting what labour unions are calling long-standing problems in the sector, like worker exploitation. A BBC piece analysed the case of the huge Smithfield meat plant in South Dakota – responsible for 4-5% of the total pork production in the country – which was forced to close after 644 employees contracted the disease. Efforts by the USDA to stabilise the food supply only made things worse. It removed speed limits on a lot of meat plants, forcing employees to work closer together, heightening the contamination risk which could then force the whole plant to close. 

Labour unions see a silver lining, however, as the whole country turns its attention to the previously ignored but essential role of the food worker. For one, companies are accelerating efforts to protect employees. A food union recently announced that JBS agreed to increase wages and reinforce safety precautions. Nevertheless, some argue that companies are offering too little too late – around 12 meat plants in North America are reportedly closed or idled. The situation is similar in Canada where Cargill agreed to slow production to protect employees at an Alberta plant but only after dozens of employees caught the disease. 

These meat packing plants are often located in Midwestern states where the quarantine orders are the weakest. Many Governors of the so-called Corn Belt have refused to issue stay-at-home orders but local officials warn that infection numbers are starting to soar. Despite a growing concern, the head of the USDA reassured that the meat and dairy supply was so far not affected. He added that the agency will support the sector by buying and stocking products. 

For the most part, governments around the world are working hard to make sure the poorest are still able to buy enough food and medicine. However, the informal sector has also been stepping in to help. In Italy, well-known mafia members have been seen distributing food parcels, while armed narco-traffickers in Mexico were traveling across the country to supply the poorest households with food. Some recognised the daughter of El Chapo handing out packages advertising her company “El Chapo 701”. In response, the Mexican President urged the groups to focus on reducing violence instead. 

In Croatia, the government is urging the young and unemployed to consider working in the agricultural sector to help address a labour shortage. The crisis helped “enhance” the importance of the sector, a minister said. The Austrian agriculture minister, meanwhile, asked consumers to help support the livelihoods of local farmers by buying more goods produced in their regions. She also encouraged supermarkets to offer discounts on local products. In the same vein, the British Nature Friendly Farming Network (NFFN) urged people to buy more locally and sustainably produced goods, and to consider working or volunteering on a farm. 

Changing consumer habits are helping rural grocery stores in the US which witnessed a surge in interest as people try to avoid crowded supermarkets. Nevertheless, grocers are worried that the trend will not last, as experts predict that online retailers will benefit the most. Online sales have been a lifesaver for many small coffee shops, although that might not be enough to stop many shops from closing. The Counter even wonders whether “Starbucks will be the last one standing”. Independent coffee operations remain hopeful, however, noting that the 1918 Spanish Flu was followed by the Roaring Twenties, a “transformative” time for coffee. 

Another sign that food is gaining in visibility is that Americans are using most of the USD 1,200 they are receiving from the government to buy groceries. But shoppers are looking at food items differently in these times, as this Quartz survey of 27,244 readers showed. Respondents now prioritise boxed wine and vodka over beer and whiskey, or spam over strawberries. You can see below the difference between the pandemic popularity of some items and their everyday popularity:

This summary was produced by ECRUU

The lockdown measures are expected to help a lot of alcoholics overcome their addiction, according to a research centre in Thailand. However, some  are so severely dependent that suddenly stopping drinking could be dangerous. In India, there have even been reports of people committing suicide due to alcohol withdrawal symptoms. So much so that two states are reopening liquor stores, saying that more people are dying from withdrawal than from the coronavirus. In Kerala, the government is issuing “passes” to alcoholics to allow them to buy drinks. The price of alcohol in the black market has surged, as well as break-ins into the closed liquor stores. “How to make alcohol at home” has also become a very popular Internet search in India, according to Google Trend. 

The WHO, however, had to issue a notice clarifying that drinking alcohol would not help against the coronavirus. This was after a major news channel in Iran reported that close to 4,000 people had died from trying to treat the coronavirus by drinking adulterated alcohol. 

We previously talked about the closure of US ethanol plants as a result of the collapse in fuel demand, causing a surplus of corn in the US. The other consequence of the plant closures is that food companies are running out of CO2 for their refrigerators. This could slow down the production of food, notably meat, the Compressed Gas Association said. The price of dried distiller’s grains, an ethanol by-product used in animal feed, has also shot up. Feedlots are stuck between rising costs and a fall in demand following the closure, or slowing, of meat processing plants. 

After idling a meat processing plant in Pennsylvania, Cargill has interrupted production at its egg factory in Minnesota because of a collapse in demand as it mainly catered for the restaurant and food chain markets. The company warned it would also be slowing meat processing in Canada. 

The animal protection agency PETA, upon hearing the news, sent a letter to Cargill urging them to take this opportunity to make vegan products instead. PETA argued that eating meat was responsible for causing the swine flu and the coronavirus epidemics in the first place. However, several scientists interviewed by The Counter pointed out that there was currently no evidence that neither SARS-CoV-2 nor CoVID-19 were foodborne illnesses. However, they warned that the supply chain of wild animals destroyed geographical and ecological barriers which, combined with the proximity to people, facilitated the transmission of diseases. Overcrowding animals is also an issue in animal husbandry, especially with the use of antibiotics. One of the scientists warned that “antibiotic resistant bacteria are globally, perhaps, the most important source of disease emergence.” 

Nestle noted a 50% increase in demand for frozen food products since the coronavirus containment measures started in the US, notably for frozen pizza, as well as a surge in demand for baking products. However, while #quarantinebaking has been trending on social media, supermarkets have been struggling to source retail-size bags of flour. Data from the North American Millers Association showed that, up until the coronavirus crisis, only 4% of the US’ flour production was used by home bakers. 

This could also signal a turnaround in grains consumption which has been falling steadily over the past decade, according to an analysis by The Counter. And while the bigger milling groups have been struggling to adjust to the switch in demand, consumers have turned to local grain suppliers instead. A local farmers’ market in New York City, for instance, reported a 50% increase in the sale of organically grown whole grains, flours, and beans in the Jan-Mar period. 

Ports in Asia are struggling under the growing number of containers that are piling up because the coronavirus measures have significantly slowed down the pace at which the containers can be cleared. Besides, Alphaliner estimated the equivalent of 9% of the world’s container capacity had been idled as of the end of March,, due to low demand. Overall, global trade could fall by up to 32% in 2020 because of the virus, according to the WTO. Exporting countries like Brazil, meanwhile, are struggling to get containers. Maersk said it was taking empty containers there to help deal with the shortage. 

In a bid to streamline domestic logistics, Bunge announced the launch of its trucking app, Vector, which it has been testing since the start of the year. Bunge noted that, in addition to accelerating and simplifying the process, it also significantly reduced contact between people and was therefore a crucial tool in the times of the coronavirus. The group said exports were moving well despite the containment measures. 

Cargill and Agrocorp, with the help of Rabobank, used blockchain technology to settle a USD 12 million wheat shipment from North America to Indonesia. The stakeholders said the technology helped them shorten the trade deal to 5 days, compared to sometimes as much as a month. The platform, dltledgers, has seen USD 3.3 billion in deals traded over the past 18 months. 

Going back to our beverage news, bars in Washington DC have been exceptionally allowed to cater to the takeout market. One of them, called Dirty Water, has been lowering buckets of cocktails from the third floor of the building where it is located. But you can’t beat this Maryland winery which is using dog delivery. 

This summary was produced by ECRUU

The initial impact of the coronavirus outbreak on demand has pushed down food prices. The FAO reported that its March food price index was down 4.3% when compared to February. The agency said the prospect of an economic recession, combined with the strong US Dollar, pushed down the price of most crops. Experts further argued that food prices will continue to fall, especially for crops used to make biofuels, like sugar and vegetable oils, because of the collapse in oil prices. 

In reality, however, the food industry is not facing an overall drop in demand but rather a shift of how people buy their food. The sector is rushing to reorganise the supply chains which used to clearly separate industrial users, such as restaurants or distributors, and grocery stores. In the US, the government is helping by waiving some requirements and manufacturers can now sell packaged foods without nutrition labels. 

For the moment, the extra demand in grocery stores is not making up for the drop in restaurant consumption, however, and many farmers are struggling with mounting stocks. In the Netherlands, up to 1 million mt of potatoes remains unbought, while a US dairy producer said the sector was struggling to react to the “supply chain breaking down”. Canadian media reported that Ontario farms were instructed to dump 5 million L of raw milk every week in order to lower supply and support prices. Ironically, dairy farms had recently been asked to boost supply to account for panic buying. 

As the virus and containment measures continue to spread across the world, the situation could reverse. The price of a few basic crops, like rice and wheat, have already been rising because of logistical disruptions caused by lockdowns. The situation could be exacerbated by government efforts to limit exports, like in Russia, Kazakhstan and Vietnam, along with some government stockpiling goods, like in Algeria, Turkey and Tunisia. So far, however, experts say the food supply remains perfectly adequate, as they note that firms will only pass on higher commodity prices to consumers if they remain elevated for a sustained period. 

For their part, producers are doing their best to contain the virus while maintaining a steady food supply, although some plants are already facing problems. ADM announced that workers at an Iowa corn plant were placed in quarantine after testing positive for the coronavirus, while Olam unveiled new health precautions in its processing facilities across the world. In more serious cases, Cargill, Tyson Foods and JBS USA had to close meat processing plants in the US to contain the virus. Unilever said it could not guarantee the supply of all goods as it decided to prioritise large and popular food products. It will focus on canned meat and soups, ice cream, and only sell the largest mayonnaise jars. 

Governments around the world are also rushing to protect the food supply chain from coronavirus disruptions by addressing labour concerns and restrictions on the cross-border movement of workers. For one, Germany announced that it will relax travel restrictions and allow seasonal workers from Eastern Europe to come in and help with the fruit and vegetable harvests. The country will also look to find local workers, such as people recently made redundant because of the coronavirus. In the same vein, Australia extended the visas of workers already in the country to make sure farmers were able to pick and pack all of their crops. 

Another option considered by nations to avoid shortages or price volatility is to create food stocks. In the EU, the Commission was asked by French farmers to fund private food stocks to avoid waste and help farmers. Government stocks can eventually help deal with disruptions, like in China where Sinograin unlocked a second batch of 500,000mt of soybeans to be crushed by COFCO. Sources mentioned that the reserves were released only to deal with delays in Brazilian imports. Qatar, meanwhile, hopes to guarantee supply by removing all import duties on food and medicinal items for a period of six months. 

The crisis is shining a light on the countries most reliant on food imports, like Singapore which can only meet 10% of its own food needs because of the scarcity of land. To address the issue, the city-state is launching a new drive to encourage rooftop gardening. Citizens around the world are also looking to grow more vegetables themselves, a move nicknamed “panic planting”. Some are calling their projects “Corona Victory Gardens”, inspired by the campaign to create “Victory Gardens” to feed the UK in WWI. 

Bread-making has become a very popular option for people stuck at home wishing to make more of their own food. Unfortunately, this has led to a shortage of active dry yeast. The solution for many is to make a sourdough starter, although it can be a lengthy and tricky process. In order to help, bread-makers in San Francisco are leaving samples of their active starters hanging from trees for others to take. One starter was left under a sign which read: “Starter name: ‘Freddie, Son of Godric’”. 

This summary was produced by ECRUU

Last week, we talked about the importance of supermarket workers in countries that are under lockdown; this week the emphasis has moved higher up the supply chain to truck drivers and labourers. Exporters in Brazil are saying there aren’t enough trucks to bring commodities to the ports, which in turn is causing demurrage costs. Truck drivers say they are struggling because the usual amenities they require, such as highway stops and restaurants, are closing down. In India, labourers are reportedly worried about their working conditions and refuse to work unless they are provided with proper equipment to protect them from the coronavirus. This labour shortage has forced most Indian ports to declare force majeure, while industries such as sugar mills are struggling to finish the harvest. 

The global sugar market has been particularly affected by the coronavirus outbreak as Brazilian mills, which can choose whether to make ethanol or sugar with their cane, are maximising sugar output given the collapse in fuel demand. Whereas a few months ago many analysts had forecast a global deficit of sugar, the switch in Brazil means the world is likely to see a sugar surplus instead, causing a collapse in sugar prices. 

The price of coffee has soared, on the other hand, with coffee roasting nations looking to bring supply forward in anticipation of further logistic disruptions. Packaged coffee sales in the US surged 25% over the past month, according to Nielsen. Coffee producers in countries such as Brazil and Colombia are getting near-record high prices for their coffee in local currency. A lack of containers, as well as labour shortages, are expected to exacerbate the situation. 

The Ivory Coast said it won’t be selling any more cocoa to major exporters like Cargill and Barry Callebaut, which have already bought more than they had contracted. This is to ensure there is enough supply for smaller buyers amid a lower crop. The smaller, mainly domestic, exporters had earlier asked for support from the Coffee and Cocoa Council to help them compete as they cannot afford to pay the same level of premiums as bigger companies. 

Cocoa importers in the US, meanwhile, have been asked by customs to fill in a questionnaire to identify forced child labour in their supply chain from the Ivory Coast. However, the World Cocoa Foundation said there were only few instances of forced child labour in the country’s cocoa industry, adding that potential restrictions, or even an outright ban, on cocoa imports would be counterproductive and end up hurting farmers who are already very poor. 

Barry Callebaut argued that helping farmers out of poverty was key to ending deforestation. The group said it was on track with its cocoa sustainability targets, having mapped 220,000 farms it sources cocoa from in the Ivory Coast and Ghana, an area of 160,000sq km. It has also helped plant 750,000 native trees to shade cocoa trees and protect them from the weather. Similarly, Nestle said it had managed to map three-quarters of the 120,000 farms it sources cocoa from in the Ivory Coast and Ghana, with the remaining quarter expected to be mapped by October this year. It has also planted 560,000 shade trees. 

Olam said it had spotted over 7,000 instances of child labour in its cocoa supply chain, following a partnership with the Fair Labor Association to monitor 7,000 suppliers in Cameroon. It said it had solved two-thirds of the issues identified by using revenues from the sustainable premium cocoa to build schools. On the other hand, Olam has been accused of failing to prevent deforestation in its palm oil plantations in Gabon. Olam denied the allegations, which will be investigated by the Forest Stewardship Council. 

Environmentalists are worried that deforestation could surge in Brazil’s Amazon as Ibama, the environment protection agency, said it had to reduce enforcement personnel on the ground because of the coronavirus outbreak. Around 30% of Ibama’s workforce is in the most vulnerable age group, it explained, adding that budget cuts had not made it possible to hire younger people.  

In the UK, the Global Resource Initiative Task Force is urging the government to make deforestation targets in the supply chain legally binding by 2030. The taskforce, which has the support of McDonald’s, Tesco and Cargill, among others, also recommends compulsory due diligence. 

Did you know? This week marked the 128th anniversary of the birth of Coca-Cola. The drink, which was initially designed to be a hangover cure, was advertised as a “brain tonic.”

This summary was produced by ECRUU

The spread of the coronavirus is making us rethink the world’s food supply chain. We have, suddenly, come to realise how important supermarkets employees and cashiers are. So much so, in fact, that the US states of Minnesota and Vermont decided to classify food distribution workers as “essential” workers, putting them on par with health professionals and making them eligible for free child care. 

For the elderly, sick or disabled consumers, food delivery staff act like emergency first responders. According to this opinion piece, people working for services like Instacart, DoorDash or UberEats are shouldering the health risks involved with shopping and are often badly compensated, with poor or no health insurance. With the government yet to recognise their role, the onus might be on the companies to protect their workers. This is especially so given that food delivery firms are reaping huge financial returns from the surge in demand. The value of the meal delivery company Blue Apron is now seven times higher than it was last week, while shares jumped as much as 198% in one day. 

Further along the supply chain, containment measures like lockdowns are starting to have an impact on transport logistics. The FAO warned that the biggest issue at the moment was making sure products can be quickly transported from origin to destination. Experts say food prices will inevitably go up if quarantine measures are extended for more than two months. The outbreak is revealing that the food distribution system is “more fragile than we think it is”, a professor at Purdue University said. 

Countries that rely on imports are the most at risk, while some countries play an outsize role in producing a single crop, like Russia’s growing importance as a wheat exporter. The whole situation could escalate even further if countries start to hoard food. Kazakhstan and Serbia, for example, recently banned the export of some food products. 

Eventually, food production itself could take a hit due to the shortage of workers, especially with borders closing down. Rural populations face a higher risk because they often have pre-existing conditions, while rural hospitals are less equipped. In the UK, farmers are calling on the government to help retrain workers who lost their jobs because of the virus to help with food production. The sector faces a potential shortage of 80,000 workers and needs a “land army” to ensure the food supply remains stable, unions said. In some sectors, like Brazil’s and Australia’s sugar industry, the switch to mechanised harvesting will help maintain supply, although other operations like plant maintenance could be affected. 

Most government’s containment measures include clear exemptions for essential products like food and drinks. The problem is that there is a lot of confusion. In Brazil’s Mato Grosso, the city of Rondonopolis forced all facilities to close, including plants owned by Bunge and COFCO. The agriculture ministry said the decree did not comply with federal guidance and called on firms to sue the local government. Nestle also fell victim to the confusion over a lockdown in India. The group, which operates eight facilities in the country, said it suspended or slowed operations while it was engaged in talks with the government over an exemption to the lockdown. 

For the most part, however, agricultural groups are not reporting any major disruptions so far. In the US, ADM, Anderson and Bayer mentioned that they were able to maintain operations as usual ahead of the crucial planting season. Cargill said it had noted a slight increase in net demand although the food service sector now only represents 15% of sales, compared to 55% a week ago. A global recession could change consumption patterns and reduce the global meat demand, a Cargill director said, although supply issues could support prices. In the meantime, he said the group was “making decisions by the hour.” 

On a brighter note, corn futures were supported by news that China had bought the most amount of US corn since 2013, a sign that the country is on the road to recovery. China had been expected to increase imports only in the second half of the year. Cargill also reported that it was now operating its Chinese poultry plant at 80% capacity, compared to 30-40% during the worst of the outbreak. 

The lockdown is also forcing people to spend more time cooking at home. Some, like the Silicon Valley crowd, are struggling more than others. Check out this new recipe from San Francisco – cooking frozen tater tots in a waffle iron – called a totwaffles.

This summary was produced by ECRUU