Global Coffee Consumption Plummets With Stay-At-Home Orders
Coffee consumption worldwide is set to fall this year for the first time since 2011, according to the U.S. Department of Agriculture. Stay-at-home orders have cratered sales at coffee shops, as 95% of the out-of-home market shuttered, according to industry researcher Marex Spectron. “It will be a slow and staggered comeback for us as a lot of the offices in London are not coming back on until after summer, and some may even open only next year,” said Robert Robinson, co-founder of London coffee chain Notes. In Brazil, low demand at Suplicy Cafes Especiais, one of the country’s largest chains, forced the company to reschedule payments to farmers for shipments already delivered. International coffee giants Dunkin’ and Starbucks have struggled to mitigate the loss of commuter traffic with increased drive-thru and pickup sales, but low demand worldwide is already taking a toll on coffee’s market value. The value of arabica beans is predicted to drop by roughly 10% in the second half of 2020 to about 90 cents a pound, according to Citigroup Inc.
How the Pandemic May Strengthen the U.S. Food System
The pandemic has exposed several weaknesses in the U.S. food supply chain. When restaurants, stadiums, and schools closed, commercial growers could not quickly or easily repackage huge amounts of product for retail sale. At the same time, surging consumer demand at grocery stores outpaced the production capabilities of retail food packagers. The upside has been that smaller regional growers and wholesalers who had already been diversifying their products and sales channels began to fill the gap with direct-to-consumer sales both online and at local and regional farmstands. Farms such as G. Flores Produce and J & L Green Farm in Virginia were well-positioned to bring a variety of produce, meat, and dairy directly to consumers. Tom McDougall, owner of 4P, a food distributor in Virginia, began stepping up his distribution of products from farms such as G. Flores to restaurants, stores, and individual consumers. “Wouldn’t it be amazing,” asks McDougall, “if we came out of the other end of [COVID-19] with a more equitable, distributed, and resilient food system?”
While large-scale commercial farms have an inherent ability to reach more consumers more efficiently, the decentralized nature of more regional agriculture systems allows growers and distributors like G. Flores and 4P to respond more quickly to shifts in supply and demand, which could ultimately strengthen the food system and help eliminate food shortages. Groups such as the Mid-Atlantic Food Resilience and Access Coalition are already matching producers with buyers, creating what they call “community feeding networks” to reach consumers, institutions, and food banks, and to help keep farmers solvent. It remains to be seen how regional food systems and larger commercial agricultural systems will work together to solve potential food shortages, but the pandemic has already created unique alliances that may ultimately decrease food insecurity across the country.
Maine Lobster Prices Drop Amid Lockdowns And Trade War
Closed restaurants, a lack of tourists, and the U.S.-China trade war have battered Maine’s lobster industry. With meager sales and a surplus of lobsters, consumer prices have fallen to less than $6 a pound from about $8-$9 a pound at the same time last year. According to state government data, lobster fishers were paid an average of $4.82 a pound for their haul last year, while this year the going price is just $2 to $3 a pound.
The Maine lobster industry hit peak sales in 2016 with 132 million pounds caught valued at $540 million, according to state data. But in 2017, 2018, and 2019, the industry has sold less than $500 million worth each year. China’s retaliatory tariffs on American lobster have also taken a toll on wholesale exports in the past year. In 2019, Maine lobster exports to China fell by 48%. Last month, at a rare meeting in Bangor, Maine’s fishers outlined the dire state of the industry to President Trump, and in response he directed the U.S. Agriculture Department to funnel some of its federal farming aid to the Maine lobster industry to keep it from sinking. .
Massive Pig Farms Return To Chinese Suburbs To Increase Production
China, the world’s biggest pork consumer, suffered huge production losses in the wake of the 2018 swine fever outbreak. To meet continued demand this year, the country is planning on adding 200 million pigs to its annual production by building farms near cities around the country, particularly near Beijing. The government had relocated many similar suburban farms between 2015 and 2017 to stem the tide of runoff contaminating nearby water and soil. But demand is so high that the government deems the return of suburban pig farms as the best option.
Zu Sheng, owner of Sifanghong Agriculture and Animal Husbandry, is constructing one of 11 farms in Beijing’s suburbs. The site will eventually raise 60,000 pigs a year and is located in Pinggu about 43 miles from the city center. Another Pinggu pork company, New Hope Liuhe, also anticipates a multi-story farm that will raise 150,000 pigs annually. An additional six farms are being revamped and expanded, according to the Beijing municipal government.
To feed just one tenth of Beijing’s 20 million people, analysts estimate that 890,000 pigs need to be grown each year. According to a plan drafted this year, China must raise three times what it did last year, the primary motivation for the return of suburban farms. The southeastern city of Nanjing is also building 12 farms to quadruple its hog output, while Zhejiang, the coastal province south of Shanghai, aims to produce 50% more pigs than it did in 2018.
New Online Grocery Markets Surge In Africa
When coronavirus restrictions shut down open-air food markets in sub-Saharan Africa, online grocery stores expanded to fill the void. The online markets came just as 73 million people in Africa were deemed acutely food insecure (without access to nutritious, affordable food), according to the World Health Organization, and another 147 million were on the brink of extreme poverty and malnutrition, according to the Washington D.C.-based International Food Policy Research Institute.
African tech companies such as Fresh In A Box are now making sure those under lockdown can get fresh food. Fresh In A Box launched in Zimbabwe in October 2018 selling surplus fruits and vegetables from local farms, but the service now distributes about 2.6 tonnes of fruits and vegetables a day from nearly 2,000 farmers, says co-founder Kudakwashe Musasiwa. Customers order online and get a weekly delivery of produce at home. Zimbabwean nurse Sinothando Mpofu says the fruits and vegetables are better quality than what’s typically sold at the supermarket and at a third of the cost.
Other online grocery services such as Uganda’s Market Garden and Namibia’s Tambula have also begun to thrive. Their success is due in part to stay-at-home orders but also to smartphone access, which has only recently reached the majority of people in sub-Saharan Africa, according to figures from the Pew Research Center.
New York City Serves More Than 1 Million Free Meals A Day During Pandemic
Since mid-March, New York City has served more than 40 million free meals and counting. The city partnered with Unqork, a Manhattan-based no-code software application company, to build a digital platform allowing residents to order free meals through city-licensed taxi and ride-sharing drivers desperate for work. The city’s Emergency Food Home Delivery program is now serving nearly 900,000 meals a day, said Kathryn Garcia, the city’s Department of Sanitation commissioner, who is coordinating the meal program. Meals are prepared by 40 different vendors ranging from private catering companies to a foodservice operation that supplies meals to airlines. Vendors are typically reimbursed $7 to $9 for each prepared meal.
As the Emergency Food Home Delivery delivery program launched, the New York City Department of Education also began efforts to feed children by offering free “Grab-and-Go” meals prepared by cafeteria employees. The program quickly expanded to include adults as well, and now it is serving about 540,000 free meals a day. Combined, these two programs are serving nearly 1.5 million free meals a day.
Fire At Fisherman’s Wharf Devastates San Francisco Seafood Industry
Flames higher than 100 feet destroyed a processing and storage warehouse at Fisherman’s Wharf in San Francisco over Memorial Day weekend. The fire occurred in Shed C of Pier 45, a storage facility that had 30 tenants. Many tenants allowed other fishers to store gear there, and the facility was home to at least 7,000 crab traps, each priced between $250 to $300. Another 2,000 shrimp traps and 1,000 black cod traps were also lost, according to Larry Collins, who runs the San Francisco Community Fishing Association.
According to fishing industry professionals, millions of dollars worth of fishing equipment were lost in the fire. The losses will hit the Dungeness crab industry especially hard hit as the industry was already struggling to recover from a slow start to the season that began several months ago. In a good year, the Dungeness crab industry can generate over $95 million. However, the industry lost millions in recent years due to whale entanglements and the crabs’ high levels of domoic acid, a neurotoxin poisonous to humans. Domoic acid levels tend to increase as climates change and ocean waters rise in temperature. To help offset losses from the fire, San Francisco fishers have begun a GoFundMe campaign to replace their gear.
Grocery Prices See Highest Increase In Nearly 50 Years
Last month, the average price of groceries reached their highest monthly increase in nearly 50 years, largely due to high prices for meat and eggs. In April, customers spent 4.3 percent more for meats, poultry, fish and eggs, 1.5 percent more for fruits and vegetables, and 2.9 percent more for cereals and bakery products. On average, this 2.6 percent jump in grocery prices marked the largest increase in the cost of food since February 1974. Among cereal and bakery products alone, April’s 2.9 percent price increase was the steepest it has been in a single month since 1919.
During the same month, 1 in 5 American households became food insecure (lacked consistent access to affordable food) due to the loss of 20 million jobs, putting enormous pressure on both families and food banks. Inflated grocery prices have mostly resulted from supply chain challenges brought on by a combination of restaurant closures, new consumer food buying habits, and limited production in processing plants due to COVID-19. Geri Henchy, director of nutrition policy for the Food Research & Action Center (FRAC), has asked Congress to almost double the minimum SNAP (Supplemental Nutrition Assistance Program) benefit from $16 to $30 per month and to increase the maximum SNAP benefit by 15 percent. FRAC has also advocated for suspending all SNAP administrative rules that may end or lessen benefits during the coronavirus crisis.
High-End Meat Suppliers Begin Selling Direct to Customers
When restaurants began closing in March, the owner of premium meat company Nicky USA, Geoff Latham, braced himself for a shut down. High-end restaurants usually make up 85% of the Oregon-based company’s sales of Wagyu beef steaks, Kurobuta pork chops, and game meats like bison, elk, venison, and ostrich. However, his oldest son Gerick came up with a plan. They would sell their remaining and incoming inventory direct to consumers and grocery stores through online sales, something they had never done before. They still had to lay off some staff, but the strategy has helped the company survive and find new customers.
Nicky USA is one of 2,200 small U.S. meatpacking plants that employ under 500 workers. They now join companies like Allen Brothers, Porter Road, and Snake River Farms in selling direct to customers and retail outlets instead of supplying mainly restaurants. By selling direct, Nicky USA was able to recoup about 40% of its business just 8 weeks into the pandemic. Grocery stores, which had accounted for only 13% of sales, now make up 50% of the company’s profits. Nicky USA also began selling non-meat products such as toilet paper, paper napkins, and CBD products, an idea that stemmed from Latham’s youngest son, Gerod. To Geoff Latham, every sale and online order represents “a blip of hope” in a dire situation where “the finish line keeps moving back on us.” .
COVID-19 Triggers Global Food Crisis, Says UN
The United Nation’s World Food Program (WFP) cautions that another 130 million people could go hungry, as up to 36 nations may face famine by year’s end. While the U.S. currently has no major food shortages, other countries such as South Sudan are at risk. The FAO published data showing that wheat prices in the capital city of Juba have increased 62% since February, and the cost of the staple food cassava (a.k.a. tapioca) shot up to 41%. “We were already facing a famine pre-corona,” said Sudan’s deputy interior minister-designate, Mabior Garang. “If you add corona to the equation, it’s crazy.”
Supply chain challenges have upended food systems in other countries as well. India is the world’s biggest rice exporter, but one of its major distributors, Shri Lal Mahal Group, can now only ship 15% to 20% of its normal volume. Shipping restrictions have also made it increasingly difficult to transport perishable products like fruits, vegetables, and fish. From January 1 through April 10, the capacity of container ships moving goods internationally decreased by 30% due to sailing cancellations. Even ships that make it to ports have faced delays due to facility shutdowns and quarantines, which have resulted in wasted cargo. Air-cargo capacity has also plummeted by nearly 35%, as approximately 85% of passenger flights around the world have been canceled. “You can have a food crisis with lots of food,” said Abdolreza Abbassian, senior economist at the Food and Agriculture Organization of the United Nations. “That’s the situation we’re in.”
