There’s a Change Coming

Randy Krotz

CEO AgWiki, Inc.

By now, we are all confident of our ability to determine the tone of a coronavirus article within the first few words. I have noticed one of three general categories in most of what I read. First, writers speak to an excess of government control and intervention. Second, politicians, either right, left, or all-inclusive, are failing us. Third, believe science and listen to the experts. Next up are the post-pandemic predictions that run the gamut from intellectual and thoughtful to fear-mongering and cataclysmic. My goal is to stay reasonable and rational, though it is an emotional topic.

Our food system has evolved as consumers’ diets and dining habits have changed over the years, but nothing like the abrupt turn we have taken this spring. Consider the amount of food produced in the U.S. that usually goes through our school systems. Nearly 35 million students receive meals from the National School Lunch Program, a program initiated under President Truman in 1946. Thirty-five million meals, five days a week. That quickly adds up to over six billion meals in an average school year. Can you imagine the supply and demand adjustments that were necessary as schools all over the U.S. closed down throughout March?

Consider the radical way our spending habits have changed recently. We’re not traveling, shopping for non-food items has plummeted, and transportation expenses in most households have reached a new low. What are we spending more money on these past weeks? Groceries. Toilet paper doesn’t fall into the latter category, but alcohol does. Companies that provide grocery items, video streaming, e-commerce, food delivery, or home improvement are faring pretty well. Still, fast-food, hotels, fitness centers, movie theaters, and of course, cruise-lines and airlines are getting walloped.

The agriculture industry quickly recognized that commodity price volatility was going to be part of the pandemic. However, we didn’t necessarily accept or eagerly admit to the other risks that were in our immediate path. In fact, in retrospect, we simply didn’t consider all factions of the agriculture and food industry in our assessment of risk. Our senior government and industry officials were busy delivering a feel-good message that, in-part, was crucial to keeping consumers calm concerning their food supply. Heaven forbid that food shelves would become as bare as the ‘health and beauty’ aisle.

Fruit and vegetable farmers face a distinctive set of challenges and risks in comparison to corn, soy, rice, cotton, and livestock producers. The ethanol industry was already facing a significant downside before the pandemic, but with tumbling oil prices, some production plants shutting down has dramatically impacted the demand for corn. And now to add to the trials, due to what appears to be less than stellar health and safety management, meat and poultry plants across our country are closing, hoping to reopen soon.

How can the agricultural industry best prepare for the modifications that are bound to impact the market post-COVID-19? We need to begin adapting now because thinking nothing will change after all this would be akin to burying your head in the sand. Consumer choices will inevitably alter going forward if for no other reason than the massive reduction in annual income many Americans are experiencing. Will we choose different foods? More meat, less meat, more canned, or even less fresh? Will we divide our income and expenditures up with a renewed focus on health and family, or simply save more money than ever before?

How do individual farmers best serve their operation, their community, and the consumer? There’s no one answer to that question. The fast-paced evolution experienced in our lifetimes will be wholly outpaced by what’s over the horizon. Consumer awareness of where their food comes from is snowballing, and with that knowledge, they will make demands, demands that agriculture will want to respond to promptly. What will it be? I have faith that farmers will put themselves in a position to win and pursue those new market opportunities as they arise.

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