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Marrone Bio Innovations: As America comes to a halt, farmers head to the fields to ensure a safe and reliable food supplyqrcode

Apr. 13, 2020

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Apr. 13, 2020
By Kevin Hammill, Chief Commercial Officer, Marrone Bio Innovations

Less than two percent of Americans live on a farm today.  Yet, the oft-forgotten farmer has become top of mind for the American consumer who worries about a reliable and safe food supply during the current COVID-19 pandemic. Streets are empty, schools are closed, and restaurants boarded up. America is in a crisis.

While most harbor at home, our farmers continue to tend to the crops and animals, doing their part to ensure a safe and reliable food supply for consumers here and around the world. Now, more than ever, we need a highly functioning and safe agricultural system.

In an open letter, Zippy Duvall, president of the American Farm Bureau and a Georgia poultry, cattle and hay producer, wrote: “Empty shelves can be frightening, but empty fields and barns would be devastating. Times like these should remind us all of the importance of ensuring our nation’s food security. While many retailers are scaling back and temporarily closing for public health, agriculture remains on call 24/7.”1

Hector Marsical, a crop consultant, agronomist and pest control advisor (PCA) based in California, echoed that sentiment. “Production schedules are being executed as planned, with high regard to safety and human life.  Growers are one piece of a large equation that encompasses an intricate web of professionals that want to service the needs of the world through the delivery of superior fruits and vegetables.  The agriculture industry is in good hands.”

As a provider of plant health and biological crop protection products, we at Marrone Bio Innovations (MBI) have developed a unique viewpoint of the agriculture supply chain. We work with a multitude of crops throughout the country: the almond and produce industries here in California; the potato growers, apple orchards and greenhouse operators of the Pacific Northwest; the corn and soybean growers of the Midwest; and the specialty vegetable and citrus growers of the East. Our work spans the country and, therefore, so does our understanding of America’s agriculture system.

The coming months feel a bit uncertain for many Americans. However, farmers are entering a critical period for their business. Fruit and vegetable production will be ramping up and millions of acres of row crops, such as corn and soybeans, will be planted over the next 60 days.  I want to share some observations as to what’s happening at the farm level, and how our customers, American farmers, are ensuring a stable food supply.
 
Employee Safety

Worker and food safety during the production and harvest processes are always critical, especially in times such as these.  We are helping our customers provide much-needed worker safety throughout the COVID-19 crisis with our recently acquired Jet-Oxide 15% sanitizer. It’s an EPA-approved post-harvest industrial sanitizer for use against human coronaviruses. Growers, greenhouse operators, packers, shippers and food manufacturers can use Jet-Oxide 15% to sanitize industrial food and agriculture hard surfaces and kill the coronavirus. At a time when so many feel helpless against this disease, we are proud to offer customers a solution that can protect their employees and prevent the spread of this awful virus.
 
Specialty Crops


Florida is in the midst of the growing and selling season for spring crops, such as vegetables, berries and citrus.  In areas like Oregon and Georgia, orchard crops – including fruit and nut trees – as well as berries are pushing buds or flowering.  In California, leafy greens are in production, and planting for other vegetable crops, such as processing tomatoes, are under way.  Bud break, the first step in the growth cycle of grapevines, is well in hand in places like Napa Valley.

Almonds

Marrone Bio Innovations has a strong relationship with the California almond industry because we provide orchard growers with a suite of products for fungal and insect control, as well as heat stress.  After speaking with several almond growers in the last few weeks, we know the crop is off to a good start. Almond trees have bloomed and bee pollination is in progress.

The health of the almond industry is not only important to our business but to the state of California. According to the state’s Almond Board, 80 percent of the global almond crop is grown in California and the crop is one of the two top crops in terms of value in the state. In 2018, California almonds were valued at $ 5.47 billion.2

Both almond processing and farm operations are keeping pace with normal operations, according to Stuart Woolf, Marrone Bio Innovations board member and president and CEO of Woolf Farming and Processing, a family-owned producer and processor of agricultural commodities, including almonds and tomatoes.

Mr. Woolf notes that his company has an adequate supply of almonds for processing, including value-added specialty items for customers.  Almonds are ubiquitous in the grocery store – from snacks to cereals to almond milk – and finished goods are on hand to keep products stocked at retail.

Access to agriculture input supplies has also remained steady, as suppliers generally build inventories in anticipation of the needs in the cycles of the growing season, he added.  Mr. Marsical confirmed: “In any year, growers are maximizing the processes of procuring their seed, fertilizers, herbicides and pesticides.  A year like this underscores the forethought needed to have your inputs on hand.”

What’s not normal, Mr. Woolf points out, are the adjustments being made to comply with the Centers for Disease Control (CDC) guidelines to further ensure worker safety and health.  Farming today is highly mechanized, even for planting seedlings such as tomatoes.  As a result of the coronavirus outbreak, steps have been taken to spread the time between shift changes and opting for individual instruction rather than group meetings before employees go into the fields at safe distances.

Potatoes

Keith McGovern, a Marrone Bio Innovations board member and president of R.D. Offutt Farms, has initiated similar practices for the company’s potato farming, food processing facilities, and dairy operations. “We’re likely doing more disinfecting of tractor cabs and the like, as well as following the CDC social distancing recommendations, while maintaining our normal workflow,” he said. “With Midwest planting of the potato crop set for early April to May, the primary objective right now is to keep everyone as healthy as possible for the upcoming planting season,” Mr. McGovern added.

Prior to the coronavirus outbreak, the 2020 acreage for the processing potato crop was expected to increase, as weather events in the United States and Europe last year tightened supply. Mr. McGovern noted, however, that the most recent forecasts are showing acreage will now be down by 10-to-20 percent compared to prior expectations. The sudden COVID-19 closures of restaurants, schools, universities and more have resulted in lower than expected demand for processed potatoes. The result has been a substantial reduction in the planting forecast.

He anticipates that any acres not planted in potatoes will be rented to neighboring corn and soybean farmers.  In the upper Midwest, some corn farmers were not able to harvest their 2019 crop because of poor weather conditions. By renting land in 2020, they can plant corn on the leased property first.  This gives them time to remove what remains of last year’s crop on their own properties, and then put in soybeans, which are planted later than corn.

Mr. McGovern’s company also produces its own potato seed stock.  Weather conditions over the winter and into early spring look favorable to get into the field on time or even a bit early in the Midwest.  Potatoes already have been planted in the Columbia River basin in the Northwest.  Suppliers and distributors have been contacted to ensure all the agriculture inputs needed are on hand through June, with back-up plans in place.

“The need for inputs and how they’re used is weather dependent,” Mr. McGovern said.  “The current COVID-19 crisis won’t change the way we farm.  We will continue to use products with lower levels of active ingredients and transition to softer products that are more sustainable.”
 
Row Crops

Row crop farmers are tracking the weather as much as any other factor affecting their operations this time of year. Maintenance on farm machinery is under way or complete.  It takes only a few dry days and warm soils to move the planters quickly through the fields to take advantage of an optimal planting window, as soybean and corn yields respond positively to early planting.

Going into the 2020 season, growers will benefit from the warmer than usual winter.  Topsoil and subsoil moisture in the major corn and soybean growing states is more than adequate.  A surplus of precipitation could lead to some soggy conditions ahead of preparations for spring planting.

While extreme wet weather in the 2019 growing season severely affected the acreage that went into production, the 2020 outlook is for corn and soybean acres to rebound significantly.  The U.S. Department of Agriculture (USDA) recently released its March 31 Prospective Plantings Report, and growers intend to plant 97 million acres of corn, up 8 percent from 2019 plantings.  If realized, the USDA noted that this would be the highest planted acreage since 2012.  Soybean acreage intentions show a 10 percent increase, to 83.5 million acres.3


For additional perspective, you can view 20-year historical planted and harvested acreage charts for soybeans here and corn here.

Beyond weather, commodity prices will be the other factor determining the corn-to-soybean planting ratio.  While both corn and soybean prices have declined in the last month along with other commodities, the severity of the decline has been less than that of the S&P 500.  Most interesting is the change in the trend line for soybean prices, which have moved out of step with corn prices and are down 0.7 percent since February 19, compared with a 9 percent drop for corn.4

Continued divergence of soybean and corn pricing will affect the marginal acreage shift between the two crops.  Part of the recent price difference can be attributed to the closing of ethanol facilities as oil prices have plummeted.  Roughly 40 percent of the U.S. corn crop is used in ethanol production.  The available export markets for grains, and China’s ability to meet its Phase 1 trade obligations, also will affect futures prices and crop production plans.5
 
Agriculture Inputs

Seeds, fertilizer, pesticides and herbicides to service the 2020 planting season are well in place either in the distribution chain or already on farm.  This includes seed treatments from Marrone Bio Innovations, which are used predominantly on soybeans.

Agriculture retailers are using a variety of tools and CDC-prescribed precautions to ensure growers continue to receive the products and services they need for the upcoming growing season.  “Unlike many businesses, it’s simply not an option to shut down agriculture,” Tennessee Farmers Cooperative CEO Bart Krisle said in a message to his customers.  “Farmers have animals to feed and crops to plant, and these activities require a reliable source of quality products and dependable services on a timely basis.”6

The timing of agriculture input sales has shifted closer to the growing season given that some supply was still in the distribution channel after the 2019 planting.  On-farm storage space is limited, so it’s important that agriculture suppliers have the right materials on hand at critical junctures to move them on farm. Rapid response is an agricultural norm, as farmers need to be prepared to move quickly as favorable weather conditions or disease and pest pressures emerge.
 
Labor

Both Mr. McGovern and Mr. Woolf note an ongoing issue with access to an adequate labor pool in agriculture.  Mr. McGovern said, “The question will be whether the potential for an outbreak is different for urban areas compared with rural areas, where people are naturally socially distanced.  Providing this holds true, we will be able to get the crop in the ground.”

“The heaviest labor requirement in California will be in the early July time frame for harvesting,” Mr. Woolf added.  “Labor intensity varies by product and timeframe, and the greater risk is always for the more labor-intensive crops.”

In 2019, more than 250,000 immigrant workers were approved under the H2-A temporary agricultural worker program.  The H2-A program fills the gap when there are not enough domestic employees available for temporary or seasonal agricultural work.  The situation remains fluid, and the U.S. State Department has made temporary adjustments to some of its processes to ease the flow of guest workers in support of the agricultural industry.  For example, renewals will be issued to workers who are eligible for interview waivers if they have received the visa in the past and been interviewed within the last year.7

At the same time, our tight-labor market has drastically changed in a few short weeks. Unemployment claims surged by 3,000% in March8 and we recently learned that 6.9 million people filed for first-time unemployment claims during the week ending March 28 – a record-breaking number.9 Projections state unemployment will continue to rise for several weeks, if not months. The Federal Reserve Bank of St. Louis anticipates 47 million Americans may lose their jobs, pushing the unemployment rate to more than 25 percent, a level not seen since the Great Depression.10

The dramatic shift in the job market will certainly impact agriculture. Will H2-A temporary agriculture worker programs cease so Americans can fill those jobs? It’s unclear now but we can look to other parts of the world for how they’re responding to the issue. In France, the Agriculture Minister made a plea to the public: those that were unemployed should make themselves available to farmers.11
 
Transportation


As borders close to non-essential travel and the flow of workers is in flux, we are seeing the continued movement of cargo across borders and that’s good for American farmers, who exported $137 billion worth of agriculture products in 2019.12 Agriculture trade is an important part of the U.S. economy and keeping our borders open to facilitate that trade is essential to the long-term health of our farms and food system.
 
Changing Consumer Buying Behaviors

While the agriculture production side of our food supply chain remains intact, it is the demand and distribution side of the equation that has changed dramatically.  Institutional customers, such as schools and universities are closed indefinitely.  In many areas, the hospitality industry has come to a near-halt; restaurants are shuttered and large catering events such as weddings, conferences and more all canceled. Foodservice suppliers and distributors have been significantly impacted over the last three weeks and we’re starting to see the ripple affect reach the grower level.

In Florida, growers of high-value specialty crops such as snap beans and tomatoes grown for hotels and restaurants are being forced to abandon harvest and till the crop under instead. Demand for their products dried up overnight and even donations to food banks has become difficult; most are full or have limited capacity to store perishable food. If a farmer doesn’t have a large-volume customer to take the product quickly, it will spoil, and the farmer will take a loss on the crop.13

On the retail side, consumers, who typically spent nearly 50 percent of their food-purchasing dollars outside the home14, are now spending nearly all their food-purchasing dollars in-home – preparing their own meals and stocking pantries accordingly.  The result has been a 34 percent increase in total produce sales for the week ending March 15 when compared with sales in the same week in 2019, according to the market research firm IRI.  Frozen fruit and vegetables and shelf-stable fruit sales more than doubled, and shelf-stable vegetable sales increased a whopping 200 percent.15

This sudden and dramatic shift in how food is being consumed will, no doubt, continue to impact our food supply chain. Distributors and operators are quickly adapting to new norms while farmers try to salvage crops that no longer have buyers. This is, perhaps, the area of greatest need today: creatively working to help the hospitality and foodservice industry adapt to these sudden and drastic changes in their operations and providing alternative sources of distribution to the farmers and food manufacturers that supply these industries.
 
Conclusion

The vast American agriculture system is, perhaps, the most diversified in the world. While the conditions of each region and crop vary, the needs remain the same: farmers require the right tools and people to get the job done. Despite the chaos of this COVID-19 crisis, our farmers remain focused on the task at hand: harvesting the early crops and preparing the fields for planting to ensure there is a safe and reliable food supply for all.

I hope you found this overview of production agriculture during the COVID-19 crisis insightful and I welcome you to join in our dialogue here or on social media (@MarroneBio, #BioUnite, #BioFocus). Also, please frequent the variety of third-party links provided in this article to stay up to date on the current trends in agriculture.

Over the coming months I will continue to share updates on what we’re seeing in production agriculture. In the meantime, if you have questions or would like to learn more about the plant health and biological crop protection products Marrone Bio Innovations provides, please visit our website at www.MarroneBio.com.

The entire team at Marrone Bio Innovations continues to work throughout this crisis help our customers, American farmers, get the job done. Together, we will continue to keep our food system the safest and most reliable in the world.
 
Sources:
1. Duvall, Zippey. “Farmers and Ranchers Rise to Call.” FB.org, American Farm Bureau Federation, 18 March 2020, https://www.fb.org/viewpoints/farmers-and-ranchers-rise-to-the-call1.
2. Almond Board of California. “Almond Almanac 2019.” almonds.com, Almond Board of California, http://www.almonds.com/processors/resources/almond-almanac.
3. “Prospective Plantings.” www.nass.usda.gov, National Agriculture Statistics Service, 31 March 2020, https://release.nass.usda.gov/reports/pspl0320.pdf.
4. S&P Chart Source: OANDA. https://www1.oanda.com/forex-trading/markets/commodities-trading
5. Wiesemeyer, Jim. “Phase 1 China Deal: What You Need To Know.” agweb.com, 16 January 2020, https://www.agweb.com/article/phase-1-china-deal-what-you-need-know.
6. Hopkins, Matt. “COVID-19: How Ag Retailers Are Stepping Up to Help Customers, Employees Amid the Coronavirus Crisis.” croplife.com, 21 March 2020, https://www.croplife.com/croplife-top-100/covid-19-how-ag-retailers-are-stepping-up-to-help-customers-employees-amid-the-coronavirus-crisis/.
7. Karst, Tom. “Department of State waives interview requirement for H-2A workers.” thepacker.com, 26 March 2020, https://www.thepacker.com/article/department-state-waives-interview-requirement-h-2a-workers.
8. Tappe, Anneken. “A 3,000% jump in jobless claims has devastated the U.S. job market.” cnn.com, 2 April 2020, https://www.cnn.com/2020/04/02/economy/unemployment-benefits-coronavirus/index.html.
9. Chaney, Sarah and Harrison, David. “New U.S. Unemployment Claims Totaled 6.6 Million Last Week.” wsj.com, 9 April 2020, https://www.wsj.com/articles/u-s-surge-in-unemployment-claims-expected-to-continue-11586424605?mod=hp_lead_pos1
10. Bogage, Jacob. “Coronavirus unemployment guide: What to do if you get laid off or furloughed.” washingtonpost.com, 3 April 2020, https://www.washingtonpost.com/business/2020/04/03/unemployed-coronavirus-faq/?arc404=true.
11. Barbière, Cé “COVID-19: France calls unemployed to work in fields as borders stay closed.” www.euractiv.com, 25 March 2020, https://www.euractiv.com/section/coronavirus/news/covid-19-france-calls-unemployed-to-work-in-fields-as-borders-stay-closed/.
12. Shahbandeh, M. “Total value of U.S. agricultural exports from 2012 to 2019.” statistica.com, 9 August 2019, https://www.statista.com/statistics/220767/total-value-of-us-agricultural-exports-since-2000/.
13. Frias, Carlos and Hall, Kevin G. “It’s catastrophic. Coronavirus forces Florida farmers to scrap food they can’t sell.” miamiherald.com, 31 March 2020, https://www.miamiherald.com/news/coronavirus/article241627101.html/
14. USDA Economic Research Service. “Food Prices and Spending.” ers.usda.gov, 2018, https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/food-prices-and-spending/
15. Nickle, Ashley. “More retail sales data show significant spike in fresh produce.” produceretailer.com, 24 March 2020, https://www.produceretailer.com/article/videos-article/more-retail-sales-data-show-significant-spike-fresh-produce-sales


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