COVID-19 Pandemic and its Influence on Food Supply Chains
AAEA members release new research in AEPP
Early in the COVID-19 pandemic, stay at home orders and restrictions on non-essential business activity essentially all but ceased the operations of foodservice establishments. Fresh produce farmers who typically sell to restaurants, schools, hotels, workplace cafeterias, and institutions were not able to easily switch market channels; so food slated for foodservice was discarded or donated to food banks. COVID-19 exposed a critical lack of resilience in the food supply chain, namely the lack of ability to reallocate output moving off the farm between foodservice and retail channels.
In the new article “COVID-19 and Food Supply Chains” published in the Applied Economic Perspectives & Policy, Lauren Chenarides, Mark Manfredo, and Timothy Richards from from Arizona State University show how firms can increase their value by maintaining the flexibility to market fresh produce into either foodservice or retail channels.
Richards says, “We find that the lack of resilience that we document could have been avoided if firms in the U.S. fruit and vegetable supply chain had invested in flexibility, or the ability to move distribution quickly between the retail and foodservice sectors. We show that these investments make financial sense, given the likelihood of another shutdown of this sort.”
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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.
Contact: Allison Ware
Senior Communications Manager