Recipient Organization
IOWA STATE UNIVERSITY
2229 Lincoln Way
AMES,IA 50011
Performing Department
Economics
Non Technical Summary
Parts of U.S. food supply chains have been severely disrupted by COVID-19. Closures and slowdowns in packing and processing plants have resulted in a backlog of millions of animals that are ready for harvest, while shifts in demand for pork, beef, eggs, and dairy have created shortages at the retail level and excess supply in other areas of the supply chain. For hogs, this situation has forced some producers to euthanize animals. The carcass value of beef and pork has risen due to an economy-wide scarcity of meat. This situation has broken the traditional relationship between live animal and meat prices. Similarly, egg producers who sold into the liquid market have euthanized laying hens, and dairy farms and processors in some areas have been forced to let milk go to waste. Further along the supply chain, companies that distribute and transport meat, eggs, and dairy are operating below capacity due to high absenteeism among workers. The decreased amount of food making it into the retail stores has prompted retailers to increase prices and ration supplies to avoid stock-outs.The rationale and significance for this project are clear, and are echoed in our interactions with industry stakeholder groups, including producers, processors, and retail systems: the COVID-19 disruptions implicate and puts at risk occupiers of many levels of the U.S. food supply chain. Without quick, novel, and science-based direction, it is likely to repeat this fall if the pandemic returns.We have a short window of opportunity to create information our supply chain partners can use to alleviate the challenges and prevent future disasters in the U.S. food supply chain. Given this, our short-run objectives focus on developing and making available data visualization tools to help firms at critical levels of the supply chain alleviate the problems they return. Our long-run objectives focus on exploring the risk-return tradeoff of changes to each system--vis-à-vis investments in labor and technology--to improve its resilience in the face of future disruptions.Our project is an integratedinvestigation into four of the Midwest's key agricultural supply chains--pork, beef, eggs, and dairy--thatcombines data-driven analysis with interviews of participants along each product's supply chain to better understand how supply chains performed at the onset of COVID-19 disruptions and the stress-points in the supply chains. This information will be used to ultimately provide guidance and cost/benefit type analyses of supply chain improvements. The industry interviews are critical to providing context and robustness to the short- and long-run data-driven analyses, and both the interviews and analysis fully integrate into the long-run objectives of this project.
Animal Health Component
60%
Research Effort Categories
Basic
20%
Applied
60%
Developmental
20%
Goals / Objectives
Project GoalThe over-arching goal of our project is to enhance the resiliency of the beef, pork, dairy, and egg supply chains by providing evidence of the activities, mechanisms, and investmentsthat will allow them to be more resilient in the face of future COVID-19 or similar disruptions.We do this byproviding data-driven analysis and decision toolsto aid processors, producers, and retailers within these sectorsand as they contemplate the the necessarily systemic changes to their supply chains. Our goal is two-fold:Address the short-run, urgentneeds of the supply chains for beef, pork, dairy, and eggs by evaluating the experiences and immediate impacts to these industries from the COVID-19 disruptions, including supply- and demand-side shocks.Based on the short-run experiences and outcomes, explore the longer-term solutions available within these supply chains that enhance their resiliency using both supply chain agility and flexibility.Project Objectives1. Explore in-depth how the beef, pork, dairy and eggsupply chains functioned throughout the major COVID-19 periods and are functioning currently relative to pre-COVID experiences.2. Differentiate between the market and supply chain structures of these foods to identify characteristics that helped and hampered their efforts to cope during the disruptions.3. Establish and quantify the key drivers of these disruptions and impactsduring the COVID-19 pandemic, particularly the shift to food-at-home (FAH) from food-away-from-home (FAFH),4. Develop dynamic decision aids and data visualization tools stakeholders in these supply chains can utilize to predict bottlenecks and warn of disruptions, and5. Create case-studies of the supply-chain experiences and impacts to educate consumers, stakeholders, and future work in this area.
Project Methods
Our project is an integratedinvestigation into four of the Midwest's key agricultural supply chains--pork, beef, eggs, and dairy--thatcombines data-driven analysis with interviews of participants along each product's supply chain to better understand how supply chains performed at the onset of COVID-19 disruptions and the stress-points in the supply chains. This information will be used to ultimately provide guidance and cost/benefit type analyses of supply chain improvements. The industry interviews are critical to providing context and robustness to the short- and long-run data-driven analyses, and both the interviews and analysis fully integrate into the long-run objectives of this project. The methods we use include case-study investigations and analytical modeling approaches, each used to a different degree and for a different purpose depending on the supply chain.Common Methodology for All Supply Chains: Industry Interviews We use semi-structured interviews with grocery retailers, including management and buyers, to understand the stress-points in the supply chain. A robust case-study methodology is used to develop new knowledge about the responses and consequences of the COVID pandemic on pork, beef, egg, and dairy supply chains. The case study will offer insights into supply chain resilience. For example, external supply chain challenges and opportunities are difficult to identify by individual firms, but research suggests that engaging firms in collaborative discussions enables external supply chain integration. The case study methodology will engage stakeholders to better understand how both internal and external supply chain integration improved supply chain resilience.The case study results are used to evaluate multiple objectives in simulation models. The objectives could include cost-benefit analysis, system shock analysis where the model receives a shock similar to what was and is being experienced by the COVID pandemic, and resilience analysis to determine how quickly the system can return to pre-disruption operations.Beef and Pork Supply Chains Our investigational approach to the beef and pork food supply chains is similar and two-fold: focusing first on the immediate short-run analysis and information that will help processors and producers make decisions, and second by analyzing the longer-term strategies available to them to adjust more quickly between food-at-home (FAH) and food-away-from-home (FAFH) demand swings, and also put in place resiliency-enhancing measures at the processing and producer level.We will link existing pricing, production, and processing data for beef and pork to develop pricing and margin tools to signal when adjustments in processing capacity are needed, thereby giving the supply chains valuable adjustment lead time. This correlates with our short-run objectives. Longer-term objectives focus on identifying the bottlenecks created in the short-run, proposing solutions to alleviate these, and analyzing the proposed solutions for feasibility.Dairy and Egg Supply Chains Our focus is on analyzing the demand shocks processors faced from the FAFH to FAH shift. Pricing, production, and processing data--specifically the price transmission mechanism from processing to retail and changes in retail demand--are key elements. We know from our team's engagement with industry partners that the experiences of some retailers were more positive than other retailers, and we purport that key differences in processor-to-retail supply chains created these differential experiences. Our short run objectives include an exploration of the features of the retailer-specific supply chains that led to some retailers faring better than others, and tracing this back to egg processors and dairy processors. This is a data- and engagement-driven exercise, and for this we will rely on interviews with industry, including our advisory group members from these industries, and proprietary firm-level data they contribute.EffortsPork and Beef Supply Chains The decision aids described in the "Products" section will be publicly available online at ISU's Center for Agriculture and Rural Development (CARD) and Ag Decision Maker websites. The decision aids will include accompanying information files (as PDF) to explain to users how to interpret the results and to provide data sources. Collaborators will also present this work and findings at producer- and industry stakeholder workshops via the normal extension channels and create white papers and summaries for trade journals as a means to extend the findings. A case study for each supply chain will be developed for educational and industry purposes.Dairy and Egg Supply Chains We envision two primary efforts: 1) development of educational/extension materials for producers, processors, and consumers to highlight the costs and benefits of proposed changes to food supply chains, and 2) development of case-studies that can be incorporated into supply chain and agricultural economics courses.EvaluationOur extension efforts for beef, pork, dairy and eggs, including the developed outreach materials and decision aids, will ultimately be evaluated by industry stakeholders. We measure this through engagement on public sites they are posted to, by requests to present findings at industry meetings, and through direct feedback.The Center for Agricultural and Rural Development (CARD) at ISU has developed and published several tools of the type proposed here. CARD employs a full-time data scientist to create and implement these tools. As they are made publicly available, we can measure unique hits, time spent on the site, and geographic origin of the query. Similarly, Ag Decision Maker, an ISU Extension and Outreach online repository for ag extension outputs, provides tracking of downloads and unique visits. These metrics will be part of our annual reporting to measure reach and knowledge change.Iowa State University Extension and Outreach employs three of the six investigators and has resources to conduct formal evaluations to measure impact from extension activities, including workshops and programs. We will utilize their platform for gathering information about the distribution of our extension materials (knowledge), actions they took as a result of our insights, and how their conditions, if at all, are expected to change as a result of our findings.Our proposed timeline includes milestones for engagement with multiple levels in the supply chains of beef, pork, dairy, and eggs: producers, processors, and retailers. We are actively engaged with these stakeholders and expect monitoring and evaluation to be ongoing.