Posted on 04/14/2020 7:59:33 AM PDT by Presbyterian Reporter
Most Americans were not aware food consumption in the U.S. was a 60/40 proposition. Approximately 60% of all food was consumed “outside the home” (or food away from home), and 40% of all food consumed was food “inside the home” (grocery shoppers).
Food ‘outside the home’ included: restaurants, fast-food locales, schools, corporate cafeterias, university lunchrooms, manufacturing cafeterias, hotels, food trucks, park and amusement food sellers and many more. Many of those venues are not thought about when people evaluate the overall U.S. food delivery system; however, this network was approximately 60 percent of all food consumption on a daily basis.
The ‘food away from home‘ sector has its own supply chain. Very few restaurants and venues (cited above) purchase food products from retail grocery outlets.
As a result of the coronavirus mitigation effort the ‘food away from home’ sector has been reduced by 75% of daily food delivery operations. However, people still need to eat. That means retail food outlets, grocers, are seeing sales increases of 25 to 50 percent, depending on the area.
The retail consumer supply chain for manufactured and processed food products includes bulk storage to compensate for seasonality. As Agriculture Secretary Sonny Perdue recently noted “there are over 800 commercial and public warehouses in the continental 48 states that store frozen products.”
Here is a snapshot of the food we had in storage at the end of February: over 302 million pounds of frozen butter; 1.36 billion pounds of frozen cheese; 925 million pounds of frozen chicken; over 1 billion pounds of frozen fruit; nearly 2.04 billion pounds of frozen vegetables; 491 million pounds of frozen beef; and nearly 662 million pounds of frozen pork.
This bulk food storage is how the total U.S. consumer food supply ensures consistent availability even with weather impacts. As a nation we essentially stay one harvest ahead of demand by storing it and smoothing out any peak/valley shortfalls. There are a total of 175,642 commercial facilities involved in this supply-chain across the country
Few Americans are aware of this. However, that stored food supply is the supply-chain for food manufacturers who process the ingredients into a variety of branded food products and distribute to your local supermarket. That bulk stored food, and the subsequent supply chain, is entirely separate from the fresh food supply chain used by restaurants, hotels, cafeterias etc. For almost 8 weeks the retail supply chain has been operating beyond capacity and the burn rate of raw food products is up a stunning 40 percent.
Those bulk warehouses, the feeder pools for retail/consumer manufactured food products, are starting to run low. Believe me: (1) we don’t want to find out what happens when those 800 mass storage facilities run out; and (2) the food supply chain will be a big part of President Trump’s decision-making on reopening the economy thereby re-opening restaurants, cafeterias, etc…. and switching consumption back to fresh supply. This “bigger picture” is not being considered by politically-minded governors, DC politicians, and public health-centric advisors who focus exclusively on the virus.
Additionally, there are very specific issues within each supply chain (commercial and consumer). It is not as easy as people think to move the commercial supply-chain (restaurants etc.) into the consumer supply chain (grocers). First, there are simply packaging capacity issues. Additionally, there’s an entirely different set of regulations on the processing side for the consumer supply chain.
One dairy farmer helps explain:
Are we dumping milk because of greed or low demand, no. It’s the supply chain, there are only so many jug fillers, all were running 24/7 before this cluster you-know-what.
Now demand for jug milk has almost doubled. However, restaurant demand is almost gone; NO ONE is eating out. Restaurant milk is distributed in 2.5 gal bags or pint chugs; further, almost 75 percent of milk is processed into hard products in this country, cheese and butter. Mozzarella is almost a third of total cheese production; how’s pizza sales going right now??
A bit of history – Years ago (40+) every town had a bottler, they ran one shift a day, could ramp up production easily. Now with all the corporate takeovers (wall street over main street) we are left with regional “high efficiency” milk plants that ran jug lines 24/7 before this mess, no excess capacity.
Jug machines cost millions and are MADE IN CHINA. Only so many jugs can be blown at a jug plant. We farmers don’t make the jugs, damn hard to ramp up production.
I’m a dairy farmer, believe me NO dairyman likes dumping milk; and so far there is NO guarantee they will get paid. Milk must be processed within 48 hours of production and 24 hours of receipt in the plant or it goes bad. Same with making it into cheese and butter, and neither stores well for long.
The same supply line problems exists where restaurants are supplied with bulk 1 pound blocks of butter or single serv packs or pats; and cheese is sold in 10 to 20 pound bags (think shredded Mozzarella for pizza). Furthermore, it is not legal for this end of the supply chain to sell direct to consumers in most states.
Take cheddar cheese for instance; it goes from mild to sharp to crap in storage. Butter, frozen, only stores for so long and then must be slowly thawed and processed into other uses as it gets “strong”. At Organic Valley we cook it down into butter oil or ghee for cooking. We are headed for the same problem with canned veggies. The vast majority of produce comes off and is processed in season; canned or frozen. The supply is already in cans for the season; restaurants use gallon cans or bulk bags of frozen produce.
At some point we will run out of consumer sized cans in stock because home size sales are up (40%+) and restaurant sales are almost nonexistent. Fresh produce out of U.S. season comes from Mexico (different climate). I’m talking sweet corn, green beans, peas, tomatoes, all veggies are seasonal in the USA. Fresh, out-of-season, row crops are imported. (There are exceptions, like hydroponic grown, but small amount of total).
Someone mentioned “time to raid all those bins of corn”. Those bins on the farm contain yellow corn, cattle feed and totally unfit for human consumption, now or at harvest.
Eggs? Same problem. Bakeries and restaurants of any size use Pullman egg cases, 30 dozen at a pop, 30 eggs to a flat, 12 flats to a case. There are only so many 1 dozen egg cartons available and only so many packing machines. Industrial bakeries and processors of packaged food buy bulk liquid eggs, no carton at all. Also in many states it is illegal to sell this supply-chain directly to consumers.
On your standard buffet of any size, do you really think they boil eggs and peel them? They come in a bag, boiled and diced; those nice uniform slices of boiled egg you see on your salad, a lot of them come in tubes boiled and extruded at the same time, just unwrap and slice. Your scrambled eggs come in a homogenized bag on most buffets. Another example of Main Street being gutted and “improved by wall street” NO local egg processors available or many small egg producers either, all corporate and huge, contracted to sell to the corporate masters.
This is a warning the same problems exist in all supply chains.
Well, the above story from the Conservative Tree House demonstrates what a 'real' journalist would write if they learned that dairy farmers were dumping milk.
I might add to what Sundance wrote is that school closures also have impacted the milk supply chain. I suspect most schools are either buying milk in 5 gallon bulk containers or in 1 cup individual serving containers.
With all of the schools closed those kiddies are at home and drinking milk from the 1/2 gallon or 1 gallon containers that there parents bought at the local grocery store.
Hence, the reason their is a limit on milk purchases at many grocery stores.
As detailed in the above story it is not easy to switch from bulk packaging to home use packaging on a very short notice.
The “Just In Time” mentality is good for profits but it does make us fragile. Likewise with the centralization.
I don’t see it changing. We are a rich country and people like it that way. I guess I’d prefer to live in a slightly slower, more decentralized, more olde-timey country. But my opinion doesn’t count for much.
You can point the finger at the dairy lobby (Big Milk?) that has essentially put local, family dairy farmers out of business in favor of the behemoths.
Local dairys (dairies?) could probably fill the needs of local restaurants more efficiently.
Wow. That is WAY out of balance for my home (me, wife, 18 YO son). In home is more like 80%.
I guess we're not "average"...
This is a warning the same problems exist in all supply chains.
My wife and I are even more out of the average. Maybe 95% at home. I also take my lunch to work.
I likewise am hopeful many FReepers will read it and pass the report on to friends.
This is the type of journalism that the American Public wants. They want to know about a problem and why it is a problem.
Instead, the vast majority of journalists today are indoctrinated into being ‘sensationalists’——kinda like the tabloid magazines that formerly confronted our eyeballs at the grocery store checkout line.
As does my wife, and she works at a school. She could buy a hot lunch (and in Marion County, FL, school food isn't bad). She just prefers to take her own.
We don't even go out that much, maybe 4 times a year. Although we do like to splurge once in a while on a giant Jersey Mike's original Italian, Mike's way. Yum!
“””My wife and I are even more out of the average. Maybe 95% at home.”””
There is a reason that in any community the number of fast food and regular restaurants far exceed the number of grocery stores. People are eating there.
Add the free breakfast and lunch for kiddies going to school. Along with those who have to pay for their school lunch.
Also, the cafeterias at the workplace.
And all of a sudden it is easy to see why the percent of food consumed outside the home is so large
Few Americans are aware of this.
Another abject failure in the way we educate our youth.
... For almost 8 weeks the retail supply chain has been operating beyond capacity and the burn rate of raw food products is up a stunning 40 percent.
Those bulk warehouses, the feeder pools for retail/consumer manufactured food products, are starting to run low. Believe me: (1) we don’t want to find out what happens when those 800 mass storage facilities run out; ...
How many millions of school children aren’t getting cafeteria milk? (two, sometimes three meals a day). I don’t recall seeing a section in the grocery store for half-pints.
So I imagine a bunch of unused small cartons piling up somewhere.
This change began back in the 1990s in response to major supply chain disruptions related to storms, port strikes on the West Coast, and the infamous chaos in the aftermath of the Union Pacific-Southern Pacific railroad merger.
Keep in mind, however, that some supply chains MUST be operated in a “just in time” manner due to the nature of the products involved. Milk has gotten a lot of attention in recent days because the disruption has wreaked havoc on the industry. That’s because milk is a temperature-controlled product that has a very limited shelf life at each step in the supply chain.
“This is a warning the same problems exist in all supply chains.”
Yes, for all corporatized, hubbed production and distribution.
And for centralized government!
From what I’m hearing in the industry, the distribution centers are the core of the problem and it’s not because they’re “running low.” It’s actually the opposite. They can’t move products out the door fast enough because they are operating with smaller crews due to excessive absenteeism. A lot of staff isn’t showing up to work for various reasons — illness, family commitments, or just fear.
#OUAN Open up America Now!!
Agreed on the information value of this column - Needs to be widely read so people can see the need to get everybody out of their tyranny-spun cocoon that the media wants to call a “quarantine”. To cast a military-view on this article, I would remind FReepers that only amateurs discuss strategy & tactics - professionals discuss logistics, i.e. supply chain. Today is a lovely day to write your various elected officials to lobby for a re-opening of the economy RFN.
"Phase Five Supply Chain – With a Message From A Dairy Farmer…." and more.
A brief glimpse into the supply chain and limited ability to re-engineer to the "home-bound"consumer.
Understanding your domestic food supply and the difficulties in supply chain adjustment
"..the overall U.S. food delivery system; however, this network [to supply commercial and restaurant ] was approximately 60 percent of all food consumption on a daily basis.
The ‘food away from home‘ sector has its own supply chain.
Very few restaurants and venues (cited above) purchase food products from retail grocery outlets.
As a result of the coronavirus mitigation effort the ‘food away from home’ sector has been reduced by 75% of daily food delivery operations.
However, people still need to eat. That means retail food outlets, grocers, are seeing sales increases of 25 to 50 percent, depending on the area.
The retail consumer supply chain for manufactured and processed food products includes bulk storage to compensate for seasonality.
As Agriculture Secretary Sonny Perdue recently noted “there are over 800 commercial and public warehouses in the continental 48 states that store frozen products.”
As a nation we essentially stay one harvest ahead of demand by storing it and smoothing out any peak/valley shortfalls.
There are a total of 175,642 commercial facilities involved in this supply-chain across the country "
" One dairy farmer helps explain:
Are we dumping milk because of greed or low demand, no. It’s the supply chain, there are only so many jug fillers, all were running 24/7 before this cluster you-know-what."
Now demand for jug milk has almost doubled. However, restaurant demand is almost gone; NO ONE is eating out.
Restaurant milk is distributed in 2.5 gal bags or pint chugs; further, almost 75 percent of milk is processed into hard products in this country, cheese and butter.
Mozzarella is almost a third of total cheese production; how’s pizza sales going right now?? "
Eggs? Same problem. Bakeries and restaurants of any size use Pullman egg cases, 30 dozen at a pop, 30 eggs to a flat, 12 flats to a case.
There are only so many 1 dozen egg cartons available and only so many packing machines.
Industrial bakeries and processors of packaged food buy bulk liquid eggs, no carton at all.
H/T to Duncan Waring !
Duncan Waring :" ... For almost 8 weeks the retail supply chain has been operating beyond capacity and the burn rate of raw food products is up a stunning 40 percent."
Thanks for posting.
Not to take away from the actual, IMPORTANT point of the story, but this sentence, towards end, got my attention...
...On your standard buffet of any size, do you really think they boil eggs and peel them? They come in a bag, boiled and diced; those nice uniform slices of boiled egg you see on your salad, a lot of them come in tubes boiled and extruded at the same time, just unwrap and slice. Your scrambled eggs come in a homogenized bag on most buffets. Another example of Main Street being gutted and “improved by wall street”...
:- /
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.