Short-term solutions and quick action helped supply chain in pandemic’s early days

Cows standing side by side eating hay

 

By Mya Kidson

Short-term solutions and quick action helped Canada’s dairy and poultry sector weather the early days of the COVID-19 pandemic, say U of G researchers.

U of G Profs. Mike von Massow and Alfons Weersink, and MSc student Brendan McDougall from the Department of Food, Agricultural and Resource Economics, say that poultry and dairy supply chains adapted quickly to the demand shifts from hospitality to retail sectors.

These approaches include diverting the food supply from food services to the retail sector. A single-desk seller — a feature of supply managed commodities such as dairy and poultry — coordinated these shifts in needs.

The researchers say that from a short-term perspective, these approaches have improved the resiliency of these commodities, mitigated supply shortages and curbed financial loss.

"These food sectors can normally adapt to changes in consumer demands quickly,” says Weersink. “But the shuttering of the hospitality sector was a dramatic change that took some time for the supply chains to adjust."

Limitations in restaurant offerings — with businesses either remaining closed, opened limited hours and offering takeout and delivery options — has meant a lack of demand for food normally supplied to these businesses. 

Demand shifted from restaurants to grocery stores, because more people are cooking at home. And although panic-buying still occurs, grocery stores have taken measures to limit sales on some items to ensure products are distributed fairly to consumers.

This demand shift hasn't led to a shortage of food in production; rather, it’s altered how supply chains operate to accommodate temporary demand-based shortages in grocery stores, says von Massow.

The solution to this issue has primarily been to pool resources and collaborate. However, that’s come with its share of challenges — there are different distributors for both hospitality and retail sectors, and packaging systems are different.

Von Massow notes that a single desk system may have allowed the sector to more quickly respond to this particular disruption to the system. It allowed for the redirection of product within existing relationships rather than individual farmers having to find new customers for their milk or chicken. This is a more direct and rapid approach to distributing food to grocery stores.

And in addition to reducing temporary demand-based shortages, short-term changes have also reduced disruptions related to factory closures in the event of outbreaks. The ability to divert food to other processors gives producers more flexibility.

“The dairy and poultry industries seem to be adapting well right now," says von Massow. "And although we're uncertain what the long-term effects will be on the Canadian dairy and poultry sectors, we are hopeful that the food industry will adapt.”

The pandemic has highlighted points of weakness in the food system and enabled industry stakeholders to find solutions that will prevent these disruptions in the future. 

This article is based on a report from von Massow, Weersink and McDougall in the special edition of the Canadian Journal of Agricultural Economics. Access the report here https://onlinelibrary.wiley.com/doi/10.1111/cjag.12240

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