In the middle of this pandemic, milk is poured down the drain and vegetables are plowed over. There is huge demand for the these groceries, so what is happening to the nation’s agricultural sector during the Wuhan Coronavirus crisis?
Cooking Up A Storm
Every day, dairy processing plants are pouring away 3.7 million gallons of milk. One plant flushed 31,000 gallons of milk into a lagoon, while a Wisconsin plant disposed of 30,000 gallons in one day. That’s not all. Farmers are expected to euthanize about ten million pigs. Growers are burying millions of pounds of onions, smashing tens of thousands of eggs, and plowing ripe vegetables into the soil.
The nation’s largest farmers have no place to sell their products. What’s because a large portion of crops is sold to restaurants, schools, and other food-service enterprises. With the COVID-19 pandemic shutting down these places, there is no buyer for half of their produce.
A decade ago, eating out overtook eating at home for the first time. Today, Americans are now eating more of their meals at home. But more of the population consuming home-cooked meals is not enough for two reasons. The first is that households have different meal preferences – people love onion rings, but they do not know how to cook them at home. The second is that they cannot absorb all the perishable food that was planted a couple of months ago for companies and schools. Dairy organizations are so desperate that they are encouraging pizza shops to increase the amount of cheese on each slice.
So, why not just sell to shops? At many of the country’s processing plants, the equipment is designed to meet the needs of restaurants and schools. For instance, a dairy processor may have machinery to package shredded cheese in large bags for restaurants or fill small cartons of milk. It would require millions in new investments and time for these plants to tailor operations to retail, and the sector does not think it is worth the headache. Even if businesses wanted to change, they would probably need to reverse the changes if everything returns to normal.
It might break your heart to see milk or eggs being destroyed as people starve in Venezuela or Africa, but it shows the incredible wealth of the United States when so much food can be thrown away without the people starving.
Food producers are unsure if this is a permanent trend or a blip on the radar. With this uncertainty, companies will not modify their operations to adapt to these changing conditions. If people are staying home and permanently opting for a nice meal in their humble abodes, businesses will quickly revamp their facilities and shift their business models to ensure they are meeting these new needs. That is how the free-enterprise system works.