Canada needs to become more secure by becoming more self-sufficient. In a new series — Strong & Free: Shockproofing Canada — the Post examines how a country made wealthy by globalization and trade can also protect itself against pandemics and other unknown future shocks to ensure some of our immense resources and economic power are reserved for our own security.
The thing about a good, sturdy supply chain is that nobody pays much attention when it’s working. “The supply chain is boring, until things go off the rails,” as one food economist put it this week.
And things have been off the rails for a while now. The empty grocery store shelf has become a symbol of all the fear and frustration caused by a society tipped upside down by a global pandemic, with people baking rather than celebrating the start of barbecue season, hoarding toilet paper and buying even dusty canned food off shelves.
But for the people who pay close attention to the national food supply chain, empty shelves aren’t that big or scary a problem. The more complicated problems are expected in the near future, as the system encounters bottlenecks in production caused by potential labour shortages at farms or virus outbreaks at processing plants.
Those issues sound like coronavirus-specific problems, but some of the underlying weaknesses were there beforehand and they can be fixed in time for the next crisis. But they really don’t have much to do with the recent rash of empty shelves at your local grocer.
Empty shelves, while frustrating for consumers, are easy to figure out.
Food producers, processors and retailers use historic buying data to forecast future demand, then make and buy enough product to meet that expected demand. But their models aren’t made to anticipate a massive global pandemic that drastically alters the eating habits of an entire civilization, shutting down almost every level of the food-service industry and forcing most people to cook for themselves.
People are shopping for more groceries rather than dining out. They’re stocking up on staples and filling freezers. And it took food processing plants and distribution centres a few weeks to catch up with that change in demand, hence the empty shelves.
The alternative would mean having to pay more for products so that manufacturers could keep big inventories on hand “just in case the world shuts down,” said Michael von Massow, a food economist at the University of Guelph in Ontario.
Having complete food security is an expensive trade-off, considering these once-in-a-generation crises happen, well, once in a generation. The food supply chain has weathered the recent panic-buying surge pretty well, all things considered.
“I ate an avocado yesterday,” von Massow said. “While we did have some empty shelves for a short period, the system is catching up and we’ve come through it.”
But as the panic buying calms down, new challenges are emerging. Farmers are grappling with whether it’s worth investing millions in seed, fertilizer and fuel when they’re not sure they’ll be able to afford the labour needed to harvest their crops, according to the Canadian Federation of Agriculture.
The Canadian agriculture industry is heavily dependent on migrant workers from Mexico and the Caribbean. Those workers are exempt from a travel ban on international visitors to Canada, but farmers will have to pay to house those workers while they are quarantined for two weeks after arriving. The extra cost could bust budgets for farmers, who are already stretched incredibly thin.
In a few months, we would normally see a lot of fresh Canadian produce coming onto the market, I believe that’s in jeopardy right now
Canadian Federation of Agriculture president Mary Robinson
“In a few months, we would normally see a lot of fresh Canadian produce coming onto the market, I believe that’s in jeopardy right now,” said Canadian Federation of Agriculture president Mary Robinson. “I am so nervous to say that because we don’t want to create any sense of panic. We know that right now we’re in good shape for food, but my focus is more on the marathon.”
To make sure similar issues with migrant workers don’t happen again, the federation wants the federal government to have an emergency plan in place that helps farmers cover the cost of bringing in such labour during extraordinary circumstances. Hiring more Canadians is a no go, since most don’t want to do what is often back-breaking work.
In a report to the Senate last summer, the Standing Committee on Agriculture and Forestry called on the federal government to address shortages in the temporary foreign worker program. Among the committee’s recommendations were a smoother, cheaper application process for foreign workers and a way to prioritize permanent residency requests from migrant workers in agriculture.
Such solutions could play a role the next time the food system enters what Evan Fraser, director of Guelph’s Arrell Food Institute, calls the second phase of crisis management, which is when the supply chain starts to adapt to a large part of the food-service industry going dark almost overnight.
There is an entire supply chain set up to service restaurants, and redirecting all that food to grocery stores isn’t as simple as it sounds.
“All that milk that was being sold to Starbucks is no longer being sold to Starbucks,” Fraser said. “So the dairy industry is going, ‘Oh man, what are we going to do? We’re going to have to dump all this milk and figure out how to sell all this extra milk into other parts of the food chain.’”
Milk dumping has been happening in the United States as well. The only difference in Canada is that it has supply management, the controversial system of controlling the output of eggs, dairy and poultry to keep a steady supply on the market and insulate the sector from price swings.
This week, some Canadian scholars and industry insiders suggested that the dairy, egg and poultry industries would be worse off without supply management, though that doesn’t necessarily mean Canada should expand the system.
The milk dumping started this month as demand suddenly shifted following the mass closure of restaurants and schools. But von Massow, the University of Guelph food economist, said it isn’t because people are consuming less dairy. They’re just consuming it differently.
We eat more cheese in restaurants than at home, he said. And we drink more milk at home than in restaurants. It will take time to adapt to those shifts in consumer buying, to line up new packaging, gear up some production lines and gear down others.
“Gearing down is much quicker than gearing up,” von Massow said. “In the interim, we have excess milk.”
Some provincial dairy boards, including those in Ontario and British Columbia, said they were ordering farmers to dump milk on a rotating basis this week, thereby spreading the burden around the entire industry.
“In the bad times like this, they share the pain,” said Bruce Muirhead, a University of Waterloo history professor who specializes in supply management and holds the Egg Farmers of Canada Chair in public policy.
And that’s a lot better, he said, than what happens in the U.S., where dairy farmers are on their own.
Since milk is expensive to transport, dairy processing operations are typically close to the farms as well as the populations they serve. If the processor down the road “suddenly decides he doesn’t need your milk, then basically you’re screwed,” Muirhead said.
But Sylvain Charlebois, director at Dalhousie University’s Agri-Food Analytics Lab in Halifax, argued the cost of the dumped milk will be passed onto consumers. At a time when millions of people are out of work, dumping litres of raw milk “is just unacceptable,” he said. “People are outraged.”
Charlebois wants to outlaw milk dumping to force the dairy supply management system to look for more innovative ways to manage oversupply, and to loosen the rules so that dairy farmers themselves can explore new methods of handling such surpluses.
“This is a recurring problem,” he said. “Dumping is easy. There’s no incentive to look at other options. That’s why you make it illegal … so you force stakeholders to sit down and figure out a long-term strategy.”
When workers get sick with the virus, it’s going to spread really fast and that whole facility is going to go dark
Evan Fraser, director of Guelph’s Arrell Food Institute
The Canadian government has also been under some pressure to boost the domestic food processing sector, which has migrated south over the past several decades.
In its Senate report last summer, the Standing Committee on Agriculture and Forestry called on the government to expand its “supercluster” program to further develop the agrifood sector.
One federally funded supercluster is already focused on developing a domestic industry to process dried beans, peas and lentils into plant-based meat alternatives, similar to Beyond Meat products, which is made from yellow peas that are often grown in Canada but processed in France or U.S.
“We say processed food is bad. That’s way too unsophisticated,” Fraser, at the Arrell Food Institute, said. “Processing often adds value, adds shelf life, and almost all food needs some level of processing.”
Washing, sorting and packaging are forms of processing, so is an apple pie factory and a cannery. But since the original North American Free Trade Agreement agreement, much of the Canadian processing sector has moved to the U.S., in part because its longer growing season means plants can stay operating much longer than they can north of the border.
“If we had more processors, so if one processor goes down because some of the guys get sick on the line, then it’d be easy to shift some of that processing facility to another place,” Fraser said. “When you’ve got these large processors and one goes down, it’s really hard to balance that off.”
Concerns are also mounting across the processing sector about plant slowdowns or closures if companies run out of personal protective equipment or employees test positive for COVID-19.
“It’s really hard to do social isolation at a food-processing facility. They’re so optimized for space, that actually trying to separate out the workers is really challenging,” Fraser said. “When workers get sick with the virus, it’s going to spread really fast and that whole facility is going to go dark.
For example, Maple Leaf Foods Inc. closed its poultry plant in Brampton, Ont., for cleaning on Wednesday after three employees got the virus. Pork and poultry processor Olymel LP in March closed its plant in Yamachiche, Que., after nine staff tested positive.
Sudden processor shutdowns can cause backlogs and problems, just as sudden spikes or declines in consumer purchases during a crisis do.
Gauging changing processor needs is why the board of the Chicken Farmers of Canada (CFC) will convene next week over the phone to discuss how many chickens the system will be able to handle in the coming days. It will be a roundtable of sorts, with 14 members representing chicken farmers in each province, as well as the chicken processing sector and the food-service industry.
“It’s like a little model UN,” CFC spokesperson Lisa Bishop-Spencer said.
If processing plants can’t take the chickens, farmers won’t be able to hold onto them. The birds will keep growing, forcing farmers to euthanize some of their flock or have overcrowding in their barns.
It takes about six to eight weeks to raise a chicken. The hatcheries need to know in advance how many chicks the farmers want for the coming eight-week cycle. And the farmers need to know how many chickens the processing plants have the capacity to cut up.
The upcoming cycle is from mid-May to early July. Back in February, the CFC set the chicken supply for that cycle at a total of 285 million kilograms of live chickens.
But at next week’s meeting, the board will discuss whether that total will need to be reduced, Bishop-Spencer said.
Industry representatives said concerns about the processing capacity in poultry are still in the hypothetical stage, with plants in the middle of contingency planning for every what-if scenario so they can keep operating.
That’s just one sector.
As the summer nears and the crisis continues, the strengths and weaknesses in the national food system will start to come into sharper and sharper focus, Fraser said.
“That’s where things get most interesting.”