Phase several Supply Chain – having a Message by A Dairy Farmer….

•Phase One was retail. •Phase two was distribution. •Phase three was the space between processing/manufacturing in addition to distribution. •Phase four was raw material supply to manufacturing. •Phase several is actually consumer packaging capacity, in addition to bulk storage inventories.

Most Americans were not aware food consumption inside the U.S. was a 60/40 proposition. Approximately 60% of all food was consumed “outside the home” (or food away by home), in addition to 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 in addition to amusement food sellers in addition to many more. Many of those venues are not thought about when people evaluate the overall U.S. food delivery system; however, This kind of network was approximately 60 percent of all food consumption on a daily basis.

The ‘food away by home‘ sector has its own supply chain. Very few restaurants in addition to venues (cited above) purchase food products by retail grocery outlets. As a result of the coronavirus mitigation effort the ‘food away by home’ sector has been reduced by 75% of daily food delivery operations. However, people still need to eat. that will means retail food outlets, grocers, are seeing sales increases of 25 to 50 percent, depending on the area.

♦ Phase several – The retail consumer supply chain for manufactured in addition to processed food products includes bulk storage to compensate for seasonality. As Agriculture Secretary Sonny Perdue recently noted “there are over 800 commercial in addition to public warehouses inside the continental 48 states that will store frozen products.”

Here is actually 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; in addition to nearly 662 million pounds of frozen pork.

This kind of bulk food storage is actually 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 This kind of in addition to smoothing out any peak/valley shortfalls. There are a total of 175,642 commercial facilities involved in This kind of supply-chain across the country

Few Americans are aware of This kind of.  However, that will stored food supply is actually the supply-chain for food manufacturers who process the ingredients into a variety of branded food products in addition to distribute to your local supermarket. that will bulk stored food, in addition to the subsequent supply chain, is actually entirely separate by the fresh food supply chain used by restaurants, hotels, cafeterias etc.  For almost 8 weeks the retail supply chain has been operating beyond capacity in addition to the burn rate of raw food products is actually 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; in addition to (2) the food supply chain will be a big part of President Trump’s decision-generating on reopening the economy thereby re-opening restaurants, cafeterias, etc…. in addition to switching consumption back to fresh supply.

This kind of “bigger picture” is actually not being considered by politically-minded governors, DC politicians, in addition to public health-centric advisors who focus exclusively on the virus.

Additionally, there are very specific issues within each supply chain (commercial in addition to consumer). This kind of is actually 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. This kind of’s the supply chain, there are only so many jug fillers, all were running 24/7 before This kind of cluster you-know-what.

today demand for jug milk has almost doubled.  However, restaurant demand is actually almost gone; NO ONE is actually eating out. 

Restaurant milk is actually distributed in 2.5 gal bags or pint chugs; further, almost 75 percent of milk is actually processed into hard products in This kind of country, cheese in addition to butter. Mozzarella is actually almost a third of total cheese production; how’s pizza sales going right today??

A bit of history – Years ago (40+) every town had a bottler, they ran one shift a day, could ramp up production easily.  today with all the corporate takeovers (wall street over main street) we are left with regional “high efficiency” milk plants that will ran jug lines 24/7 before This kind of mess, no excess capacity.

Jug machines cost millions in addition to 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; in addition to so far there is actually NO guarantee they will get paid. Milk must be processed within 48 hours of production in addition to 24 hours of receipt inside the plant or This kind of goes bad. Same with generating This kind of into cheese in addition to butter, in addition to 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; in addition to cheese is actually sold in 10 to 20 pound bags (think shredded Mozzarella for pizza).  Furthermore, This kind of is actually not legal with This kind of end of the supply chain to sell direct to consumers in most states.

Take cheddar cheese for instance; This kind of goes by mild to sharp to crap in storage. Butter, frozen, only stores for so long in addition to then must be slowly thawed in addition to processed into various other uses as This kind of gets “strong”.  At Organic Valley we cook This kind of 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 in addition to is actually processed in season; canned or frozen.  The supply is actually 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%+) in addition to restaurant sales are almost nonexistent.  Fresh produce out of U.S. season comes by Mexico (different climate).  I’m talking sweet corn, green beans, peas, tomatoes, all veggies are seasonal inside the USA.  Fresh, out-of-season, row crops are  imported.  (There are exceptions, like hydroponic grown, however modest amount of total).

Someone mentioned “time to raid all those bins of corn”.  Those bins on the farm contain yellow corn, cattle feed in addition to totally unfit for human consumption, today or at harvest.

Eggs? Same problem.  Bakeries in addition to 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 in addition to only so many packing machines.

Industrial bakeries in addition to processors of packaged food buy bulk liquid eggs, no carton at all.  Also in many states This kind of is actually illegal to sell This kind of supply-chain directly to consumers. 

On your standard buffet of any size, do you genuinely think they boil eggs in addition to peel them? They come in a bag, boiled in addition to diced; those nice uniform slices of boiled egg you see on your salad, a lot of them come in tubes boiled in addition to extruded at the same time, just unwrap in addition to slice. Your scrambled eggs come in a homogenized bag on most buffets.

Another example of Main Street being gutted in addition to “much better by wall street” NO local egg processors available or many modest egg producers either, all corporate in addition to huge, contracted to sell to the corporate masters.

This kind of is actually a warning the same problems exist in all supply chains.

The supply chain is actually farked.

David Osterloh,
61-year-old dairy farmer

Source : Phase several Supply Chain – having a Message by A Dairy Farmer….