The COVID-19 pandemic has left restaurants shuttered and created a frenetic pace at grocery stores, which has led to a shift in the food supply chain that stands to reshape agriculture in the short-term.
“We have this massive reorganization of how people buy their food,” said Pat Westhoff, director of the University of Missouri’s Food and Agricultural Policy Research Institute. “Since we’re buying more at the grocery store, it means (food items) have to be in that form.”
Farmers cut off from their usual markets have started tossing their fresh fruits and vegetables. Dairy producers are dumping milk and asking the government to buy up more commodities and distribute them to food banks and school feeding programs.
Wisconsin cheesemakers are struggling to make up for lost demand from the food service sector, which accounts for half of all cheese sold in the U.S., according to industry data. Grocery stores account for just one-third of sales.
Florida vegetable growers are also seeing bids dry up, from shuttered restaurants and schools to big buyers like Disney World and cruise lines. They are starting to dump crops, too, from grape tomatoes to zucchini and yellow squash, which are fetching market prices far below the cost of picking and packing, according to farmers.
In 2018, Americans spent about $678 billion at full-service and fast-food restaurants, compared with $627 billion at grocery stores and warehouse clubs, according to USDA data. The National Restaurant Association anticipates the industry will lose $225 billion over the next few months.