With the coronavirus crisis wreaking havoc on a host of food and drink supply chains, here’s how 10 of the most-affected categories are holding up
1. Dairy
Dairy’s situation is “desperate” according to the NFU.
Social media videos of farmers pouring milk down drains is testament to the strife currently facing the industry, the result of the collapse in foodservice leading to both falling prices and tumbling demand.
With no support yet coming from Defra, many farmers will “seriously look at whether they can afford to stay in the industry”, says NFU dairy board chairman Michael Oakes.
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2. Coffee
Coffee farms across Africa and South America are feeling the strain of reduced work forces and strained logistics.
Farms in Brazil, Colombia and Peru are suffering from widespread lockdowns, reduced workforces, and hampered transport. While in East Africa, Kenya’s border closures are forcing Ethiopian producers to ship from the much more congested ports of Tanzania.
Unforeseen difficulties are also starting to creep in. India, for example, is the primary supply of hessian sacks for many global producers, but with the country now in complete lockdown, their supply has effectively been cut.
Coffee stocks in UK and Europe remain strong for now, but it may not be long before some origins start to drop.
Coffee supplies under strain as producing countries face coronavirus disruption
3. Flour
Empty flour shelves are now commonplace as locked-down Brits maintain their enthusiasm for home baking.
The collapse in foodservice has meant flour supplies remain plentiful, but the lack of packaging is causing increasing concern.
“We’ve run out of bags and can’t get the packaging to pack the goods,” says Phil Bull, MD at Eurostar Commodities, who believes it could be up to three to four weeks before more comes through.
Some food and drink manufacturers increased production by as much as 50% in response to customer demand, but many packaging suppliers are still struggling to keep up.
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4. Fruit and veg
A worker crisis is looming across Europe with growers facing a “crunch point” in May if lockdown measures remain.
In the UK, despite talk of a ‘land army’ and chartered flights from Romania, producers are struggling to see where the 80,000 required seasonal workers will come from. Soft fruit crops such as strawberries and plums will be the first to be hit, with 15,000 needing to be filled by the start of May.
The problem is just as acute in Italy and Spain, from where the UK sources much of its fresh summer produce. Italy’s decision to legalise 200,000 illegal migrants is a sign of the desperation facing the sector, while Spain has already turned from being a net exporter to a net importer on foods like asparagus.
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5. Rice
Export restrictions, stockpiling and currency fluctuations have created upheaval in global rice markets and volatile price surges.
Basmati rice supplies are cut off with India and Pakistan, the world’s only producers, both in complete lockdown.
Meanwhile Vietnam, the world’s third biggest rice exporter, replaced its initial export ban with a quota, however this was filled within three hours, according to local news. Hundreds of tons of rice are therefore now rotting at Vietnamese ports.
We are a long way from a global rice shortage and many supply chains remain robust, but fears of further disruptions are leaving many UK importers concerned.
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6. Beef
Beef markets are completely out of whack.
While Covid-19 has driven mass demand for minced beef among shoppers, premium cuts such as steak and hind quarter are being left behind. It is resulting in significant carcase balance issues exacerbated further by the loss of foodservice.
Supermarkets’ decision to source mince from Poland for the first time since the horsemeat scandal highlights the scale of the problem and caused fury among British farmers.
The issues could quickly start to affect prices, with the low margins on mince typically balanced out by selling more profitable cuts of meat. If this goes on much longer, farmers could struggle to cover their costs.
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7. Tinned tomatoes
Tinned tomato stocks were already low before Covid-19 hit and this latest episode certainly hasn’t helped things.
Unprecedented customer demand led to many weeks of empty shelves and the effects are being felt throughout the supply chain.
Italian suppliers have begun rationing retailers for fear of running out. Italy supplies more than three quarters of the UK’s tinned tomatoes each year but will be unable to replenish stocks until the summer harvest is completed.
Tinned tomato suppliers start rationing retailers as stocks run low
8. Tea
Lockdowns in India and Kenya are placing many of the world’s most prized teas under strain.
Most of the UK’s tea originates in Kenya, where a 21-day partial lockdown is currently disrupting the flow of tea from plantation to port.
India is the source of more specialised brews but the country’s three-week lockdown has already meant the loss of the first picking of Assam and Darjeeling, with a second round now also under threat.
“Many gardens are in deep trouble,” chairman of India’s Tea Board Prabhat Bezboruah told the FT.
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9. Seafood
Seafood companies across Britain are being forced to close as the fishing industry suffers the collapse of both foodservice and export.
The vast majority of British catch is normally exported to Europe and Asia, while the rest is typically sold in restaurants. The loss of both markets has dealt a particularly cruel double-whammy to Britain’s fishermen.
Prices have consequently plummeted, leading some fishermen to tie up boats simply to avoid landing catches that crash prices further.
While many businesses have remodelled to begin selling direct to customers, others require far greater support. It remains to be seen if the government’s £10m lifeline will cut it.
Seafood businesses close as coronavirus hits exports
10. Pork
British pork was one of the first foods to feel the effects of Covid-19.
As Beijing shutdown swathes of China including its ports, British food exports collapsed, causing supplies to build up in warehouses. The effects quickly filtered through to British pork production which relies on exports to China for carcass balance.
As cold storage neared capacity in March, it created a bottleneck in the supply chain that was not easily solved. Fortunately, with China now reopen for business, goods are starting to move again.
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