Produce industry facing more than $5 billion in losses

Almost overnight, critical movement and economic activity in the fresh produce supply chain vanished as restaurants, food establishments, hospitality businesses and schools were shuttered, and the retail industry is struggling to adjust. Over a five-day period, 30 million school lunches, 15 million school breakfasts and 100 million meals at restaurants stopped being served daily.

The entire fresh produce industry supply chain is reeling from this sudden and immediate shutdown of an estimated 40% of all produce consumed in America. In fact, the produce industry estimates that the sudden turn of events has resulted in $5 billion in losses to produce growers, shippers and wholesalers during this emergency. Each additional week equates to as much as $1 billion in lost sales that cannot be converted fully to a changing retail market. The impact of the losses has led to thousands of jobs lost and the immediate potential of bankruptcies that will disrupt the produce supply chain for years to come.

More than 80 organizations, including the United Fresh Produce Association, recently joined together in presenting to the U.S. Department of Agriculture a comprehensive, $5 billion Produce Market Stabilization Program to immediately support critical financial needs in the produce supply chain. In addition, 108 members of Congress sent a letter to Agriculture Secretary Sonny Perdue urging USDA to support immediate relief.

Related:Challenging times offer the chance to find a better supply chain

Michael Muzyk, president of Baldor Specialty Foods and chairman of United Fresh, said, “Since the beginning of this crisis, our association has worked to help our industry keep produce moving to consumers, and we’ve worked to help our members actually survive following the devastating financial impact of this crisis. Today is an important day on a path toward some stability for our industry to be able to serve consumers when we’re finally past this terrible time.”

United Fresh president and chief executive officer Tom Stenzel said the first step was passing the Coronavirus Aid, Relief & Economic Security (CARES) Act, devoting $2 trillion to the economy and some $9.5 billion specifically carved out for fruits and vegetables, livestock, dairy and local food systems. Now, the 80 organizations are urging USDA to establish a plan to support the produce industry immediately.

The program encourages funding and guidance for the USDA's purchases of fresh fruits and vegetables, including purchases for federal nutrition programs, as well as direct payments to specialty crop producers affected by lost sales or other financial losses due to the COVID-19 emergency. It also lobbies for assistance and flexibility of the Perishable Agricultural Commodities Act as growers and shippers may struggle to meet contractual obligations. Last, it suggests ongoing assessment and support as significant losses and challenges are likely to occur in the summer and well into the fall.

Related:NGA, United Fresh partner to maintain fresh produce supply

“Although it is critically important to focus the current emergency assistance on already-realized economic impacts of this pandemic during the covered period, as USDA considers its overall response to COVID-19, including funding provided in the CARES Act, through the Commodity Credit Corp. or through future COVID-19 assistance packages, we ask that USDA allow for flexibility in all produce industry assistance programs to allow for support that is needed due to increased costs and losses incurred outside of direct sales,” the groups wrote in the proposal.

Meanwhile, some states are working to offset the huge losses. Florida agriculture commissioner Nicole Fried and the Florida Department of Agriculture & Consumer Services announced the creation of a Florida Farm to You commodities list, connecting potential buyers with farmers and producers of Florida-grown commodities like fresh produce, seafood, poultry and more. The list is updated daily with Florida-grown products, including tomatoes, watermelons, lettuce, blueberries, oysters, chicken, tilapia and more.

Fried has also spoken with large retailers like Publix, Walmart and Whole Foods, as well as state agencies and USDA, requesting that they purchase or stock more Florida-grown commodities. Sprouts Farmers Markets recently indicated that it would increase efforts to stock more Fresh from Florida and Florida-grown products.

“We have worked tirelessly to support Florida’s farmers during COVID-19 by connecting them with buyers and consumers, and our Florida Farm to You commodities list is the latest way we’re doing so,” Fried said. “There’s no silver bullet to solving the decreased demand from foodservice businesses, but by connecting our agricultural producers with willing takers, we can help move Florida-grown products from fields to consumers.”

Producers have already been utilizing the website, with Long & Scott Farms located in Mt. Dora, Fla., listing more than 1 million lb. of cucumbers for sale through the first of June. Branch Inc. located in South Bay, Fla., listed more than 30,000 bu. of sweet corn available, and Oyster Mom LLC listed more than 10,000 boxes of oysters. Numerous other farmers also had listed products in hopes of finding a home for their products.

For our most up-to-date coverage, visit the coronavirus homepage.

This article originally appeared on Feedstuffs, a Supermarket News sister website.