Coronavirus broke the global food supply chain. It may never recover

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Abi Reader has been asked to produce three per cent less milk from her farm than she did last week. Her milk buyer, Müller, said that demand had dropped in the dairy market and supply needed to match that. Around one in eight litres produced at UK dairy farms is exported globally; of the remainder, half goes into the retail sector, and half into food service – supplies to restaurants, cafes and industrial suppliers. “A lot of that consumption was through food service,” says Chris Elliott, director of the Institute for Global Food Safety at Queen’s University Belfast. “We’re not eating cheese sandwiches, cups of tea and lattes in cafes and restaurants. That whole market has closed now.”

That 50 per cent of the market has disappeared as population restrictions brought about by coronavirus shutters cafes and restaurants, and severely decreases the size of workplaces. While we’re buying more dairy in supermarkets – between five and ten per cent, according to Reader – it’s not enough to make up the shortfall. “There’s a lot of extra milk just sloshing around in the market with nowhere to go,” she says. The problem is accentuated by what the dairy industry calls the “spring flush”: April and May are peak grass-growing months in the UK, and the cows gobble it up – and produce more milk as a result.

Reader, who runs a 200-strong dairy farm in Wales, is one of the lucky ones. She’s “dried some cows off” – stopped milking those that don’t produce much milk in the first place, meaning they don’t come to harm, and increased the amount of milk she’s feeding to calves to prevent having to tip good milk down the drain. She’s had to book just three cows in for slaughter – but has to wait three weeks because of a holdup in the beef processing market. She’s only losing around £150 a day in potential sales of milk. Others have had to tip far more money down the drain.

The dairy industry mirrors a larger problem. Across the country the food supply industry – which has developed and evolved to be part of a globalised, international world operating on a just-in-time supply basis – has begun to falter and fail. In some cases, we don’t have the ability to produce food. In other cases, we can produce it, but don’t have the ability to process and package it. It’s resulting in an industrial-scale food crisis.

As the days get sunnier – tempting us outside – there are vast numbers of crops that will need harvesting across British fields. But as the world shuts down to international travel, and with the fruit and vegetable picking sector reliant on foreign labour, three major picking staffing firms, Hops, Concordia and Fruitful, are doing something unusual: they’re working together. Thousands replied to a call to arms for pickers – though the good news story is undermined in part by the reality. “We’re really thankful people have come forward,” stresses Sarah Boparan of Hops. But only 16 per cent of those who expressed an interest have completed an online interview required – and only ten per cent have passed it. The sticking point? “People are happy to do a couple of days a week or a few hours, but this is a full-time role we need people to commit to.”

At the minute, the industry has enough workers for the crops it’s harvesting. But industry estimates reckon another 15,000 will be needed in fields in May to harvest everything in time. Currently, Boparan thinks the industry will make it, but is clear: “The pressure is on for everybody in the sector.” Otherwise summer fruits and vegetables won’t get harvested, and won’t end up on our supermarket shelves. Defra, the government’s environment department, was partly prepared for a shortage of workers from the European Union: they expected travel to be limited for casual workers, but not due to a pandemic. Instead, they had modelled the impact of Brexit. As a result, a small pilot scheme has allowed those in the industry to fly in labour from outside the EU, but it’s likely that will need to be augmented by homegrown workers – at least temporarily.

Other sectors are feeling the pinch acutely. McDonald’s, which closed all its 1,270 UK restaurants last month as the coronavirus hit hard, sources food from 23,000 farmers across the UK and Ireland, spending more than £600 million on meat and dairy products – as well as eggs and potatoes. The National Beef Association said that beef that would have made its way into burgers was being redirected to other points in the food chain, but that’s easier said than done, reckons Elliott. “People will say if they’re producing the same amount of food they should switch to the retail sector,” he says. But it’s not that simple, because retailers have long standing contracts with suppliers that are difficult to attain, and packaging requirements – and even the kinds of cuts needed – are different between the restaurant and food sector and home cooking. “You might not have the right equipment to produce the right cuts, or the correct packaging equipment,” says Elliott.

Producers, processors and packers are stuck in an awkward catch-22: rip up the rules of how their businesses work to adapt to the new norm – with the knowledge that the total lockdown could change in a matter of weeks or months and leave them scrambling to readjust to their traditional supply chain – or simply wait it out.

All indications are that things won’t return to normal quickly, making the decision slightly easier. Countries across Europe that are starting to ease their lockdown measures are trialling returning children to schools, but aren’t opening up restaurants and cafes – and the UK appears a few weeks or months behind European neighbours.

The government has announced a £3.25 million fund targeted at keeping food waste to a minimum by redistributing up to 14,000 tonnes of surplus food to where it’s needed. But that seems like a sticking plaster for a much wider overall problem.

Matters have been complicated by staff shortages. Elliott speaks to a number of large meat processing companies based in Northern Ireland who supply large retailers. They’re finding that between 20 and 30 per cent of their workforce are either self-isolating or ill – “and that’s causing them major difficulties”. Elliott claims that companies have put out calls across the food service sector asking for any workers who can be transferred to meat processing plants to help. “That’s happening, and people are being mobilised, but you have to go through training,” says Elliott. “Behind the scenes, people are really scrambling to keep things going.”

There’s little support for food producers from the government. “There’s nothing,” says Reader. “Absolutely zip. Every single bit of business support payment out there to battle against this pandemic excludes agriculture at every single turn.” VAT holidays are great if you’re buying products, but not if you’re supplying; loans are treated with scepticism. Reader spent a lot of money in improving her facilities recently – and has “serious loans” she needs to pay back. “We seem to be banging on a lot of doors and nobody is listening,” she says.

But they should be. Because every business in the food supply world that goes to the wall now will cause problems when demand returns to normal. “What worries me is we’re all cutting back on milk now,” she explains. “But that tap isn’t going to easily turn back on again.” Drawing down supplies now could be problematic when July or August rolls around and grass is less plentiful, supply chains are hobbled, and cows produce less milk.

This isn’t just a problem for the UK: the meat industry in the United States is nearing meltdown; fresh produce in Europe is struggling. South east Asia’s palm oil industry is in turmoil. Animal feed grains, which the world sources from Indonesia and South America – are in a perilous state. “There are lots of issues here, across multiple sectors,” says Elliott. “The amount of lateral thinking so many people are doing at the moment is quite incredible. We talk lots about people in the health service doing this fantastic job, but the same thing is happening in the food sector.”

The challenge will be ensuring we’re safe in the future. “Some of these changes downstream will come back to bite us,” says Elliott. We’re shifting from a globalised supply chain to local ones. “It’s like trying to unpick the world’s most complicated jigsaw and put it back together again.”

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