Washington Monthly - Why Are Farmers Destroying Food While Grocery Stores Are Empty?

For many Americans, grocery shopping has become an intensely stressful experience. To maintain social distancing, people must queue before entering stores. Once inside, they must scramble to find increasingly scarce products, including household staples from milk and eggs to pork and beef. Others can no longer afford to go to grocery stores. Instead, they wait for hours to get goods from food banks that are also running short on supplies.

But in a seeming paradox, farmers are destroying their products—including many of the same goods that stores lack. Dairy Farmers of America, the country’s biggest dairy co-op, has called many of its members and instructed them to dump their milk. The cooperative has estimated that farmers are now dumping up to 3.7 million gallons of milk per day. Sanderson Farms, a chicken processor, smashes 750,000 eggs each week. Farmers have been plowing their produce into the ground.

How is it that Americans can face shortages, and in some cases go hungry, while farmers face a glut so large they’re deliberately wasting food? A number of recent stories have noted that America’s food supply chain has proven unable to adjust to the new COVID reality. In particular, food processors and distributors that serve shut-down commercial customers, like restaurants, aren’t able to retool in order to send food to retail outlets like grocery stores, where demand is high. But that just begs the question: why is the supply chain set up in this now obviously risky way?

Decades of consolidation have made food systems more vulnerable, say experts. Beginning in the 1980s, the federal government allowed more agribusinesses to merge and grow largely without restraint in the name of efficiency—before, antitrust and other policies helped keep these industries decentralized and competitive. Consequently, a small number of giant, often vertically integrated, firms, produce and distribute the bulk of food in the U.S. Their hulking and specialized supply chains are not so efficient in the face of disruption.

Dairy Farmers of America, for example, now controls 30 percent of all raw milk in the United States. (I wrote about consolidation in the dairy industry for the Monthly here). In the meat industry, roughly 50 factories process 98 percent of the nation’s beef. The same holds for pork: Following industry consolidation in the late 1980s and 1990s, the portion of U.S. hogs slaughtered in massive, million-head capacity plants rose from 38 percent to 88 percent in just two decades.

Losing even one of these large plants can rattle entire livestock markets (as ranchers saw when a fire took out a Kansas beef plant this summer).

Read the full article here.