The global food supply chain is complex, vast, and vital to human existence. Not surprisingly, when there are disruptions to the food supply chain, it makes major headlines. These headlines come in all shapes and sizes, including disruptions due to food recalls, natural disasters, disease, and political unrest, among others.
Climate Change and the Food Supply Chain
In a new report from the Intergovernmental Panel on Climate Change (IPCC), climate change is examined through the lens of the global food supply chain. The biggest impact that climate change could have is on the food supply. Scientists estimate that for every 1 degree the planet heats up, the yield of staple cereal crops will decline by 10 percent. The latest estimates, unless the planet can lessen its reliance on fossil fuels and cut emissions, is more than a 1 degree increase in temperatures, which could prove to be catastrophic in the long run.
As the global food supply becomes more uncertain, economic and political uncertainty will make it difficult to do business in more and more nations, particularly third world nations. Companies will find themselves with more limited choices in where they source from; and shipping finished goods to these countries could also become more challenging.
Natural Disasters and the Food Supply Chain
Natural disasters and extreme weather events seem to be more common these days, which can be partially attributed to climate change. But when natural disasters strike, the food supply chain has many roadblocks to overcome. In the aftermath of a disaster, getting aid to the affected area is of utmost importance. As we’ve seen over the last few years, many areas, even when they try to stock up in advance of a storm, are sorely lacking in terms of basic supplies. Getting supplies into these areas can often be difficult, as roadways and rails are often compromised. Also, as with Hurricane Dorian in the Bahamas, the storm can destroy the supplies that are on hand. But the aftermath of natural disasters goes way beyond the initial rush of getting food supplies to victims.
Hog farms were also hit hard in the aftermath of Hurricane Florence. Hog farming in North Carolina is a $2 billion industry. Hurricane Florence took direct aim at the state’s hog farming counties of Sampson and Duplin, leaving farmers scrambling to take action. First, the farmers had to evacuate their animals to higher ground to ensure they would survive the storm. But there was another major challenge ahead of farmers – waste lagoons. Waste lagoon is the pork-industry term for a large pit containing the liquid and solid waste from these animals when grown in a confined feeding operation for slaughter. A number of these pits were compromised, polluting surrounding waterways. These contaminated waterways then need to be cleaned and run the risk of contaminating other crops in the area. In all, more than 6,000 hogs perished in the storm, raising the cost of pork due to a limited supply.
More holistic control towers are being developed to help deal with these kinds of risks. These tools help. But they don’t solve these kinds of problems. Rather, they just help companies mitigate these issues more effectively.
Epidemics and the Food Supply Chain
A third threat to the global food supply chain is the risk of airborne pathogens. In recent years there have been outbreaks of avian influenza and swine fever. Back in 2017, a chicken farm affiliated with Tyson Foods discovered a flock had been contaminated. The flock consisted of about 73,500 birds, which were used for breeding. As a result of the outbreak, the flock had to be destroyed. To avoid a full-on outbreak, all farms within six miles of the affected farm in Tennessee were quarantined. This included about 30 farms.
For food companies, this results in struggling to meet demand for their products, allocating how many products their customers can buy. Bigger and more important often end up getting a larger allocation, or even everything they have ordered. But despite the allocation game, the risk of disruptions to the supply chain is lost market share.
The Honeybee
Honeybees face an ongoing threat of colony collapse. Bees are critical to fruit and vegetable supply chains. There is a distinctive supply chain where beekeepers take their hives from farm to farm to pollinate the fields. A continued decline in the bee population puts the world in jeopardy of a food shortage and also leads to the kinds of supply/demand mismatches discussed above.
Final Thought
Because of climate change, all industries will face some new opportunities – the opening of the Northwest Passage to cargo ships – but in most industries the challenges will be greater than the new opportunities. But the challenges to the food supply chain in future decades are particularly daunting. While this article did not address the ethical issues, clearly for a large proportion of the world’s population, small price increases on staple foods for poor families can be crippling.
This article was cowritten with my colleague Chris Cunnane.
