Five million pounds of green beans that we have destroyed.
Eight million pounds of cabbage that we've destroyed.
We have to grind it up back into the ground.
It's the only choice we have, and hope for a better day.
Paul Allen isn't alone.
Farmers across the country are destroying millions of pounds of fresh
produce as the coronavirus has majorly disrupted the food supply chain.
Initially, consumers hoarded items like rice, beans and frozen foods.
The panic buying resulted in empty aisles and some wondered if the U.S.
was in danger of a food shortage.
That's far from the reality though, especially when it comes to produce.
The United States had a food surplus before the crisis, and we still do.
According to the U.S. Department of Agriculture, 30 to 40 percent of
post-harvest food is wasted annually.
And the coronavirus is making the situation worse.
So, it was in the middle of March when they shut down all of the
restaurants, you know, and then all the theme parks shut down, cruise
lines shut down. In a matter of days, m any farms lost the majority, if
not their entire market channel.
Before the crisis, o ver half of American's food dollars were spent outside
the home, at restaurants and other food service locations.
The coronavirus immediately changed that, but the farmers had already
planted their crops.
So now they're destroying them, plowing cabbage, lettuce and other fresh
produce intended for restaurants and schools, straight back into the
ground. Yeah, I'd say 25 percent of the crop that's grown in our industry
is probably not being able to make it to either retail or food service.
Probably the most trying time that we've probably ever had since the Great
Depression here in the Salinas Valley and farming.
While restaurants and schools are closed, this doesn't mean that we're
eating any less. We're just getting more of our food from grocery stores.
So why are farmers still destroying their crops?
The supply and demand in an overall sense is exactly the same.
The challenge is how we're getting that food, where we're getting that
food and in some cases, what types of food we're getting.
Basically, farmers are up against an inflexible food supply chain, which is
specialized for the end customer.
Longstanding contracts between farmers, restaurants, schools and grocery
stores determine how the crops will be packaged and processed.
So it's just not easy to divert all the produce intended for restaurants
to grocery stores instead.
You're really designing your farm to fit whatever specific sales outlet you
have. The system just isn't set up to be that nimble.
A quarter of all food consumed and over half of all food dollars go to the
food service sector.
So many operations are designed specifically with restaurants in mind.
Most of the volume sizes per unit are larger.
Where you might get a 12 ounce bag of veggies in a supermarket, most of
the food service stuff is like 10 pound bags.
So it's not easy to switch to those factories, the packaging in those
factories, from restaurant or commercial to consumer.
Rodney Braga, President and CEO of B raga Fresh Family Farms in
California's Salinas Valley, has been able to send a greater share of his
produce to grocery stores.
But he says the distribution centers are facing a bottleneck and just
can't handle more food right now.
They're not set up to run at 200 percent , they're set up to run
efficiently at 100 percent.
S o they're maxed out now at 130, 140 percent of normal.
So they're at that crunch point.
And when it comes to perishables like the lettuce grown at Br aga Fresh,
it's not possible to store it until distribution centers have capacity or
until the economy opens back up.
It's either harvested and sold and consumed or it's done away with because
the shelf life is, you know, two weeks max.
All this means that tens of millions of pounds of fresh produce are either
rotting in fields or being destroyed, even as food banks are facing a 70
percent average increase in demand, as the crisis has left millions of
Americans newly unemployed.
In September 2019, the U.S.
Department of Agriculture estimated that 37 million people were facing
food insecurity in the United States.
The national food bank network, Feeding America, estimates that figure
will increase by 17.1 million because of the crisis.
A lot of us have chose to spend more money for harvest cost just to send
food to food banks, and we've done a lot of that.
But spending money to harvest, process and transport crops for donation
puts a further strain on farms that are already struggling financially.
Lots of Allen's paying customers have already gone away since many of his
crops are sold primarily to restaurants.
Our cabbage is like 65, 70 percent.
Green beans are probably 60 percent food service.
We have to grind it up back into the ground.
I have a friend that had to destroy 10 million pounds of tomatoes.
Another friend that has destroyed 55 million pounds of leafy vegetables
and produce. Farmers aren't the only ones taking a hit.
Five percent of the country's milk supply is currently being dumped, and
hundreds of thousands of eggs are being smashed daily , s dairy farmers
and poultry farmers deal with similar supply chain challenges.
While we won't have a complete picture of the financial impact until the
crisis subsides, Allen says that his revenues dropped substantially since
mid-March, amounting to hundreds of thousands of dollars in losses every
day. Well for cabbage, my revenue's down 60 percent.
For beans, for a month time I mean, it was down 50 percent.
Oftentimes you're talking about 250, 300 thousand dollars per day because
the volume is so large.
Even farmers who grow primarily for grocery outlets are being hit hard as
they've seen wholesale prices for produce fall.
The price impacts that we're starting to see are ten to twenty five percent
lower than what they had been suggesting a couple of months ago.
Braga Ranch sells primarily to large grocery chains, and while demand is
up, Braga says it's just not enough to overcome the glut in products like
iceberg and romaine lettuce.
To have demand be up 30, 40, 50 percent, t hat usually would mean that the
price is very good and very high.
But there's so much crop, and some of it being disked under, that you've
got prices down basically at breakeven.
Even if the supply chain bottlenecks were solved, t he demand for certain
items might never keep up with supply, until the restaurant business has
fully recovered. The crisis has revealed that Americans just consume more
vegetables at restaurants than they do at home.
Who all goes to a supermarket and buys a head of cabbage anymore?
It's just not happening. And who makes coleslaw at home anymore?
They just really don't. But so long as farmers assume that the food
service industry will open up over the next few months, it just doesn't
make sense for them to completely alter their growing patterns or seek out
new markets, e ven as the sector faces substantial losses.
We were estimating for the 2020 year, there would be about a 20 billion
dollar loss out of about 100 billion dollars in net farm income.
Unfortunately, the situation has gotten worse since we've done those
estimates. So 20 billion looks like a fairly optimistic scenario.
Instead, many are hoping that government interventions and aid packages
will help to carry them through this rough patch.
In mid-April, the White House announced their long-awaited 19 billion
dollar farm relief package, which sets aside 16 billion in direct payments
to farmers and ranchers and three billion in government purchases of
dairy, meat and produce intended for distribution to food banks.
Absolutely, no question, it's all going to help.
But there's no way it's going to take each individual business back to
where they would have been in 2020 absent all of this.
Farmers welcome the relief, though many are upset that the program caps
payments at 125 thousand dollars per product and 250 thousand dollars
total per farmer.
A lot of farmers, particularly farmers who grow vegetables and fruits, they
are going to lose significantly more than a quarter million dollars in
this year's pandemic.
We need to make farmers whole and not have an arbitrary dollar cut off.
Allen says because some crops cost much more to grow, it's unfair that all
farmers have the same ceiling.
He claims the 125 thousand dollars per product cap is less than what one
day's harvest could bring in.
Cabbage will be probably 10 times the amount to grow and harvest as what a
soybean crop is, no doubt.
And what's happened is the USDA has really made this one size fits all.
But what is fair is not always equal.
But as farmers push for more money, at least some of this initial aid
package will help redirect the enormous amount of food waste to food
banks. For the next six months, the U.S.
Department of Agriculture plans to spend approximately 100 million dollars
per month purchasing excess produce and 100 million on dairy and meat.
These items will be combined into variety boxes to be distributed at food
banks and other community organizations.
This will be a boon to the millions of Americans facing food insecurity as
a result of the pandemic, but farmers say the government purchases won't
come close to solving their food waste woes.
Even if we could harvest everything that t he food banks could take, it
still wouldn't be one tenth of what the food service sector is in our
country. Analysts, academics and farmers themselves have all gotten used
to admitting that they just don't know what to expect over these next few
months, as it's become clear that the return to normal will be a slow,
halting process.
In my opinion, we're in a bad spot for at least two years.
We're not done with this until you and I have a vaccine that has been
distributed everywhere and works.
And by that point, we're going to have debts that are measured with with
the letter T instead of the letter B.
And even as many states begin to open back up, the dining experience will
likely be altered for the foreseeable future, as restaurants operate at a
lower capacity in order to comply with social distancing recommendations.
So if they're going to only seat half as many people, well right there
you've got half the demand in the restaurants even when they're open.
In any case, many say that providing farmers with the support they need to
weather this crisis is paramount to the future of the agricultural
industry and our nation's food security as a whole.
If a lot of farms go out of business, we're going to lose the land base.
We're going to lose the know-how, and that will have an impact with our
next crisis.
We need to keep farmers in business and on the land.