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Farmers adjust as food service starts to reopen

Issue Date: April 14, 2021
By Ching Lee
San Diego County farmer Endeavour Shen began selling leafy greens and other produce from other farms via an online home-delivery model after COVID-19 closed a key food-service market for his crops. He says he believes people will change their produce-buying habits as a result of the pandemic.
Photo/Rob Andrew

As restaurants, banquet halls, schools and other food-service venues begin to reopen from pandemic-related shutdowns and restrictions, farmers who market into these channels say they continue to adapt to changes in demand as they try to navigate an economic landscape that remains largely uncertain.

Many of the farmers say they had to make planting decisions months ago, when they were less clear if or when some of those customers would return.

Some farmers who pivoted their businesses to community-supported agriculture subscription food boxes and other, similar services say they're unsure how many customers will stick with them as life returns to more-normal patterns.

"A month ago, I was still freaking out about this stuff, because I don't know what's going to happen and I don't know exactly what to do," Paul Holmes said about his crop plans for Terra Firma Farm in Winters. "I still don't know that what we did is the right thing."

Holmes said he cut back on summer crops that in the past would go to restaurants, and took a "very conservative" approach overall. Some San Francisco distributors that sell primarily to restaurants are still buying "a tiny, tiny fraction of what they used to buy," and he said he does not expect the same level of sales to technology companies with corporate cafeterias, which had been a "big source of business" for the farm.

Though Terra Firma's CSA business doubled from about 750 subscribers to 1,500 last year, with many members sizing up their weekly boxes and "ordering a crazy amount of stuff," Holmes said those sales have already dropped by half, and he expects more shrinkage. In a recent survey of his CSA customers, he said a third of them indicated they plan to take lengthy vacations this summer, which means his CSA sales could drop further.

Endeavour Shen, who farms hydroponic leafy greens and orchids in San Diego County, lost a key market for his butter lettuce when the Escondido School District closed for in-person learning, so he shifted his business to allow online ordering and home delivery.

Whereas his sales early in the pandemic "were driven by fear, because people were afraid to go out," he said those anxieties have largely subsided, as more people now venture back to stores.

Even with more schools reopening, Shen said he won't be supplying the school district, at least for now, because he wants to give his new business a chance, even though it continues to lose money. He said he thinks that when people go back to working outside the home, shuttling their children back and forth from school, they'll be more inclined to want the convenience of groceries delivered to them.

"I know there's a future for it," he said. "I feel like this pandemic actually made the consumer change their habit of buying stuff."

Cole Mazariegos-Anastassiou of Brisa Ranch in Pescadero said he's planting more acreage this year—not because he's expecting a full return of his restaurant customers, though he does think sales to food service will increase by summer.

Rather, he said he based much of his crop planning on the growth of his CSA business, which doubled last year and rose another 30% this year.

Because of the diversity of his crops and different markets for them, Mazariegos-Anastassiou said he's been able to "pivot and navigate the pandemic pretty well."

His wholesale customers, for example, have been buying about the same volume from his farm. Even though he has lost some CSA customers, he said he thinks those who remain will stay on, especially now that they're accustomed to receiving CSA boxes.

Riverdog Farm in Guinda tripled its CSA customers, and Trini Campbell said that side of her farm's business is "holding strong." Even so, she said the farm had to scale back its production this year, due to uncertainty of when restaurants would fully reopen and to projected water availability. Because of current dry conditions, she said the farm has reduced plantings of crops such as sweet corn.

With the farm's diverse plantings and volume, Campbell said she'll be able to continue to sell to the different markets she has always served, noting that whatever the farm produces beyond the needs of the CSA will go to restaurants, wholesale and stores.

When Capay Valley Farm Shop in Esparto, which markets locally grown farm products to businesses, lost much of its business last year to tech firms that provide food for their employees, General Manager Tracy Harding said the rural food hub was able to expand its markets and geographic reach by helping other food hubs and CSAs that didn't have enough volume.

Even though tech companies are coming back "in dribs and drabs," Harding said, "we're still hustling and … constantly looking for new buyers, because not much is very stable."

"The only thing that I can tell you with certainty that's going to continue is that we all have to stay nimble," Harding said.

As a duck egg farmer in Monterey County, Marc Metzer said his sales to food service—which accounted for 60% of his business—plummeted to nothing at the start of the pandemic, though retail sales "more than made up" for that lost business, at least for a couple months. By the middle to the end of last year, he said his retail sales went back to normal, while sales to food service remained "completely wiped out," because the high-end restaurants that are his primary customers "don't have drive-throughs."

"But things are picking up now," Metzer said, adding that he's optimistic his food service sales will return to pre-pandemic levels once the state completely reopens.

For Sacramento County aquaculture producer Ken Beer, whose markets include retailers, restaurants, processors and distributors that sell to restaurants, 2020 represented "our worst year" in volume of fish sold.

Not only did the farm cut prices 25% to its retail customers during the first six months of the pandemic to "share the pain," he said, but it was operating at a higher cost due to unsold fish that it had to continue to feed and maintain.

Noting that demand has "really picked up the last two months," Beer said he's entering his spawning season with hopes that this will be a "real big sales year" as restaurants reopen.

"That's what we're counting on," he said. "So far, it's looking pretty good."

(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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