Posts Tagged “COVID-19”

Keeping It Fresh: Produce Season Challenges

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By Brendan McCallum, ALC Rochester

With every produce shipping season comes a new set of challenges, and the 2021 season may be the most challenging we have ever seen. The impact of COVID-19 on the economy has been massive and unprecedented, with every industry being affected in one way or another. While many industries suffered during this time, the agriculture industry saw volumes increase. Add on the usual surge in volume during the produce season, and you see an extremely tight capacity situation.
Shifting focus to the Northeast, which has its heaviest peak of volume in August/September, relying mainly on the production of apples, corn, and blueberries. In 2020 we had seen increases in produce sales within these major Northeast crops, only to see these numbers increase further coming into 2021:

  • Total corn production increase estimated at 6.5% between 2019 and 2020, with that trend continuing into 2021, which is in part due to corn exports increasing because of high demand from China and other importers. 
  • In New York, apple production is expected to increase in 2021 due largely to improving export markets and continued strong domestic demand.
  • Coming off a 2020 drought season, Maine has shown improvement in blueberry production in 2021 and will see continued improvements, due to further education/research on climate adaptions.

These are just some examples that will make up for a challenging peak in the Northeast produce season. Around this time, carriers will devote trucks to moving high crop volumes, diminishing available capacity throughout the country. This causes spikes in truck rates, which immediately impacts the ability to book shipments into or out of the affected and nearby states. It is important to apply advanced preparations and have a strategy in place to adapt to various seasonal demand changes. This is the season in which relationships built throughout the year with carriers becomes so important. Having people you can rely on to ship these products during a trying time will help mitigate disruptions and frustrations, ensuring continued success for everyone involved.   

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Brendan McCallum is a transportation broker in his first year at the ALC Rochester, office. He has three years of previous experience working in Intermodal Logistics. Brendan attended The College at Brockport where he obtained a Bachelor’s Degree in Sport Management.     

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Spending on Eating Out Plunges in 2020 Due to COVID-19 Pandemic

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A nearly 20% decline in spending on eating out occasions contributed to a 5% decline in food spending in 2020, according to the USDA.

In a report on food expenditures, the USDA said 2020 U.S. spending on food totaled about $1.56 trillion, 5.3% lower than the $1.65 trillion spent on food in the U.S. in 2019. Last year was only the second time annual total food expenditures decreased over the last 25 years.

The only other time spending decreased, notes the USDA, was in 2009 during the Great Recession. 

The 2020 decrease in total food spending was driven by an 18.3% drop in spending at restaurants, cafeterias, and other eating-out places.

Because of the additional cost of eating away from home, that decrease outweighed an 8.5% jump in food-at-home (FAH) spending.

For the past 25 years, U.S. food annual total expenditures and the share of food-away-from-home showed steady increases, with the highest share of food away from home spending occurring during the summer months.

The coronavirus COVID-19 pandemic limited mobility of U.S. consumers and led to an economic recession for most of 2020, disrupting historical trends in food spending,” the USDA report said.

In April 2020, U.S. consumers spent about two-thirds of their food dollars at food at home retailers (grocery outlets), the highest value on record.

The last quarter of 2020 saw monthly increases in food at home spending, an expected outcome of colder weather and holiday meal preparation, which resulted in record-high food at home spending in December.

On the other hand, food away from home spending decreased in November by 10% and showed a slight increase in December but remained well below 2019 levels.

“While COVID-19 vaccine distribution for select groups began in the United States in December 2020, the post-pandemic landscape of the food economy remains unclear,” the USDA said.


 

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Prepackaged Fresh Produce Sales Soar Amid COVID-19 Pandemic

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CLEVELAND — A new Freedonia Group analysis projects US sales of fresh produce packaging to grow 3.7% per year to nearly $7 billion in 2024, as demand continues to rise among both consumers and foodservice establishments for produce sold in some form of packaging – including pouches, bags, and rigid plastic containers.

Among the key drivers of growth will be increasing sales of ready-to-eat (RTE) salads, as well as pre-cut produce such as apple slices, melon spears, and carrot sticks – which are typically sold in clamshells, cups, and other plastic containers. Sales of these and other prepackaged fresh produce have soared during the pandemic due to:

  • surging grocery sales – including more packaging-intensive online grocery orders – as consumers began eating out far less and cooking in way more
  • increased concerns about the safety of loose bulk-bin items that have been handled by others in stores
  • rising demand for convenience foods, including RTE produce, which require minimal or no prep before consumption, unlike their unpackaged counterparts, which often need to be washed, peeled, and/or chopped

Sales of plastic containers increased 5% in 2020, the biggest gain of the main produce packaging types – boosted by their intensive use with RTE produce. The sharp increase recorded in organic produce sales further bolstered plastic container demand, as these premium brands tend to employ value-added rigid packaging for product differentiation purposes, whereas non-organic brands tend to employ bags or pillow pouches due to their lower cost.

Through 2024, sales of plastic containers are expected to outpace those for all other major packaging categories, as clamshells and other plastic containers continue to supplant commodity bags and pillow pouches due to their good protective and display properties.

About the Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is the premier international industrial research company, providing our clients with product analyses, market forecasts, industry trends, and market share information. From one-person consulting firms to global conglomerates, our analysts provide companies with unbiased, reliable industry market research and analysis to help them make important business decisions. With over 100 studies published annually, we support over 90% of the industrial Fortune 500 companies. 

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California Prune Growers Look for Hope After a Challenging Year

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When the sun rose above the Sacramento and San Joaquin Valleys on New Year’s Day 2020, it was business as usual for California’s prune growers. Their plum trees had been tended to in the run up to winter in order to regulate tree shape and growth, and the first bloom of the year was just weeks away. By the time spring arrived however, the world was caught up in an unprecedented pandemic, the impact of which would be felt economically and socially across the globe.

For Californian agriculture, the combination of COVID-19 and the summer wildfires certainly made for an unusual and challenging year. Buoyed by a healthy, if relatively short, crop however, California Prune growers have found a sliver of hope in sales and are looking ahead to 2021 with optimism.

Donn Zea, Executive Director of the California Prune Board, which represents around 800 prune growers and packers, explains: “Agriculture, like other sectors, has been adversely impacted by the pandemic. The food service industry in particular has been devasted because of restrictions and lockdowns.

“However, with more people choosing to get creative in their own kitchens, consumers have been raiding their store cupboards and experimenting with ingredients they might not normally think to use, such as dried fruit. Consumers are also looking for natural foods with nutritional benefits, and that’s a trend we’ve seen reflected in our sales in Europe and the Far East in particular. We’re hopeful that it continues, especially given California Prunes contain vitamins and minerals that play a part in maintaining healthy immune systems.”

In response to the challenges posed by the both the fires and the pandemic, California Prune growers have adapted well. Donn adds: “Mother Nature waits for no one so, when the harvest came, California Prune growers and their teams worked against the backdrop of smoke, the intense heat of the summer sun and the COVID-19 workplace guidance necessary to keep everyone safe.”

California Prune grower John Taylor, of Taylor Brother Farms in Yuba City, CA, explains: “The pandemic has affected operations, but we felt it less in the orchards, where we were able to separate workers more easily. Our priority this year has been to keep our teams healthy and get through the harvest.”

His fellow Yuba City grower Nick Micheli, of Micheli Enterprises adds: “It was important we responded immediately with the correct procedures such as the implementation of sanitisers, gloves and masks to keep our people safe. Working in PPE in the heat was of course tricky but everyone pulled together under difficult circumstances.”

As challenging as 2020 has been, both growers agree it’s been a ‘vintage’ year for the prunes themselves, in terms of sizing, quality, consistent flavour and excellent sugar content. 

Donn adds: “We’re extremely proud of our California Prunes and the value they can add to the trade and the end consumer in terms of nutritional profile, premium taste and versatility – a process that begins right back in the orchards.”

With the arrival of 2021, the Board is well-placed to respond to the trend towards healthier eating, and its produce comes backed with decades of research into the benefits of eating prunes. For now, though, as the orchards lay dormant for another winter, California Prune growers are already looking ahead to the March bloom. After all, there’s nothing like a blossoming canopy of fragrant flowers to bring hope and optimism.

For more information on California Prunes, visit www.californiaprunes.net

ABOUT THE CALIFORNIA PRUNE BOARD 
Created in 1952, The California Prune Board aims to amplify the premium positioning and top-of-mind awareness of California Prunes through advertising, public relations, promotion, nutrition research, crop management and sustainability research, and issues management. The California Prune Board represents approximately 800 prune growers and 28 prune, juice, and ingredient handlers under the authority of the California Secretary of Food and Agriculture.

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Shipping Operations Expect U.S. Import Binge to Lose Steam

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U.S. surging imports are fueling record high freight costs and logjams at seaports, but transportation executives expect the rally to lose steam with a second wave of Covid-19 restrictions.

Reuters news agency reports container shipping companies got stung late last year and early this year when the pandemic halted trade around the world, and they question whether the U.S. import boom can be sustained.

“Let’s not get carried away,” Rolf Habben Jansen, chief executive of Germany’s Hapag Lloyd, was quoted as telling reporters. “This is just a spike that no one has foreseen in an unusual period. There will be a correction to that.”

U.S. consumer confidence ticked up in September, when retail sales accelerated. Still, consumers are eating through savings, layoffs are mounting and the country just set a record for new COVID-19 infections.

“Everything depends on the demand and how the second wave of COVID affects the world economy,” Aristides Pittas, CEO of shipping company Euroseas, said at a Capital Link virtual event.

In recent weeks, the cost of transporting goods from Asia to the United States – one of the world’s biggest retail markets – topped $4,500 per 40-foot container unit (FEU), the highest recorded level, data from S&P Global Platts Containers showed.

“We are sold out. The ships are 100 percent full. The containers are 100 percent full. You can’t get a container,” Jeremy Nixon, CEO of Japanese container group Ocean Network Express (ONE), said at a recent International Chamber of Shipping virtual event.

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Retail Potato Sales Remain Strong

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By Potatoes USA

Since public health restrictions for COVID-19 were put in place, potato sales at retail have been well above historical levels. This has continued throughout the summer, even as some of these restrictions have been relaxed. For the period from March 16 – September 6, 2020, sales of potatoes have been up every week, and the total value and volume are up 22 percent over the same period in 2019.

All categories, except prepared sides at the deli (many of which have been closed or refigured), have shown increases but the largest gains were for canned, dehydrated, and frozen potatoes. Fresh potatoes have also fared very well, with a 24 percent increase in volume and a 33 percent increase in value. Potato chips, the largest category at retail, has also performed well; up 8 percent in volume and 15 percent in value.

The greater increases in the dollar sales over volume reflects significant increases in the price per pound through the summer. The largest increases in price per pound were refrigerated and fresh potatoes, up 7.6 percent and 7 percent compared to the same timeframe in 2019.

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Keeping It Fresh: Beyond COVID-19

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By Nora Trueblood

We have been inundated with information, some mostly correct, some not, specific to COVID-19. I don’t know about you, but I am quite exhausted by it all. Every one of us is on a different journey because of the pandemic, and I personally continue to recognize that a person’s opinion is just that…their opinion. I do think it is safe to say, that we are all trying to manage and figure out our own journey through life as we deal with COVID-19.
Keeping it Fresh is distributed to many of our perishable/produce customers, and I wanted to take the opportunity in this issue to bring to your attention some of the great philanthropy that is taking place during this crazy time. Many of these growers/shippers work with the Allen Lund Company in everyday business, but many also donate food to Navidad en el Barrio, a project that has existed since 1972, and one that ALC has supported since 2004.
So, a hearty thank you from the Allen Lund Company and the recipients of these generous donations to:

We still have quite a road ahead, and we wish all of our industry friends the best as we maneuver through our current challenges.

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Nora Trueblood is Director of Marketing and Communications, Allen Lund Company Corporate of La Canada, CA. She began her career with ALC in 2002 as Director of Marketing & Communications. Prior to joining the company, Trueblood worked as the event manager with the Montrose Arts Council and Alpine Dance in Montrose, CO, had her own production and event planning company and spent 7 years with Lorimar Television.

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Mushroom Shipments Rebounding after Pandemic-Related Shortages

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Mushroom shipments in the U.S. and Canadian are slowly starting to increase after growers curtailed planting in response to a huge drop in sales when COVID-19 hit in March.

South Mill Champs of Kennett Square, PA notes there have been extensive shortages of mushrooms because of the disruption of the foodservice market as a result of COVID-19. Shipments still remain significantly lower than a year ago, but meeting demand during what is typically the slowest time of the year for mushroom sales.

To-Jo Mushrooms of Avondale, PA., reports it had minimal supply interruptions, although there were challenges with fluctuations in demand. Since mid July more consistent shipments have been occurring.

Highline Mushrooms of Leamington, Ontario, reports it has maintained very strong and consistent demand from retail for mushrooms recently, making it difficult to maintain adequate supply for the demand.

Phillips Mushroom Farms of Kennett Square, PA notes when COVID-19 hit, it did not reduce growing or harvesting projections very much beyond normal seasonal changes, and demand has remained strong throughout COVID.

Ostrom Mushroom Farms of Olympia, WA., has reported frustrations because the company was in the process of moving production about 220 miles away to Sunnyside, WA., where an all-new workforce had to be trained under trying circumstances.

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Peruvian Asparagus Imports are Headed for Peak in September

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U.S. imports of Peruvian asparagus arrive year-round, but peak supplies are expected beginning in September and continuing through the end of the year.

Importers say volume will be flat to slightly lower, in part because of COVID-19 stresses on labor and transportation.

Crystal Valley Foods of Miami, FL imports Peruvian asparagus from Peru year-round, although it typically peaks in the fall from September/October through December.

The USDA reports the four-year volume compound annual growth for Peruvian asparagus from September through January is relatively flat at 1.6 percent.

Southern Specialties of Pompano Beach, FL is receiving lower volumes from Peru compared to the same period last year, with blame pointed at the COVID-19 virus. However, the company has seen volume pick up in August.

Through mid-July, U.S. imports of Peruvian asparagus were 28.5 million pounds, down 40 percent from 48.4 million pounds.

Alter Produce of Calexico says the actions of the Peru government related to COVID-19 could affect the flow of product the balance of the year, because there is no real clear answer. The import outlook is really up in the air depending on how the Peruvian government decides to deal with the pandemic.

But the bottom line is Peruvian growers will be forced to harvest their fields, otherwise they will miss the window before Mexico comes in with big volume in early 2021.

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Washington and Oregon Potato Shipments will be Down

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Northwest potato shipments will be down this season from Oregon due to drought, and from Washington state because of too much rain. The COVID-19 virus also plays a role.

Washington and Oregon rank second and third, respectively, among the 50 states in potato production, with processing accounting for as much as 90 percent of shipments. Demand is reported strong, for both processed and fresh product.

An estimated 80 to 85 of Oregon grown spuds go to processing, and the hard hit foodservice industry has affected all potato growers in the Northwest and the nation.

Riverside Potato Inc. of Merrill, OR reports no snow pack, and a lack of rain resulting in 300,000 to 330,000 acre feet of water being cut to 140,000. The result is the company estimating it will be down 30 to 35 percent in potato acreage in the valley this season.

Riverside will ship product from 200 to 250 acres this year, compared to 550 to 580 acres a year ago.

Wong Potatoes Inc. of Klamath Falls, OR reports drought conditions were worse than any since 2006. Last season, the operation planted over 900 acres, compared to this year, which totals a little over 600 acres.

To the north in the Columbia Basin, along the Washington-Oregon border, rainfall wasn’t a problem, but acreage likely will be down, according to Potandon Produce of Idaho Falls, ID.

Overall, Potandon sees its fresh potato loadings basically being down, although volume might be up slightly in August. However, September and October, product coming out of storage will definitely be up lower.

In Northwest Washington, Valley Pride Sales of Burlington, WA has had too much rain.

The USDA says production in 2019 totaled 11.6 million pounds, compared to 11.3 million in 2018. Potatoes in storage accounted for 17 percent of 2019 production, compared to 18 percent a year earlier.

Oregon production in 2019 totaled 2.82 million pounds, compared to 3.02 million in 2019. Potatoes in storage accounted for 14 percent, unchanged from the previous year.

Northwest region potatoes remaining to be shipped out of storage on June 1, 2020, totaled 5.3 billion pounds. 

June 1 potato stocks in Oregon totaled 403 million pounds. Shipments to date was 2.41 billion pounds. In Washington, June 1 potato in storage totaled 1.97 billion pounds. Loadings to date totaled 85.6 million cwt., or 9.6 billion pounds.

Nationally, the 13 major potato states held 7.5 billion pounds on June 1, 2020, down 4 percent from last year.

Potatoes in storage accounted for 16 percent of the states’ 2019 production, compared with 17 percent for a year earlier. 

Potato diggings have just got underway, which is normal.

Following Labor Day, growers will be putting some product in storage and still pack out of the field. Packing out of the field continues until October 10. Potandon will finish on a Friday, packing old crop, and start a new crop Monday or Tuesday and continue on with the crop out of the field. The company then switches into storage and continues to the next July.

South Basin Packing of Gresham, OR notes the crop is coming along for shipments to retailers, although foodservice is certainly down due to the COVID-19 pandemic.

Norman Nelson Inc. (Double-N Potatoes) of Mount Vernon, WA reports acreage in the Skagit Valley, whose season will start around September 1, appeared to be about normal. Acreage is expected to be similar to a year ago.


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