Coronavirus

How Long Can an All-Food Economy Stay Stable Under Shadow of COVID-19?

Stores seem full now, but both illness and legal barriers could interfere with the economy of food production and distribution.

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How long can an economy that is legally about pretty much nothing but food production, distribution, and sales survive in this COVID-19 haunted world?

The United Nation's Food and Agriculture Organization (FAO) isn't feeling good about the near future, to judge from the statements posted on its website. "As of now, disruptions are minimal as food supply has been adequate and markets have been stable so far," it says. But it detects threats looming from both "logistics bottlenecks (not being able to move food from point A to point B), and likely…less food of high-value commodities (i.e. fruits and vegetables) being produced."

Over the next two months, the FAO anticipates "disruptions in the food supply chains," thanks to "restrictions of movement, as well as basic aversion behaviour by workers…. Shortage of fertilizers, veterinary medicines and other input could affect agricultural production. Closures of restaurants and less frequent grocery shopping [will likely] diminish demand for fresh produce and fisheries products, affecting producers and suppliers."

The agency is particularly concerned with "countries that rely heavily on food imports, such as Small Islands Developing States, and countries that depend on primary exports like oil. Vulnerable groups also include small-scale farmers, pastoralists, and fishers who might be hindered from working their land, caring for their livestock, or fishing. They will also face challenges accessing markets to sell their products or buy essential inputs, or struggle due to higher food prices and limited purchasing power." The FAO also worries what will happen to the developing-world children—up to 85 million of them—who depend on school-supplied meals.

During the 2014–16 Ebola ourbreak in Sierra Leone, the group reports, quarantines "led to a spike in hunger and malnutrition. The suffering worsened as restrictions on movement led both to labour shortages at harvest time even as other farmers were unable to bring their produce to market."

The FAO says is already sees "challenges in terms of the logistics involving the movement of food…and the pandemic's impact on livestock sector due to reduced access to animal feed and slaughterhouses' diminished capacity (due to logistical constraints and labour shortages) similar to what happened in China." Transport route blockages from virus fears could especially harm the fresh food market, where products are highly perishable. The FAO thus anticipates price spikes in the meat and fish markets.

Some countries are already practicing isolated bits of food protectionism. Malaysia closed some palm oil planatations because of a virus outbreak. Reuters reports that Kazakhstan has "suspended exports of wheat flour, buckwheat, sugar, sunflower oil, and some vegetables until at least April 15 to ensure their steady supply during the coronavirus emergency." Russia has stopped exporting processed grains, and Vietnam is stockpiling rice.

Here in America, the U.S. Department of Agriculture continues to order the destruction of tanker trucks of milk because processing dairies are full—a product of demand spiking and then, with the disappearance of school lunches, crashing. The U.S. also faces COVID-19-inspired immigration restrictions that will likely harm our food production.

The United Farm Workers union is warning that American food producers aren't doing enough to prepare for the pandemic's potential impact on the industry's workers. "More than 400 commodities grown in California represent 13% of US agricultural value, totaling some $50 billion in business each year," Quartz reports, and "just two California farms supply about 85% of US carrots. If the virus were to disrupt production at the largest of the state's 77,500 farms, it would be felt globally" as "the state's department of food and agriculture put its combined agricultural export value at $20.5 billion."

Short-term stockpiling of things such as yeast can create apparent shortages that are really just supply-chain blockages. But as Ananth Iyer, a supply chain specialist with Purdue University, tells Quartz, labor-dependent items such as avocados, grapes, and tomatoes might face quicker actual shortages if agriculture workers start getting sick.

If U.S. farm worker safety is the world's worry, then the world's production and supply chain is the U.S.'s worry. As the food economist Shub Debgupta argued in The New York Times this week, "The United States relies on foreign suppliers for almost 20 percent of its food, including 80 percent of its seafood, with almost half of that coming from Asia….About half of our imported dairy products come from Europe, also hit hard by the virus. Almost 25 percent of America's cheese comes from Italy…the nation with the world's highest death toll from Covid-19."

"Significant parts of the food supply could be jeopardized should food protectionism accelerate," Debgupta worries. Among other things, he recommends that "state and federal authorities…provide flexibility while ensuring food safety and minimizing waste."

In short: We're entering unprecedented territory in the world of food production, processing, and distribution. But as always, the more interconnected our supply and labor chains remain—and the less governments or viruses keep them from functioning—the better fed we are likely to be.

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  1. A dubious distinction to be first.

    Ditto the above article. I am in the industry, and the ripples are becoming waves.

  2. All about food? The healthcare industry is booming, as is anything telecom related…

    1. Some segments of healthcare. In others, there are layoffs because everything is on hold waiting for the Wuhan Virus tsunami.

      1. At the medical multi-office where my wife works, they laid off nearly half of the administrative staff, and in the process almost got to the correct balance between providers and assorted hangers-on.

        1. This has been my understanding from the doctors and nurses I’ve talked to. All of those elective or nonessential procedures that keep the lights on, are sucking hind tit to potential ‘Rona cases. Not that there’s a lot of PPE or supplies for said nonessential cases right now.

      2. Yes. Here in Seattle nurses are being furloughed in many areas since patients are unable to make visits and be seen except at an ER and no one will move patients for fear the next facility will become like the Kirkland nursing home. I am fortunate in that in my particular discipline (I’d rather not say) i will always be needed but the healthcare economy is in decline also.

    2. This guy gets it. Two points. First, all this unemployment is, for the most part, not just a result of government action. This is a result of countless private decisions, such as people choosing not to go out to restaurants to corporations closing the doors of their business to avoid backlash from the community and to protect themselves from liability. Second, we are witnessing Schumpeter’s creative destruction in action. Consumer demand is changing and jobs are lost and businesses are closed whenever that happens. If the markets remain free, new opportunities will arise, new businesses will form, and new jobs will be created. Of course, that will take time and, in the meantime, millions will suffer. Of course that is sad and unfortunate. But in the end this may end up not being that different from “Henry Ford will put all the buggy drivers out of business” or “the robots are coming for everyone’s jobs.”

      1. Liar. The super strong US economy was knee capped by state politicians.

        The companies scaled back because of those government policies. Companies are still clinging on because our economy was so strong and ready to run, if the government takes off the shackles.

        1. There is a limit to how long smaller businesses that have been shut down can hang on. We have likely all ready passed that limit for many small businesses.

          1. I would say that the vast majority of mom & pop businesses with a handful of employees will not last a month with zero revenue. Even after laying everyone off their fixed costs will bankrupt them and their credit lines will evaporate. Yeah it’s already over for most at this point.

            1. The vast majority of small businesses run on razor thin margins. I think giving them a month is being optimistic.

        2. I agree with that. My son is a contractor and there isn’t unemployed for the self employed. He says he will work until he is arrested. They are holding us hostage and my governor is being clapped on the back for his “good job.”

          1. Unemployment my apologies

        3. Our economy has not been strong – all we did after the 2008 bubble burst was take out the credit card and keep living like nothing happened. The whole “recovery” has been a central banker sham.

      2. Tiny data point to go with Chipper’s post. Total US box office this last week was something like 6,000 bucks. Not 6,000 thousand; 6,000 dollars period. Absolutely amazing.

        Now, it couldn’t happen to a bunch of nicer guys than Hollywood, but hospitality/lodging/restaurants/travel are all taking it in the shorts right now. People aren’t going anywhere, government orders or not.

        1. “…People aren’t going anywhere, government orders or not…”
          Your cite fell off; theaters in CA are closed since people are not allowed out of the house.

          1. Why are the airports deserted? There is no ban on domestic flights.

            1. And deserted they are. My mother flew from West Virginia to Wisconsin a few days ago. Not only was she the only passenger on the flight, she was the only passenger in the entire originating airport.

            2. Dude. Nobody is arguing the virus wouldn’t result in a drop off of business. nobody. That the gov has arbitrarily mandated and ensured the destruction of these business’s is the problem.

              1. And their is nothing creative about their strategy in fact it’s practically barbaric/midevil in it’s simplicity.

            3. “Why are the airports deserted? There is no ban on domestic flights.”

              Wow, the stupid is REALLY strong here!
              Being ordered to stay inside and avoid contact closer than 6′ might have something to do with it, ya think?

      3. “…First, all this unemployment is, for the most part, not just a result of government action…”

        Bullshit.

        1. Agreed. It absolutely is.

      4. such as people choosing not to go out to restaurants

        Uh, it’s kind of hard to “go out to restaurants” when the government’s forced the restaurant to close its dining room.

        1. Like if the we were just dealing with a virus and social distancing as a society it would be almost a point. But the fucking state is literally dictating which business’s can stay open and which can’t arbitrarily and more than likely much thought.

          1. Yes. I have to see patients and go out daily and I can’t get my hair cut.

      5. this isn’t creative destruction in any way. Im guessing your not one of the lucky few that get to see their business destroyed because the gov decided to mandate a perpetual suspension with no timeline, metrics of success or certainty just because it has a theoretical model it wants to try out. This isn’t creative destruction it is banal destruction at the hands of the gov.

      6. “…Second, we are witnessing Schumpeter’s creative destruction in action…”

        “Creative destruction” was a result of being out-competed or left behind by tech, NOT by government shutdown.
        I knew you weren’t real bright, but holy cow!

  3. I believe it’s fast approaching the time when people will start to seriously question whether the mitigation mandates are worth it.

    1. I’ve been thinking this too. People who are still collecting a paycheck from home are happy to relentlessly advocate that everyone stay inside. People are afraid and willing to do so, but if the predicted wave of bodies doesn’t materialize, or people worry about being able to feed their kids, they’ll quickly realize how BS the mandates are.

      1. And those same people are more than the will to have the delivery and supply chain people go out and assume a risk they are unwilling to take so that they can don a mask and run down to the market and stock up on TP and Twinkies. Self-absorbed f*ckers.

    2. “I believe it’s fast approaching the time when people will start to seriously question whether the mitigation mandates are worth it.”

      Some of us have been doing so for several weeks now.

    3. You are correct – people on quora began questioning the current narrative about 48 hours ago. I’ve been churning out questions about the ramifications On the economy of quarantining the healthy for over two weeks inow by myself.

      What sucks is most of my questions or accounts get deleted due to what appears to be ccp propagandists. They are everywhere on social media and news comments sections. They are spinning all sorts of narratives: downplaying China, pro democrat, anti mask and anti chloroquine, pro fauci (this is really popular with these ccp fucks) pro US intelligence, pro martial law, and of course, anti orange man.

      But I’m not joking, they swarm in on anything perceived to be opposed to the above topics. Their accounts are pretty obvious to spot, but there are legitimate progs from America aligned in lockstep with the ccp propagandists.

      I can’t decide if this is going to be a civil war, a coup, ww3, or Just a standard authoritarian takeover. Either way, I’m ready to throw my life away at the first cause for humanist values. No way I’m sticking around for what’s on the menu unless a miracle happens.

      Think we could petition to go back to work?

    4. I predict we won’t start seriously questioning till the journo’s start getting fired as their ad revenue starts to dry up or budget shortfalls ensure certain gov positions need to be cut. Call me a cynic.

    5. They aren’t. I had Covid and now I’m waiting to titer so I can dispel all of these lies in public.

  4. At some point people will wake up and wonder how they could have been so stupid as to think gutting half the jobs in the country was a good idea.

    Then they will blame Trump.

    1. “At some point people will wake up and wonder how they could have been so stupid as to think gutting half the jobs in the country was a good idea.”

      JFree and Hihn will still be screaming on the street corners that only PANIC!!!!! will save us!

  5. Some groups are predicting unemployment in the US as high as 50% in the aftermath of this.

    I think this is optimistic and we should expect riots in the streets at or before 20% unemployment.

    1. Unemployment Rate by Year Since 1929 Compared to Inflation and GDP

      1929 3.2%
      1930 8.7%
      1931 15.9%
      1932 23.6%
      1933 24.9%
      1934 21.7%
      1935 20.1%
      1936 16.9%
      1937 14.3%
      1938 19.0%
      1939 17.2%
      1940 14.6% U.S. draft
      1941 9.9% Pearl Harbor
      1942 4.7%
      1943 1.9%
      1944 1.2%
      1945 1.9%

      Can you believe we still had unemployment in WWII?

      1. “Can you believe we still had unemployment in WWII?”

        Easily. There will always be some unemployment even in the strongest economy.

        However, double digit unemployment is something else entirely, so I have no idea what your point is supposed to be.

    2. Hard to have a riot with only 10 people, standing 6 feet apart – – – – – – – – – –

      1. When things get that bad you think people will keep voluntarily observing social distancing. I think you are delusional.

        1. But as soon as you try, the Stasi will arrest you for “endangering the public by not following the helath mandates” – tough to gain protest critical mass under these conditions.

  6. How long can an economy that is legally about pretty much nothing but food production, distribution, and sales survive in this COVID-19 haunted world?

    Uh what?

    We have outdoor activities, bars, restaurants, grocery, liquor stores, gas stations, drug stores, nail salons, hair care, hardware, real estate, gun stores, shooting ranges, yard care stores, car dealerships, car repair shops, lawyers offices…open for business.

    You people and your Blue states.

    1. Oh yeah, telecom, medical, pharm, traitor Propagandists, movies…

    2. Ah yes, here in my red state of Texas we have none of those things still open save grocery stores. Everything else is closed. All gone. Swept away in the mad panic to save JUST ONE LIFE.

      1. I think gun stores are still open—keep meaning to burn up this gift card I have for Boyert—but I haven’t checked.

        Lots of shit is closed. Restaurants are still doing some take out and delivery.

      2. Life is precious not priceless

    3. Where?

    4. For little old Kansas a statewide state at home order only recently went in effect for us, but many retail/restaurant businesses had been voluntarily closing before the order went out

      You seem to think that everything would be exactly the same as pre-virus if the government hadn’t stepped in. It’s pretty naive

      1. I don’t think anyone seriously thinks everything would have been sunshine and kittens, but things would be a damn site better if the various local governments hadn’t decided it was the perfect time to go full authoritarian and nuke the economy.

      2. there is literally nobody suggesting that. The virus is a serious problem and would have meant the shuttering of many business’s anyway. The Gov ensuring this does noone any favors.

  7. [J]ust two California farms supply about 85% of US carrots.

    What the fuck? I’m all for economies of scale, but even I find that borderline horrifying. So you’re telling me that a determined gang of hoodlums could effectively blockade virtually the entire carrot supply for a nation of over 300 million inhabitants? I don’t know why any hoodlums would want to do that, but it’s food for thought nevertheless.

    1. What’s the size of the farm? Are we talking several hundred thousand acres in the Imperial Valley, owned by one company, as ‘a farm’ ?

      1. It has to be. The per capita consumption of carrots was 8.5 pounds in 2018. That comes to over 2.8 billion pounds of carrots for the year. We’re talking some gigantic farms here.

    2. If I ever go terrorist I’m taking out the carrots. I’d be a legend.

      1. Bugs Bunny would hunt you to the ends of the earth.

    3. Wouldn’t that be food for eye sight? … can i get a sting from the drummer?

    4. For as much agriculture as there is across so much of the US, California’s Central Valley seems to be about the only place (along with a few areas scattered in other places, like Florida, but on a much smaller scale) that can economically grow fresh produce of any sort. And when you have so much capacity concentrated in such a defined region, I suppose consolidation is inevitable. Plus, growing produce has much higher labor demands than most other types of farming- you need to obtain and manage huge numbers of (largely immigrant) laborers, which leads to human-resources type demands that traditional family farmers are ill-suited to handle efficiently. For, say, a corn and soybean grower, there really isn’t a whole lot of efficiency difference if one farmer has 10,000 acres and 5 combines or 5 farmers have 2,000 acres and 1 combine each. Yes there is some, but it’s not enormous in the grand scheme of things. And of course we have seen a lot of consolidation in grain farmers as well, because 40 years ago my scenario might have been 1 farmer with 2,500 acres or 5 farmers with 500 acres- due to increased equipment capability (and thus capital investment), the minimum size to be “efficient” has gotten much greater over time. But there is a limit to where you probably aren’t gaining a whole lot. I’m guessing this is less true in a more labor intensive model like produce farming.

  8. ” . . . both illness and legal barriers could interfere . . . ”

    Only government policies conceived and implemented by power mad, greedy, politicians can interfere.

  9. We get 25% of our cheese from Italy but we don’t need to. We are dumping milk right now because prices have bottomed out. We have to much milk. There is no reason we have to get 25% of our cheese (or any other dairy product) from another country. Mainly that is high end, expensive versions of cheese that is already produced here in the US, but some people think if it comes from Europe it must be better.
    As for seafood, yes we import a lot of it from Asia (and South America) because that is where the fish farms are. But the reason we don’t have more in the US is because… Does anyone want to guess? Regulations and NIMBY.
    Fruits and vegetables are a more difficult crop. Much harder to mechanize but not impossible. In fact much of the technology exists but isn’t as widely used because it is cheaper to hire migrants then to invest in the equipment. When it comes to staple crops like beef, wheat, rice, dry beans etc the US has no real fear of shortages. We have a surplus currently and are just heading into Winter Wheat harvest on the southern plains and haven’t really started planting on the Northern Plains and Intermountain West. Calving has just started in many northern states as well.
    The biggest danger is a shortage of transportation and that many of our farmers and ranchers are older. Also, we will see how the custom combiners handle this situation. Will the caravans of harvesters that move up the plains from Texas to Montana and North Dakota, following the harvest, be able to?

    1. What are the prospects for moving toward an Israeli-style drip irrigation model in the West and Southwest? With so much Arizona acreage being reduced to hardpan through excess irrigation, I would think shifting to brackish water would be a godsend. It might require planting different cultivars than farmers are accustomed to, but I can’t imagine why that wouldn’t be feasible, at least in the mid- to long term.

      1. Irrigation is not my area of expertise. I grew up and now work in dry land agricultural areas. My understanding, however, is the cost and trained personal. I know subsurface drip irrigation is gaining some popularity on the southern plains.

      2. I would say most of the northern plains and Intermountain West don’t use irrigation currently, except the river valleys, and the land is better suited for dry land production anyhow.

  10. A dubious distinction to be first.

  11. I want to make a joke about how long agrarian civilizations lasted, but I suspect that isn’t what the author means by an ‘all-food economy’.

    1. “I want to make a joke about how long agrarian civilizations lasted”

      Yeah, they lasted a long time. With global population several orders of magnitude lower than what we have today.

  12. “…But as always, the more interconnected our supply and labor chains remain—and the less governments or viruses keep them from functioning—the better fed we are likely to be.”

    Sure, but how is JFree gonna keep waving his PANIC!!! flag if we don’t let the government shut down the economy?

  13. I fail to understand why most people aren’t more worried about this! Food/water is critical, and we should spend more time and energy on ensuring this survives without issue, along with the economy.

  14. I’ve been thinking this too

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