COVID-19 adds uncertainty to food business

Issue Date: March 18, 2020
By Ching Lee

With social distancing being encouraged due to concerns about spreading the novel coronavirus, the global economic fallout from the outbreak continues to trickle down to the farm and people who work in the food business.

The cancellation of many events and gatherings, the closure of a growing number of schools and businesses, and the slowdown in travel, restaurant foot traffic and other activities have dealt a financial blow to farmers and other people in the food-supply chain.

Some of the immediate impacts have been felt by businesses that cater to airports and airlines, schools and companies that offer food to employees, as people limit travel and congregation and choose to work from home, said Tim York, president of Salinas-based Markon Cooperative, which provides fresh produce to food service. Full-service restaurants also have reported a drop in business of 10% to 20%, York said. On Sunday, Gov. Gavin Newsom asked restaurants to cut restaurant occupancy by half, and for bars, wineries, breweries and nightclubs to close.

Tracy Harding, general manager of Capay Valley Farm Shop in Yolo County, which markets locally grown farm products to businesses, said 75% of the company's sales comes from San Francisco Bay Area tech companies that provide food for their employees, many of whom are now working from home. As a result, most of those companies have discontinued or have reduced their food service, leaving a huge hole for the rural food hub and its farmers.

She said the loss of business will hit particularly hard for the smaller farms she works with.

"Some of the egg producers we work with, that is their sole commodity that they're selling to us, potentially even their primary agricultural product," Harding said.

Though the company has been reaching out to other potential buyers, she said, with so many of them also trying to adapt to changes related to the virus, "it can be really hard to try to find a new account in this climate."

York said some food service operations have experienced increased business. For example, restaurants that offer takeout or drive-through and food-delivery businesses such as UberEats and DoorDash have reported increased sales of 20% to 30%, he said, because patrons don't have to interact with crowds.

Harding said San Francisco-based Good Eggs, a grocery-delivery service and customer of Capay Valley Farm Shop, has also reported increased sales. Because Good Eggs has direct relationships with some of her growers, she said she has encouraged the company to buy as much as it can from those farms.

Though he does some business with Capay Valley Farm Shop, Yolo County vegetable farmer Jim Durst said he works mostly through wholesale and retail channels, and so far, he has not experienced problems marketing his crops. However, he acknowledged the current situation "seems like a moving target" and that "it might be totally different" in two weeks.

Diversified farmer Paul Muller, a partner in Full Belly Farm in Yolo County, which also sells to Capay Valley Farm Shop as well as to farmers markets and its community-supported agriculture program, said partners in the farm are now talking about new developments each day "that are changing trajectories of response," including farmers markets closing, calls for social distancing, food needs of the farm's customers, and concerns about the farm crew's health and their changing needs for child care with schools closing.

California Farm Bureau Federation President Jamie Johansson said Farm Bureau has been working with agricultural employers to make sure they're aware of the latest guidelines from health officials and government agencies. The Farm Employers Labor Service, a CFBF affiliate, has provided several updates, and federal and state employment regulators have also released guidance.

"We are working to stay abreast of the latest information and recommendations, and will continue to update employers as the situation develops," Johansson said.

Muller said Full Belly Farm is also evaluating plans for sanitation and food safety, including protocols for interacting with customers at farmers markets and whether to allow them to touch the produce or if the farm should sell everything prepackaged. (See related story)

York noted that shoppers' concerns about the safety of fresh produce in open supermarket displays have led to a rise in sales of bagged salads and other prepackaged produce.

There is currently no evidence that the novel coronavirus that causes COVID-19 is spread through food, according to information from the University of California, Davis, Department of Food Science and Technology. UC experts note, however, that infected people could introduce the virus to the food they are in contact with by coughing and sneezing or through hand contact.

In general, coronaviruses appear to be stable at low and freezing temperatures for a certain period, the World Health Organization said, though typical cooking temperatures will kill the viruses in foods. As a precautionary measure, food-safety specialists at Perdue University recommend people who are immunocompromised buy prepackaged fruits and vegetables or eat cooked fruits and vegetables. They said shoppers should also try not to manipulate produce items at the store.

Joe Lange, director of international sales for Lange Twins Family Winery and Vineyards in San Joaquin County, said though he continues to ship orders, much of his travel schedule for the next few months "is largely in question." Springtime is typically a busy season for wine shows, he said, and already there's been the cancellation of ProWein, an international trade fair for wines and spirits in Germany that he had planned to attend this month.

Concerns about spreading the coronavirus have prompted cancellations of a slew of agriculture-related events and meetings, including this week's Ag Day 2020 at the state Capitol and the California Farm Bureau Capitol AG Conference, which was to be held next week.

For now, Lange said the winery is doing what it can to "work our way through this," including trying to set up a "virtual tasting" with overseas customers by shipping wine ahead and using video chats to conduct business.

Having been hurt by recent U.S.-China trade disputes, Lange said he had expected 2020 "to be the year of perhaps getting on the other side of a rough tariff situation," only to be confronted by new challenges related to the virus.

"The major impact for us is just the uncertainty of how this is going to affect us on an economic basis," he said. "This just proves to you how interconnected the globe is. But we're doing what we can at the moment."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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