Posts Tagged “Keeping It Fresh”

Keeping It Fresh: We’re All in This Together

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By Steve Hull, ALC Portland

2021 continues to be a challenging year for so many. Those of us in the logistics world have been working long hours and dealing with unprecedented upheaval in the transportation space. We know, from our discussions with so many of our shipper and carrier clients that you all are working just as hard.  We’ve all been missing out on chances to get together and collaborate in person during this time. We’ve missed out on attending some produce-focused trade shows in person, including the United Fresh convention and Expo along with PMA Fresh Summit. Those in-person opportunities that we once maybe took for granted are something very special. One of the things missed was the opportunity to talk about and ask for help with one of Allen Lund Company’s core Acts of Kindness, Navidad en el Barrio.

Since 2004, the Allen Lund Company has been offering assistance including freight shipments to Navidad en el Barrio. First established in the 1970s by former LA Ram’s kicker Danny Villanueva, the non-profit collects money and food for the underserved Hispanic communities in Southern California. ALC first assisted with the transportation of groceries that were included in food bags that are distributed to every family. In the early days, those food bags did not contain any perishable food items, such as fresh produce. Recognizing the strong relationships that ALC has with the growers in California, Navidad en el Barrio asked ALC to help make those food bags much more nutritious. Beginning in 2006, fresh fruits and vegetables became a consistent part of each food bag.

Critically during this pandemic, the need for assistance is as high as ever. Navidad will provide meals to approximately 10,000 families this year! We are asking for any growers/importers/suppliers who are looking to step up and make a difference in the lives of so many deserving families in Southern California by making donations of nutritious perishable foods. In the past, through the generosity of companies such as Rainier Fruit, Wada Farms, Grimmway Farms, Wonderful Citrus, Mission Foods, and Coca-Cola, we’ve been able to help provide fresh fruits, potatoes, carrots, avocados, bottled water, and juices as well as many other available seasonal products for the food bags.

Since we didn’t get the chance to ask you in person this year, we are asking now virtually. We need your help! Christmas is fast approaching, and we are currently working on lining up donations for the 2021 distribution that will take place in early December. Please, reach out to either me at steve.hull@allenlund.com, or ALC Marketing & Communications Director Nora Trueblood at nora.trueblood@allenlund.com if your business can help. We appreciate your participation.

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Keeping It Fresh: Food Demand and Market Conditions

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By Doug Plantada, ALC Los Angeles

Imagine you’re walking down your local produce aisle, looking to cross some fruits and veggies off your list, and you notice something is a bit off. The lemons are a little smaller than usual, watermelons have a slightly different look to their rind. Your favorite Hass avocados aren’t quite as meaty and you can’t put your finger on them but their shape is different than you’re used to as well.

As food demands increase as a result of Covid-19 and the natural disasters of the past two years, this exact experience is becoming more common as imports of fresh produce have risen dramatically across the country. In 2021, U.S. imports of fresh vegetables from January through May were at $4.88 billion, up 4% compared with 2020.

Of the many diverse commodities grown in the United States, onions are one of the hardest hit by import increases, up 14% at $221.1 million this year. Typically, onion imports would support the industry by providing supply during the off-season, but mid-February freezing temperatures in South Texas significantly reduced yields for onion crops, and that has translated to higher prices this year.

Onion shippers are looking to imports to make up for lost crops, which according to Dante Galeazzi, president, and CEO of the Texas International Produce Association, estimates point to damage of 20% to 30% of crops in 2021. In order to maintain control over market conditions in cases like natural disasters and the increased demand due to the pandemic, the USDA has historically agreed with producers/shippers to create something called a “Marketing Order.”

Marketing agreements and orders are initiated by the food industry to help provide stable markets for dairy products, fruits, vegetables, and specialty crops. Each order and agreement is tailored to the individual industry’s needs. Marketing Orders are a binding regulation for the entire industry in a geographical area and are approved by the producers and the Secretary of Agriculture. In short, Marketing Orders would allow onion growers in Texas to promote their products by collectively influencing the supply, demand, or price of particular varieties of onion.
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Doug Plantada has been with the Allen Lund Company for two years and is currently a broker in training at the Los Angeles office.

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Keeping It Fresh: California’s Seasonal Drought

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By Milagros Aredo, ALC San Francisco

Seasonal droughts in California have become more frequent and severe in recent years. However, what California is experiencing right now has everyone who is involved in agriculture concerned. California is the largest grower of US fresh produce.

There are over 69,000 California farms and ranches that are being affected that supply over a third of U.S. vegetables and two-thirds of its fruits. To keep up with demand, these farmers rely heavily on their regional water availability which is a huge challenge today. In the farming valleys of California, an ongoing drought is impacting both the production and price of the crops. With scarce water, farmers are being forced to rip out their trees and produce early because of drylands and high temperatures. This is a tough business decision for them because it affects their seasonal production and becomes more costly to replant and regrow.

For example, California almonds harvesting accounts for about 80% of global production. Almonds require more water to thrive on and if they lack moisture a 25-year investment can be ripped from the ground. To keep their farms from ruins, growers are searching more for underground water resources.

They are drilling depths of 1000 feet for water to sustain thirsty citrus, fruits, and pistachios which adds costs and takes away farmland from production. They’re also exploring other possibilities such as dry-farming techniques that rely less on water. Farmers are stuck between scaling back and prioritizing growing low value vs high-value crops and how much of them should be planted.

To produce as much as possible, farmers are planting crops closer together in an attempt to make the root structure denser and keep moisture in the soil. They also focus on crops that require less water. Tree crops like avocados that are highly water-intensive have gone up by 10% in retail price from last year. The water crisis is causing a short food supply in retail.

Certain commodities at grocery stores are lightly stocked to empty and shoppers are seeing inflation on prices because of this. Vendors are shifting where they grow and sell things to help increase production to keep the commodities affordable and readily available. Having no control over the weather, growers will need to continue to find more ways to adapt and find supplemental water in order to supply 400 key commodities to millions of Americans.

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Milagros Aredo is a senior transportation broker with ALC San Francisco, CA. Milagros has six years of experience in logistics and graduated with a double major in International Business and Marketing from USF.

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Keeping It Fresh: Keeping up with Demand

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By Matt Baldwin, ALC, Winchester

Throughout the course of the pandemic, there have been shortages in many of the food products that we consume daily. One of the main food groups that have been in higher demand in recent times has been meat and poultry.

With recently renewed coronavirus restrictions at many processing plants, concerns have been raised that another meat and poultry shortage may be on the rise. In our Winchester, VA office, we work with some of the largest food processing companies in the United States. With understaffed processing plants due to the impacts of the coronavirus pandemic, the food supply chain for many of these companies has been lacking.

With all of the issues currently facing supply chains in our country, it is our job to make sure that we are working as efficiently as we can with our carriers to get meat and poultry on the shelves for our customers. Here’s how we do it.

One of the most important aspects of hauling perishables is working with a carrier that you can trust, with good equipment, experience, and an understanding of how things may go.

With meat shortages being a major concern for grocers across the country we need to make sure that the product gets to the final destination in perfect condition. One of the first things that we look for when potentially working with a carrier is if they have any history hauling high-value products. The more experience they have, the less likely they are to experience any potential problems. Asking them a few important questions to make sure they are the right carrier for the job is also essential.

We want to know the year of the reefer unit (needs to be 10 years or newer), the condition of the air chute, if they have the necessary load locks and straps to keep the product secure, and if the reefer unit is downloadable in case there are any temperature discrepancies at delivery.

These questions help us and the carrier make sure that the transaction goes as smoothly as possible from start to finish. Preparation and communication are both keys when transporting perishables.
Having strong relationships with carriers is imperative just like with any other product, but when hauling perishables, the carrier must be also aware of the challenges that processing companies face.

These companies are experiencing major delays with loading times, leading to carriers being frustrated, which can further complicate the supply chain. We have experienced that when you make sure the carriers you work with are fully aware of what to expect from start to finish when hauling the load, things generally tend to go more smoothly. The last thing that we want is to have a carrier hand a load back while at the pick-up location because they did not know what to expect. When the carrier knows what they may be up against, they generally don’t get upset when delays are excessive, because they know that they can trust our word and that we will do the best we can for them at the end of the day.

With coronavirus restrictions at processing plants ramping up, these issues don’t seem like they will be going away soon. It is important that we work with our carriers to do the best we can for our customers in these difficult times. We need to be understanding of the current circumstances and do what we need to do to get the job done. Our mission is to serve our customers to the best of our abilities, and the only way to do that is to work with our carriers as a team.

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Matt Baldwin is a transportation broker with ALC Winchester, Va. Baldwin will be transferring to ALC Charlotte, NC to work on-site at McCall Farms. Matt has five years of experience in logistics and graduated with a marketing degree from Rutgers University.

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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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Keeping It Fresh: It Never Rains in Southern California

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By Iyer Amruthur, ALC San Antonio

Lush leaves, warm waters, flourishing flora, are just a few of the things that come to mind in a picturesque way when one thinks of California. But California is not just a “start-all, end-all” vacation spot. Coastal California actually has a lot more to do with you than you think.

Do you enjoy complete and balanced meals? Of course, you do! It’s important to maintain your body and keep yourself properly hydrated and hit all the food groups. Fruits, vegetables, meat, dairy, grains, are all main staples but chances are your fruit didn’t come from a couple of miles down the road, it more than likely came from one of our powerhouse produce states.

Just to name a few: Texas, Florida, and California. These three states play a big role in getting those delicious dinners and popping picnics to come together. Did you know California by itself produces more cash receipts from produce than the entire Mountain/Pacific region states combined or that about half as much comes from Texas, which has 86% of its land [ocregister.com]used for agricultural production?

While this is fantastic for our country to have so many geographic options for crops, sometimes those regions come with a bit of a headache down the road. As you know historically, California has experienced drought from the early 2000s to today, and if you’re a Texas resident you know we’ve been feeling the same. What does that mean at the end of the day for our nation?

Let’s step back for a second and have some breakfast, and figure things out. As you may have heard one of the trendiest foods incorporated into breakfast this side of the decade has been avocados, maybe you’ve seen them aesthetically spread onto toast.

Along with many other functional foods, avocados have almost doubled in price (complimented with far more than double the demand) since a few years ago. Unfortunately, that breakfast might be a little bit more expensive on the west coast now. California is one of our nation’s leaders in producing avocados.

In 2014, California’s last notable drought [businessinsider.com[businessinsider.com] top exports such as avocados, berries, cruciferous vegetables, i.e. cauliflower, cabbage, kale, as well as grapes, and lettuce rose in price anywhere from 17 to 62 cents depending on the product.

It’s not all bad news, we can look at some silver linings while we wait on the clouds to come back and rehydrate our fields. Texas shares a similar palette on many in-demand produce products with California and has seen a recent increase in exports of avocados to pick up the slack left behind.

According to data from the USDA [data.ers.usda.gov] website, avocado demand grew from 155,379 ($1000’s) in December 2020 to 231,835 in Jan 2021 and 315,128 by March of the same year.  Many times, when we see a lack of a commodity in one area, we’ll look to grow it somewhere else, or import it.

Texas has the perfect climate for avocados, and also controls some of the main border entries for Mexico, which exports billions of dollars worth of avocados [agmrc.org] every year to us. This new entry point/origin for produce shifts the freight market as well to create demand for trucks in Texas while decreasing the demand in California.

To sum things up, when it starts to “Never rain in [Southern] California” we see the whole nation shift their focuses on backups, imports, and inevitably higher costs. So be sure to avoca-do yourself a favor and pick up some delicious guacamole ingredients while we wait out this drought and get produce to your state from wherever its’ freshest!

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Iyer Amruthur is a business development specialist in the Allen Lund Company, San Antonio office and has two years of logistics experience. Iyer attended The University of Georgia where he obtained a Bachelor’s Degree in Marketing, with a minor in Communications.

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Keeping It Fresh and Balanced

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By Matt Sarko,Transportation Broker, ALC Cleveland

Since the beginning of last year, the increase in the cost of freight has not only impacted the transportation industry but the economy as a whole. Transportation costs are now at an all-time high as drivers and trucks are currently in short supply.

Food prices rose 3.9% in 2020 and the U.S. Department of Agriculture anticipates another 2% to 3% increase for costs in 2021. The increase in transportation prices is primarily due to the shortage in drivers causing trucking companies to increase wages to attract more employees.

Additionally, the market is experiencing a shortage in semi-conductors, which is keeping new trucks from coming on the market and has since exacerbated the issue.  The increase in transportation costs only adds to the supply chain problems for growers, suppliers, and retailers as they are still experiencing the effects of congested ports as well as the winter storm, which both continue to have widespread impacts across the U.S.

Furthermore, the rise in the price of fuel is also a major contributor to the inflated freight costs. As a result of these supply chain complications, retailers have begun raising prices on a number of different goods in order to offset the shortages and transportation costs. “The rise in transportation prices affects everything from the farmer and the tractor, to the fertilizer and even the plastic hamper you put the product in.”

With the supply chain in disorder, we will continue to see a rise in the price of consumer goods. Moreover, the cost of transportation will ultimately affect the prices of publicly traded companies such as Bed Bath & Beyond and General Mills, considering they have alerted investors about these problems on their earnings call.

For transportation brokers like ourselves, taking advantage of the spot market whenever possible might be the best way to combat the losses taken on contractual year round rates as freight prices continue to rise, and to also keep important products, produce, and perishables moving across the country.

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Matt began working fulltime for the Allen Lund Company in August of 2020 as a transportation broker for the Cleveland office. He originally started working his summer breaks during college as a broker’s assistant for the office. Matt joined the company with a degree in Finance from John Carroll University.

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Keeping It Fresh: What a Difference a Year Makes

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By Matt Minthorn, Manager, ALC Phoenix

It is safe to say that the first quarter of 2020 was nothing that anyone in society had experienced in the past.

On January 9th, 2020 the World Health Organization (WHO) announced a mysterious Coronavirus-related pneumonia in Wuhan, China. Most of the rest of the world didn’t pay much attention and we were all going about with our lives totally unaware of the drastic changes to come. By January 20th, the CDC reported that three U.S. airports would begin screening for Coronavirus, JFK International, San Francisco International and Los Angeles International.

Then on January 21st, a Washington state resident became the first confirmed case of Coronavirus after returning from Wuhan, China.  On January 23rd, Wuhan, China went under quarantine as well as nearby Huanggang, putting 18 million residents under strict quarantine.  As we all know, things rapidly progressed from there. On January 31st, the WHO issued a global health emergency for only the sixth time in history.

February 2nd saw global air travel restricted from certain countries and required testing or quarantine before passengers could leave for their destinations. February 3rd the U.S. declared a public health emergency. Cases continued to rise around the globe and fear began permeating society. On March 11th, the WHO declared COVID-19 a pandemic, stating the alarming level of spread and severity as well as the alarming levels of inaction to prevent the spread.

On March 13th, President Trump declared it a national emergency allowing billions of dollars of federal funding to be allocated to fight the spread. On the same day he issued a travel ban on non-U.S. citizens traveling to the U.S. from several European countries. 

On March 19th, California became the first state to issue a statewide stay-at-home order mandating all residents to stay home except to go to an essential job or shop for essential needs. This led to many sectors of the economy coming to a grinding halt and consumers mass buying essential (or not so essential, toilet paper?) items, stripping shelves and throwing the retail supply chain into chaos. This trend followed across the nation as state after state began issuing the same stay-at-home mandates. 

My home state of Arizona followed on March 20th, thus all non-essential business halted and the state was on a semi-lockdown. Lines at grocery stores, home improvement supply stores, pharmacies and Costco in particular were insane and shelves were quickly bare.  Providing food and essential items suddenly became vital to keeping society fed and supplied with the items necessary to adequately prevent spread of the virus and care for those that were unfortunately afflicted with COVID-19.

There was a tremendous decline in the need for transportation in the non-essential sector of the economy and a large increase in those essential businesses. However, struggles emerged throughout the supply chain to maintain the extreme level of production that demand was driving.

Entire production facilities were shut down due to cases and exposures, normal production schedules and timing was pushed out farther and farther and there became an excess in carrier capacity due to these circumstances as we moved into April. Average freight rates across the country took a nose dive and hit lows that we hadn’t seen in years.

Carriers began to run out of operating funds and a vast number of carriers ended up out of business over the second quarter of 2020.

So where are we today, a little more than a year after the first stay-at-home mandates were issued? Most states have re-opened fully or are close to resuming life as close to “normal” as possible.

In relation to the freight market, increased manufacturing and demand for all types of products has increased steadily as states reopen. The recent severe weather has also drastically affected freight demand and rates in most of the U.S. Spot rates for vans are currently up 34% over 2020 through February and reefer spot rates are up 28.5% in the same period nationwide.

Last March there was still a higher level of demand as restocking was driving the market with much more volume. April saw a tremendous decline in demand and saw rates drop to levels seen during the manufacturing recession of 2016.

Our comparable data for rates April 2020 versus this year will likely be even more dramatic than our current numbers, likely up 40% year over year. In the majority of the domestic fresh produce industry, we are approaching our peak seasons from several regions, including California and Arizona.

Rates will continue to be firm and demand for capacity from these regions will spike as we move through the second quarter. Shippers can help assure capacity by having flexible schedules, increased lead times on tenders and most importantly, understanding of the current market conditions when working with their carrier and broker partners. No one could have predicted the last year in perishable transportation, but we’ve all learned how to adapt and excel in this “new normal”.  

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Matt Minthorn is the manager of the Phoenix office. He was previously the assistant manager, refrigerated department Boston office, and has been with the Allen Lund Company for 19 years. Minthorn is a graduate of the University of Vermont with a degree in business administration and has 20 years experience in produce sales and transportation.

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Keeping It Fresh: From Sprout to Store

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By Iyer Amruthur, Business Development Specialist, ALC San Antonio

Guanajuato, Michoacán, Puebla, Jalisco, and Sonora. What do these names all have in common, despite possibly being unknown to you as an average consumer?

They combine to account for most of the 31,900 hectares (98,595 acres) devoted by Mexico for broccoli farming. 70% of the product ends up being sold to primarily the U.S., followed by Canada, Japan, and some European countries as well.

It is also the main export of Guanajuato. So, why does this matter?  Just like you, I buy my broccoli from HEB here in Texas (although you may have a Kroger, Publix, or even Walmart in your areas). It’s one of the many year-round vegetables my family enjoys. And recently if you’ve caught the news, the weather has been pretty awful for us in Texas.

Inevitably, especially with border shipments, we see adverse weather throw hurdles into the logistics game. At times the border even shuts down, to the dismay of both the U.S. and Mexico. Some 16,000 trucks pass through the border town of Laredo, TX every day, and this accounts for 37% of all our trade between the U.S. and Mexico.

As you can guess, when those 16,000 trucks can’t move, it’s going to create some big delays! How does this affect you? Many people end up confused as to why weather in Texas causes some stores to run out of broccoli, hike prices, or have older product in places like Chicago.

While we have many sources of produce, our nation’s grocery stores aim to hit between the best price and the best quality which sometimes means an import! As you must have heard, not just Laredo, but most of Texas shut down its highways and freight came to a standstill. Even at my local HEB, you can see a reduced selection of fruits and vegetables at higher prices.

Grocery chains work hard to do whatever it takes to make sure you have what you need when you enter the store, and nothing exceeds the urgency of perishable goods. Here at ALC we work with our grocery customers to smooth things out. There are things we can do as a team, that are difficult to do from a company’s in-house logistics.

We can navigate the massive amounts of information, rescheduling, constantly shifting prices/supply of trucks, arrange transportation from other sources around the country and put it together in a fashion that provides an immediate solution. During poor weather conditions, 3PLS are some of the last doors that close, and with our expertise and resources, we can even provide solutions remotely.

Weather is Mother Nature’s way of throwing us curveballs and we strive to be able to react to our customers’ needs. Our goal is to ensure the consumer can count on fresh quality products available in their local stores no matter the weather in Texas or Chicago.

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Iyer Amruthur is a business development specialist in the ALC San Antonio office and has two years of logistics experience. Iyer attended The University of Georgia where he obtained a Bachelor’s Degree in Marketing, with a minor in Communications.

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Keeping It Fresh: USDA Farmers to Families Food Box

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By Nick Rooney, Transportation Broker, ALC Orlando

As the pandemic continues to move its way through the world, we are still navigating how to get through each day. Businesses closing, hair and nail salons shutting down, gym memberships across the globe now unable to be used.

Money has become scarce for some, food being one of the most difficult supplies to have in abundance in many homes. Food insecurity in households with children under 18 has increased by about 130 percent from 2018 to May 6, 2020, leaving millions to worry about their next meal. The Farmers to Families Food Box has done an amazing job helping the millions of families in need during these times of hardship.

This program was built as a way to deliver food to families in need, not letting food go to waste, and helping farmers and ranchers stay in business. The Farmers to Families Food Box program purchases fresh produce and other goods directly from distributors of all sizes across the nation, from local to national. Distributors package these products into family-sized boxes, then they are transported to food banks, community and faith-based organizations, and other non-profits serving many families in need across the nation.

This is also helping to ensure our logistics system across America remains in a healthy balance by keeping freight moving and carriers in motion.

During the first round of obtaining produce and goods, beginning May 15 and ending on June 30, 2020, an astounding 35 million boxes were delivered in just the first 2 months. Round five started on December 21, 2020 and is scheduled to conclude at the end of April.

The Farmers to Families Food Box program has now provided over 133 million boxes to families in need so far since its inception. With round 5 in play, Farmers to Families has received over 6 billion dollars in funding, keeping companies running, employees paid, and most importantly, families fed.

The product provided is not limited to any specific commodity, for round 5, the USDA will purchase fresh produce, dairy products, fluid milk, meat, and seafood. This product assortment is just one example of why funding for boxes has been sporadic in cost throughout the year, markets are still alive and adapting causing rates for certain products to reach high dollar amounts, this isn’t stopping the millions of Americans pulling together to help each in need.

The year 2020 provided some of us with a different perspective on daily life and what it means to be in need. I suggest we take a step back and start looking at families and friends within our communities to find struggles and needs that we can try to help with. With everything going on right now, some need food, others may need a friend or someone to talk with, you can truly make a difference in someone’s life this year.

I will strive to make an impact in my community throughout this year starting with donations made to my local food bank. Farmers to Families has opened my eyes to a struggle that I truly thought was being handled here in America. Seeing that there will be more families in need within the coming year, I hope more programs like this one are put into place.

Nick Rooney began working for the Allen Lund Company in October of 2019 as a broker in training for the San Francisco office. Nick then joined the Orlando office in August of 2020, continuing his path to become a broker. As of January 2020, Nick is a transportation broker and manages produce loads for the Orlando office.

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