Author: Hillary Kaufman

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Well, they are at it again.

The Bureau of Labor Statistics (BLS), the U.S. Department of Agriculture (USDA), and a host of other noted authorities have told us what we already knew: food costs continue to climb. Maybe not as fast as they were. But annual increases of around 10 percent still cause all of us a lot of angst. Is this the new norm?

Just how bad is it?

The BLS numbers regarding retail food price inflation really shouldn’t surprise anyone who buys food today. Food in March 2023 was 8.4 percent more expensive than food in March 2022, down from the 9.5 percent month-to-month increase seen in February.

Prices at the grocery store actually showed a slightly sharper decline, falling to “only” 8.4 percent after a February increase of 10.2 percent. It still sounds awful, unless you consider that annual food inflation peaked last summer at 11.4 percent.

The masochists among us can use the chart below to track where the cost increases hit us hardest. We’re all probably well aware of the headlines – eggs, cereals, beverages, all up sharply. 

Reading between the lines

The problem with statistics is – well, they are statistics. Cold, impersonal numbers and charts often don’t tell the story in a way we all can easily grasp and appreciate. But we all have a stake in these numbers. After all, U.S. consumers, government and businesses spent $2.12 trillion on food and beverages in 2021, at home and away from home.

We at Dirt to Dinner work hard to find the important news buried in all that data. But when we saw the latest round of numbers about food costs, we elected to look behind the numbers by revisiting some of the past reports we’ve done on the complicated food-price picture.

Back in June 2021, we picked up on some great reporting by the Toledo Blade that tracked the actual cost of a shopping cart containing 15 commonly purchased food products. The Blade captured the cost of the same items in 2003, 2008, and 2011.

We replicated the basket and added our own 2021 findings. We found a 10-year increase in the cost of the basket of 28.2 percent. We’re not gifted statisticians, admittedly. But the cost increase seemed pretty much in line with historic food price.

So what would it look like in 2023?  We conducted a quick survey to see how the cart costs lined up with the latest inflation figures. That same cart of groceries that cost us $44.96 in 2021 today clocked in at a hefty $55.61, or 23.6 percent more than just two years ago.

Big increases in prices of cereal products, sugary beverages, eggs, and coffee accounted for the largest share of the rise. Our quick look behind the numbers suggests that the dramatic events of the past three years managed to inflate our food costs almost as much as we saw in the entire 2011-20 decade.

By taking advantage of sales and promotions, however, we cut the cost of the 15 items by over $4, bringing the annual cost rise to an average of 7.3 percent. Our 2023 sample was significantly smaller than in 2021, so our findings can hardly be categorized as a rigorous statistical analysis. But as a snapshot of the price realities facing consumers, it seemed to align with the statistics provided by BLS and USDA’s Economic Research Service (ERS).

Are commodity costs behind the continuing increase?

The big question that emerged for us at Dirt to Dinner had less to do with the hard numbers than the causes behind them. What’s keeping the inflation engine churning when it comes to our food?

One of the more frequent questions posed by consumers involves the cost of the commodities that fuel our modern food system. Prices for basic crops, notably food grains and feed grains, soybeans, and many other cornerstone commodities, remain high, by historical standards. But they have declined from the exceptionally high levels seen during the pandemic and the initial portion of the Ukrainian conflict.

All that aside, commodity costs are far from the only cost element in our food.

What else drives food cost inflation?

The world continues to increase production of essential commodities such as corn, soy, wheat, and palm. But as various USDA commodity reports and market analysts note, those increases are matched by equally significant increases in demand, with constant pressure on the level of available stocks to contend with disruptions to normal cropping patterns or trade needs. We are simply not likely to see production outpace consumption at the levels needed to bring commodity prices back to historically low levels.

For every dollar spent on food, where does it go?

According to an ERS analysis by the National Farmers Union (NFU), farmers receive only about 20 cents of the $4.49 cost of a two-pound loaf of bread. Overall, across all major food categories, the farmer’s share of each food dollar is estimated at 14.3 cents. That’s actually a lower share of the food dollar than the 15.5 cents received in 2020 – prior to the pandemic and Ukraine conflict.

The food dollar also includes costs for all steps along the marketing chain – obvious things such as basic and secondary processing, food manufacturing, packaging, transportation, storage, and distribution. But it also includes the cost of finance, advertising, insurance, and all the other “hidden” costs that go into moving food from dirt to dinner.

Every step in the chain is subject to the same economic pressures. Energy prices also remain relatively high. Freight rates, insurance costs, and added finance costs — all contribute to sustained upward pressure on food costs.

One commonly overlooked component of the food-dollar breakdown involves labor costs. ERS estimates that half of our food dollar goes to salaries, wages, or benefits of those across the food chain.  (In comparison, ERS estimates that energy costs represent only 3.2 cents of the same food dollar.)

BLS notes that overall U.S. wages and salaries increased by 4.5 percent in 2021 and another 5.1 percent in 2022 – almost double the annual increase seen in 2020. Increases in the labor-intensive food processing sector since 2020 have often eclipsed these levels.  As far back as November 2021, Jayson Luck of Purdue University reported substantial pay hikes already underway:

More recently, the United Food and Commercial Workers Union reported new spring 2023 contracts with more generous compensation elements, including a contract for a Heinz facility offering a 23 increase in wages and compensation spread over three years, and another Delaware vegetable processing plant offering a new three-year contract with annual 5 percent wage increases, some retroactive.

Add a pinch of uncertainty, too…

By any measure, rising labor costs continue to be a significant factor in food price inflation.

Add to all that some additional complications – most oriented around the simple power of uncertainty. How long will the conflict in Ukraine go on? What new conflicts may emerge that will affect food production and trade? Will the global economy enter a recession?

Which way will energy costs go? How will climate change affect global production of essential food commodities? Are production climate patterns and global trade flows undergoing a fundamental shift? Will requests for ESG practices increase costs to the consumer? How quickly can we use science intelligently to increase global productivity and still sustain, enhance, and protect our planet’s air, soil and water?

The Big Question: Cost or Investment?

The uncertainties hanging over the global food system seem daunting. And they are. But they aren’t insurmountable, and history suggests our food system has always remained flexible and agile. It continues to remain healthy overall and fully capable of meeting our rising food needs. But the price we pay for that food security may be changing. Higher food costs may be the fuel needed to keep the productive engine running.

Those in the food supply chain, from dirt to dinner, have been challenged over food costs – and rising profit reports – make several points about the future and the past. Reckless claims of “greed’ and “profiteering” ignore the fact that past food prices have been an exceptionally good bargain for consumers, they contend.

Also, increases in wages and salaries have helped offset – and in many years exceeded – the rate of food inflation. The latest data from BLS suggests a growing convergence of the rate of increase in food costs and average wages.

Furthermore, the sector continues to promote sales and promotions that eat into margins, while significant investments in new and better equipment and systems are needed every day.

Double-digit annual price increases are painful, especially following two decades of retail food price inflation that averaged just 2 percent per year. But smart shopping is still an important way to ease the pain.

Economists in the public and private sectors say the inflation rates should continue to drop. But a return to the 2 percent level of increase may not, and certainly not in the short term. As ERS put it in their Food Price Outlook for 2023:

Business leaders and many economists argue that higher earnings mean we can continue to develop our food system to meet the changing expectations of consumers, for more variety, convenience, healthy options, environmental protections, fair and responsible sourcing, and all the other demands of our progressive world.

Furthermore, they point out, consumers by and large have been willing to pay the costs of building and maintaining a food system to meet those expectations.

Government and numerous other private sector reports tend to support this line of argument. Consumers combat higher food costs in a variety of ways – by being more selective in the foods they put on the table, by looking more aggressively for store promotions and sales, by cutting back on spending on out-of-home dining, and by a host of other intelligent responses to higher costs.

Despite the continuing upward trend in prices, there’s no apparent imminent rebellion in the streets. Perhaps unconsciously, we as consumers may be coming to realize that higher food prices are as much an investment in our long-term food security as a day-to-day expense.

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I’m a naturally curious person, but sometimes life (read: kids) takes me off course. But recently, I seized the opportunity for a quiet weekend…and it was glorious. After a hike on an unseasonably warm February morning, I sat down to think about what to explore for my next D2D post. I grabbed a go-to snack of mine – a peanut butter & chocolate RxBAR – and tore off the wrapper.

But this time, instead of tossing the wrapper to begin chewing at that dense, doughy square, I gingerly pieced the wrapper back together. And there was my lightbulb: the ingredients so clearly and cleverly listed on the front of the package. Where are these ingredients from? How is this product made? And how does it get to my grocery store?

So begins my trek on where some of our favorite foods come from. Bon voyage!

RxBAR Protein Bar: Simple ingredients, complex sourcing

So here’s this beige, homogenized-looking bar, but its four ingredients are anything but. Each of these listed foods – dates, peanuts, egg whites, and chocolate – has a source. And from its source begins a journey to us, often with a few stops along the way.

For instance, the main ingredient in this protein bar is dates, which are commonly cultivated and packaged in the Middle East. The Middle East. Not some fabricated, gooey by-product made within RxBAR’s manufacturing facility. And because fresh dates are perishable, they must be cleaned and packaged close by and shipped directly to the U.S. facility for processing. I’m already feeling more globally connected😊

Next up are peanuts, grown and shelled in the southeastern U.S., followed by egg whites. Despite egg whites’ domestic roots, they have an interesting story to tell. Some food manufacturers, like RxBAR, have just a few product lines – none of which require the whole egg. All they need to make their products is egg white powder – a significantly cheaper, lighter, and less fragile product derived from whole eggs.

Separating and dehydrating eggs into discrete products occurs at an egg processing plant. The egg product then ships to the manufacturing facility for reconstitution and is added as an ingredient in its protein bar formula. If I were that humble egg white in that little egg at the beginning of this process, you better hope I had no idea of that long path ahead.

The last main ingredient, chocolate, requires us to go abroad once again – to the Ivory Coast. There, the cacao beans are picked, fermented, dried, packaged and exported to a U.S. processing facility for roasting and grinding before being sent to the manufacturing facility.

With all ingredients intact, the manufacturer also adds salt and other additives not listed on the wrapper to preserve freshness, modify color, and/or enhance flavor. In the case of RxBAR, the end product goes into a high-barrier film wrapper to withstand the next leg of its journey.

Because RxBAR is owned by Kellogg’s, it can utilize the parent company’s existing distribution network to get its product to grocery stores and other retailers across 15 countries. It’s incredible where this one simple bar has been, right?

Whole wheat bread: a lesson in distribution networks

My curiosity hasn’t even begun to be sated, though. Next? Let’s pick something domestically produced and seemingly straight-forward. How about the U.S.’s most popular wheat bread, Nature’s Own?

The Midwest U.S. is known for its production and global distribution of wheat and its derived products, like flour, wheat germ, gluten, yeast, starch, among others. So it’s no surprise that the wheat products in Nature’s Own 100% whole wheat bread are mostly grown in North Dakota, Kansas, and Colorado and then shipped and processed to at least 20 different states within the country.

Next up by weight is brown sugar. This is typically a mix of refined white sugar and molasses and probably sourced from sugar beets grown in North Dakota and Minnesota. Soybeans, grown and processed in the Midwest, create the next two ingredients via separate processing lines: soybean oil and lecithin.

What I found most interesting about this food product is not necessarily the ingredients, but the journey they take. Because Flowers Foods owns Nature’s Own as well as Wonder Bread, Dave’s Killer Bread, and Tastykake, the company utilizes its network of bakeries across the U.S. to manufacture these products.

If you think switching subway lines is hard, try adding in buses, taxis, rail trains, and bikes all while picking up and delivering Doordash orders within the one-hour limit. Yep, not easy at all. Enter an established nationwide distribution network comprised of rails and roads to make life easier and products fresher.

Cashew milk: Have a little help from…a global conglomerate

When visiting the grocery store, are you as overwhelmed as I am at the dairy aisle? As if there isn’t enough competition among traditional milks – organic, conventional, regional, skim, whole – we must mine through the plant-based options, too. And manufacturing these alternative milks are way more complicated than its traditional, sole-ingredient counterpart.

Why? Turn that carton around and take a look at that ingredient list. Surprisingly extensive, right? For this supermarket trip, I’m going to give Silk vanilla cashew milk a shot. For brevity (not to mention my sanity), I’m looking into its top five ingredients. Here we go…

Cashews. Delicious, creamy…and definitely not from around these parts. Cashew trees need constant heat and sunlight to grow, which is why they are mostly cultivated in India; Africa and Vietnam are also significant exporters to U.S. Next up by ingredient weight are almonds, which are domestically produced. In fact, 80% of the global supply comes from California alone.

Nuts comprise the bulk of the product, with a lengthy series of additives making up the balance. Many of these are produced, manufactured, and exported to U.S. processing facilities. These ingredients include locust bean gum sourced from carob trees along the Mediterranean; sunflower lecithin, formerly from Ukraine and Russia, but now most likely from Argentina and Romania; and vanilla from Madagascar. Vitamins are also mixed in to deliver a fortified product that can more readily compete with traditional milk’s nutrient density.

All these moving parts make me wonder: how can a company source so many global ingredients to supermarkets worldwide before the product expires? Simple…just get purchased by Danone, a massive international food company with reaches into the furthest parts of the world.

Otherwise, a company may be stuck with just a couple U.S. facilities and then be forced to orchestrate its own distribution system in hopes that its products arrive on time…and not expired.

Coffee: A unique ‘blend’ of hemispheres

Ah, coffee. This is probably nearest and dearest to my heart on this list. And not just because it brings joy to me each and every morning, but also because each heavenly sip truly connects the Southern Hemisphere with the Northern Hemisphere. Every. Single. Granule.

You see, you think coffee would be super simple to envision its journey because it’s just one ingredient, but it couldn’t be farther from the truth.

Let’s take Folgers, one of America’s favorite coffee brands, for a ride. Similar to many other large coffee company brands you see at your supermarket, Folgers uses a mix of robusta and arabica coffee beans in their blend.

Robusta beans provide that caffeine rush but at the cost of a more grainy, harsh taste. Arabica, on the other hand, is smoother, has more depth of flavor, and is harder to cultivate. Specialty coffees are usually 100% arabica, which is one reason why you’ll see them at a higher price point.

To keep its prices down, Folgers is reported to blend their coffees with 60% robusta and 40% arabica beans from all across the “coffee belt”, the equatorial line where coffee grows in abundance. And when I write “blend”, I mean it.

You know how you’ll see labels showing where the beans are from, like “100% Colombian”, “Ugandan”, or “South American blend”? You won’t find such a level of specificity with Folgers Classic Roast. Why? Because they collect the mix of beans from across the coffee belt, roast and grind them in their New Orleans facility, and then package and distribute across the U.S. and Asia via its parent company, Procter & Gamble. Seriously, a global connection in every ground.

Value & connection in our food

Now I can’t help but look at ingredient labels; not just for nutritional and health reasons, but for exploration and continued curiosity. Even with seemingly no end to inflation in sight, it puts prices for these goods in a different perspective. Yes, I need to be more mindful of my wallet when going to the grocery store nowadays, but the value is undeniable.

And although globalization feels less prevalent over the last few years because of Covid, the war in Ukraine, logistical snafus like the Ever Given canal blockage, just to name a few, we depend on one another. It’s a complicated, interwoven relationship with nations across the globe where one small snag weakens the fabric of interconnected networks. And as the war continues and other global situations arise that disrupt our food system, there’s still no denying these key partnerships provide the choices, convenience and prices we’ve all become accustomed to.

So with that, take heart that these suddenly complicated global food products, like cashew milk and white chocolate macadamia nut cookies, will continue to fill our store shelves.

Dean Foods was founded in 1925 by Samuel E. Dean, Sr., who guided the growth and development of a basic dairy milk processing operation into something much bigger and more far-reaching.

Over time, Dean Foods moved to bottling its own brands, invested in research and product development, and alternative products, such as dry milk powder and coffee creamers, juice, teas, and other food offerings. This long-term growth strategy through the development of nutritious and tasty beverages and foods made Dean Foods one of the most recognized and respected names in its industry.

After being acquired by Suiza Foods Corporation in 2001, Dean Foods began to see real change – in its structure, and its approach to the market. Some processing plants were spun off, and an aggressive program of acquisitions and divestitures brought more and more brands and consumer offerings.

Dairy’s growing pains

Their growth was short-lived as in 2020, Dean Foods filed for bankruptcy because they were unable to meet their debt and pension obligations. Dairy Farmers of America ended up purchasing most of their assets.

By comparison, Borden Dairy also produced huge quantities of dairy milk for the retail market – more than 500 million gallons each year, from 12 plants across the country. This household name in dairy dates its origins back to 1857.

In addition to traditional milk, Borden’s family of dairy products includes lactose-free milks, flavored milks, high-protein milk, juices, creams, and dips. Similar to Dean Foods, Borden had a turbulent history of various food products, many of which were divested and sold off.

Yet, they also went bankrupt in 2020 and sold their assets to New Dairy Opco LLC owned by a former CEO of Dean Foods, Gregg Engles, and Kohlberg Kravis Roberts (KKR).  They struggled with the rising cost of milk combined with their debt forced them in filing for bankruptcy.

Is a changing industry to blame?

Analyst reports show that the most commonly cited reason for the plight of Dean Foods rests in the fundamental changes that have been underway in the dairy sector for several decades. To many observers, both companies are simply victims of structural changes in the dairy industry that were just too big to overcome. Here are a few examples that come to mind:

• Fewer family dairy farmers. Dean Foods’ midwestern heritage helped shape a focus on buying milk from smaller dairy producers. However, the company couldn’t source enough whole milk at prices competitive with those offered by larger, more efficient operators.
• Changing milk processing patterns. As larger and more efficient dairy operations emerged, large processing and distribution centers began to change, as well. Many producers faced the cold reality of operating outside these new structural realities, adding to the cost-price disadvantage they faced.
• More competition from retailers. When huge companies such as Walmart and Kroger decided to aggressively market their own dairy labels, Dean Foods and other processors were put in the position of becoming not just suppliers to such companies, but competitors to them as well.

Or dairy’s changing consumer tastes?

But structural change was only part of the picture facing Dean Foods and the entire dairy industry. Changing dietary patterns and increasingly complex consumer demands also had to be considered.

Lower consumption of whole milk.

Fewer of us drink a glass of milk at dinner now. Evolving taste and health preferences, and changed lifestyle means U.S. households aren’t consuming as many whole milk products as in the past.

U.S. Department of Agriculture statistics show that per-capita consumption of dairy milk beverages fell by 14% between 2015 and 2021. If you look back at 1975 when everyone drank a glass of milk at breakfast, lunch, and dinner, the consumption in 2021 went to 134 pounds per person from 247 pounds…a precipitous drop of 46%.

Rise in demand for alternative dairy-free products.

Lately, consumers are showing a lot of love for a variety of alternative dairy milks: almond, walnut, oat, potato, hazelnut, flax, tiger nut, quinoa, chia seed, macadamia, soy, cashew, rice, pea, coconut, and even hemp.

Despite this growth, consumers only consume about 6 pounds per year. Also, there are other animals that produce milk for human consumption as well: goats, sheep, camel, and buffalo – all eating into the cow’s milk market share.

Environmental sensitivities.

More and more consumers also have indicated a preference for companies that mirror their own desire to be “close to” nature and protective of the environment and its inhabitants. Companies conveying these desired values tend to connect better with consumers. They want to see the cow or the plant or the farm where their product came from.

Or does the company need changing?

For Dean Foods in particular, among the most contentious points raised in any analysis is the issue of “poor management” and “bad decision-making.” Hindsight and second-guessing follow business failure like kids chase ice cream trucks. But many critics point to several factors that may have contributed to the mess facing the company.

• Mistakes in managing the brand portfolio. For example, the company’s willingness to sell off some of its plant-based product alternatives and “healthy foods” units have been widely criticized. Such a strategy made it imperative for the company to maximize the operational efficiency of its traditional dairy businesses, which has proven to be a very daunting task, given the economic pressures facing the production industry.
• Failure to listen. The company has faced charges of not listening to the consumer and failing to recognize the fundamental changes in their expectations. Consumers want more choices that match health concerns and personal values. Reports by environmental groups citing the company’s alleged poor performance in dealing with water quality and other environmental protections can’t be ruled out as a contributing factor to the present situation.

Say ‘cheese’…please??

The FDA recently issued a draft guidance on how to label non-dairy milks. They want to ensure that plant-based milks are sold as alternatives to milk and not to be misconstrued as milk.  The agency’s recommendation is that plant-based beverages with “milk” in its product name show nutritional differences from cow’s milk on the carton’s label.  For instance, does it have more or less Vitamin D, calcium, potassium, and vitamins A and B-12?

Yet when one looks at overall milk demand and dairy cows – the numbers support that consumers still look to the cow for their dairy.

Total Milk Production in the U.S., in million pounds 

Milk production has increased while the number of U.S. dairy cows has remained steady, at just over 9 million head. Milk volume has also increased worldwide by over 9% since 2015. Dairy cows today are much more efficient due to more sophisticated feed and genetics. The average U.S. dairy cow produces 24,262 pounds per year versus ten years ago when it was 21,722 pounds a year.  Cows that eat just grass give about 50 glasses of milk a day. But cows that eat a mixture of corn, vitamins, grass, and hay can double their volume to about 100 glasses of milk a day.

But if consumers are not drinking as much milk, then why did milk production increase?  It is all about the cheese.  Between pizza, charcuterie boards, macaroni and cheese, and everything else about cheese, the milk volume has increased by 12%.

What’s next?

The FDA has just provided a draft guidance in to ensure the consumer is not confused about the nutritional difference between cow’s milk and plant-based milk. The dairy industry fought against the word ‘milk’ when it was linked to a tree, a nut, or grain because it doesn’t have the same levels of calcium, vitamin D, and other nutrients.  While plant-based milks are fortified, those nutrients are not necessarily all absorbed by the body.

The FDA requested that all alternative drinks, if they have the word ‘milk’ on the label, compare to cows milk.  For instance, the label would say, ‘contains lower amounts of Vitamin D and calcium than milk.”

For the average consumer, the take-away from the Deans Food and Borden saga is fairly straight-forward. Despite the continuing difficulties facing the dairy industry, they will see ample supplies of reasonably priced dairy products and dairy alternatives. Consumers can expect to see the number and variety of dairy products continue to grow, and the relentless competitive forces at work across the industry hold prices down.

Potentially the more important lesson may involve other sectors of the food industry. Business strategy, structure and operations must be linked to the realities of the market. That includes adaptation to new market economics, and the structure and way of doing business that accommodates them.

Poultry’s high viral transmissibility

The world loves poultry. The total number of chickens around the world is over 34 billion; 9 billion are in the United States alone. Americans eat about 118 pounds of chicken and turkey per year. And, they are easy to grow. Their feed conversion rate is low: two pounds of chicken feed contribute to one pound of growth. This is compared to beef which has an eight-to-one ratio and fish which is one-to-one.

Chickens typically live in very close proximity to each other, making infectious diseases like Avian Influenza challenging to contain. The term ‘fowl plague’ virus was first detected in 1878 in Italy. Since then, it has morphed into two categories: high and low pathogenic. This latest outbreak seems to be high. The current virus, H5N1, originated in China and then spread through Europe and the rest of Asia.

The most recent H5N1 bird flu outbreak has killed over 140 million domestic birds around the world.  In the United States alone, at least 58 million birds have either died or been culled because of Avian Influenza since January 2022.  While it is hard to tell exactly how many wild birds have Avian Influenza, the CDC estimates it is around 6,000 and is in 47 states.

Here are the U.S. counties that have reported an outbreak, to date:

Since the outbreak in 2014-2015 poultry farms have been diligent about keeping their operations sanitary and not spreading germs between facilities. The U.S. Department of Agriculture has biosecurity measures called ‘defend the flock’ and these precautions are taken seriously. An outbreak at a farm seems to be caused by wild birds that somehow infect the domestic birds.

Free-range birds are the most at risk because they can catch it from wild birds since their living arrangements are the least controlled.

And the birds that it affects are mostly egg-laying chickens versus broilers – those that we eat.  Turkeys are also affected.

Can wild birds pass it to mammals?

The World Health Organization reported to the BBC that the most recent outbreak is spilling over into mammals. It has been found in animals that eat birds such as foxes, mink, and seals. But surprisingly, dolphins, too – which generally don’t eat wild birds.

Sea lions in Peru were particularly hard hit. It is difficult to tell whether they transmitted it among themselves or they were all eating infected birds. Researcher Victor Gamarra-Toledo and his team at Peru’s Natural History Museum of the National University of San Agustín de Arequipa reported that 3,000 sea lions died. They are in the process of genetic testing to investigate the virus sequencing.

Along the coast of Maine it was reported that there have been 337 seals that are either sick or dead with H5N1 since June 2022. This has been deemed an ‘unusual mortality event along the Maine coast’ by the National Oceanic and Atmospheric Administration.

Minks at a farm in Spain were decimated this past October from an H5N1 outbreak. All 51,00 minks either died from the disease or were culled. The minks were kept in netting cages where they had a roof but the sides were open. There were sick birds found along the coast nearby.

There was also a mink farm outbreak in the Netherlands. So far none of the workers at either farm have caught the H5N1 virus and they are all wearing masks and protective clothing to mitigate their chances.

Does this spread to humans?

JAMA Network states that only a handful of human infections have been reported, all among people who have had direct contact with poultry.

An 11-year-old girl in Cambodia died from H5N1. Her family had 22 chickens and ducks so she easily could have got it by close proximity to their feces. It can be inadvertently transmitted by inhalation. While her father has the same strain of flu, it is hard to know whether he got it from the birds – or from his daughter.

In April 2022, a man in Colorado was culling an infected herd and caught it. He recovered fairly quickly as he was given Tamiflu. According to WHO, in the past nine years, from June 2003 to February 2023 there have been 870 cases of humans getting H5N1 – however, they have all had close proximity to poultry and did not catch it from another human.

Can we safely eat poultry and eggs?

It is safe to eat poultry and eggs and like any animal products, it is important to cook thoroughly.

• Properly cooked poultry and eggs (at 165 internal temp or higher) are safe to eat- and there is no evidence that it can be spread to humans through properly prepared foods
• It is unlikely that infected eggs or chickens can enter the food chain given that the symptoms of this flu have a rapid onset
• USDA has safeguards in place including testing flocks and Federal inspection programs like HPAI-risk based classification system to determine the order in which egg farms are inspected, works with the State Animal Health Officials on farm checks and testing

What is wheat?

Wheat is one of the oldest and most important grain crops in the world, with Russia, Canada, and the U.S. providing half the exported wheat across the globe. Besides being a key ingredient for the production of breads, cereals, and pastas, wheat can also produce starch, paste, dextrose, gluten, alcohol, among other products. Fun fact: Americans consume 53 pounds of bread each year. At 75-80 calories per bread slice, that’s a lot of dough.

Wheat first requires processing to make food products. The wheat’s grain must first be cracked and then it’s passed through a series of rollers. As the smaller particles get sifted through, the coarser particles pass through additional rollers for further reduction. About 72 percent of the milled grain becomes white flour. Nothing goes to waste, with most milling by-products added to livestock feeds.

Types of wheat

There are six major classes of wheat, mostly classified as “hard” or “soft”.

Hard types of wheat are mostly grown in dry climates, leading to higher protein and gluten content. This makes it ideal for breadmaking.

Soft types are grown in more humid conditions, creating a lower protein content and weak gluten. These flours are mostly used for sweeter breads like cakes and cookies.

Here are the six classes of wheat:

• Hard Red Winter
  • Grown across the Midwestern U.S., it’s the most popular class of wheat, representing about 40 percent of U.S production
  • High in gluten, best for leavened breads
• Hard Red Spring
  • Grown mainly in Dakotas, Montana
  • Known as the “aristocrat of wheats” for having highest protein content to produce high-quality breads, rolls, bagels, pizza crusts
  • Often blended with other wheat flours to enhance quality
• Soft Red Winter
  • Grown in eastern third of United States
  • Has weaker gluten and lower protein, used primarily for cakes, cookies, crackers
• Hard White
  • Mainly grown in Upper Plains, Montana, Idaho, and California, it’s the smallest class of wheat
  • Distinguished from Hard Red Wheat by its sandy-beige color,
  • Has a slightly lower protein content used for rolls, ‘softer’ breads
• Soft White
  • Grown mainly in Pacific Northwest
  • Its white kernels and higher starch level make it good for cakes, pastries, muffins, snack foods
• Durum
  • The hardest of wheats, with North Dakota and Upper Midwest dominating production
  • Best suited for pasts and semolina

Who is eating all this wheat?

Wheat historically has been the cornerstone of western diets, where climate and other growing conditions made the crop an easily available source of our daily bread. In the eastern world, conditions helped make rice the cornerstone commodity. Improved agronomics and global trade have helped open the door to greater access to both commodities for all.

Today, the taste for wheat-derived foods has spread around the world, nowhere more so than rice-consuming countries like China and India.

China relies on wheat as a major source of food for its 1.4 billion hungry citizens, making it the world’s top wheat producing and consuming nation. India is second.

But when it comes to simple per-capita wheat consumption, westerners are the undisputed champions. In the United States, we love hot, fresh bread and rolls, pasta, pizza, donuts, rolls, cakes and cookies and a great many other products that rely on wheat as the basic ingredient.

And for many in other less-affluent parts of the world, some type of bread remains a fundamental source of the daily nutrition needed for simple survival.

Global wheat production

What goes into a loaf of bread? Let’s start at the top. An average acre of wheat yields about 40 bushels, while corn yields about 177 bushels per acre and soybeans roughly 50 bushels per acre. Each 60-pound bushel of wheat can produce about 42 pounds of white flour, with about 16 ounces of flour in a 1.5-pound loaf of bread, making 42 1.5-pound loaves of white bread, or 90 1.0-pound loaves of whole wheat bread per bushel.

Wheat is the most-produced crop in the world, with corn and rice trailing behind. It’s the second-largest crop produced for human consumption.

Even so, more land worldwide is devoted to wheat production than any other crop – 221 million hectares, compared with 206 million for corn and 165 million for rice.

Wheat has a global production of 781 million metric tons, with U.S. producing about 45 million metric tons.

Since its 1981 peak, U.S. land planted for wheat has declined by more than 42 million acres, and production has decreased by more than 1.1 billion bushels.

However, Russian wheat production has grown from a 2012 low of 38 million tons to more than 80 million this year – and is projected to reach 91 million by 2030.

And here’s a fun fact to end with:

Processing, or milling, wheat is an ancient practice. Bread was a staple food even during the Neolithic time 10,000 years ago and since has been incorporated into religious rituals and traditions. In fact, folklore holds that eating bread crust makes your hair curlier. Want more fun facts about bread? Read more here!

Supply chain issues have caused empty shelves. And coupled with the effects of inflation, many of us have reasonable cause for concern. Will we find all of the food for our Thanksgiving table, and at what price?

A Rise in Prices

Inflation has had a major impact on food prices in 2022. The cost of all food has increased by over 11% in September since 2021.

And we can expect the same will be true for our Thanksgiving dinners this year. But, despite inflation’s unprecedented rise, there’s reason to be slightly optimistic as we draw closer to Turkey Day: U.S. consumer inflation dropped to 7.7% year-over-year in October.

That’s a big relief on what has otherwise been an upward trend of price increases since January 2022. However, food is still very expensive. And many products will be served on our Thanksgiving table in just a few short days.

Here are a few of the biggest increases we’ve seen:

The Main Event – Turkey

The price of Thanksgiving turkeys are currently up 17% from this time last year, and this is not surprising considering all that’s happened in the turkey world this year. Not only has inflation caused prices to rise, but transportation costs are also up and supply chain issues are still in effect.

Furthermore, the avian flu has not only killed turkeys but has also forced commercial operations to shut down to contain the spread. So should we be worried? Not exactly. However, do expect to pay more for your turkey. My turkey, which I purchased last week, went up to 69 cents, compared to 49 cents last year. It also is a good idea to shop early, especially if you’re looking for a fresh turkey, but we recommend buying frozen because it’s juicier and has just as many nutrients as fresh.

Learn our best tips on how to properly clean, prepare, and cook a Thanksgiving turkey here.

Baking/Bakery Goods

 Your apple and pumpkin pies this year have just gotten more expensive. The consumer price index reports state that the prices for margarine, flour and prepared flour mixes, and frozen and refrigerated bakery products have seen the biggest jump from last year at a 16.2% increase.

Eggs have also seen a sharp rise, hitting a record-high price in the Midwest at $4.18 a dozen. Even if you don’t live in the Midwest, you’ve probably still seen an increase since most grocery stores are selling a dozen eggs at 200% over the average price of $1.45.

Margarine

Margarine, an alternative to butter and used in many baked goods, has seen one of the largest price increases in the last year. Up 44% in cost from last September, there are several reasons this could be the case.

An increase in demand is one as many are starting to realize that most margarine is made from vegetable oils and contains polyunsaturated and monounsaturated fats, making it heart-healthy.

The other reason for this large bump in price is because of the war in Ukraine. Most of the vegetable oils used in margarine production come from Ukrainian imports, and with the current war’s impact on exports, the cost of these oils has increased dramatically. Indonesia’s ban on palm oil exports also plays a part, with supply down and demand up, creating strain on the supply chain.

How to Shop Smarter, Not Harder

Now that we’ve looked at what will cost us the most this Thanksgiving compared to previous years, let’s talk about what we can do to still celebrate the holiday at a price we can afford.

Fresh vs. Frozen

We’ve all heard the saying, “fresh is best.” However, this is super misleading as it’s not always the case.

When a vegetable or fruit is picked, there are a lot of steps in the supply chain, including washing and packaging to name a few, that it must go through before reaching our grocery store shelves and, eventually, our fridges at home.

During each of these steps, the fruit or vegetables loses a bit more of their nutrients. However, when fruit and vegetables are picked and sold as frozen, they’re frozen almost right away, locking in these nutrients. This makes frozen fruit and vegetables the same nutritionally if not more nutritious than fresh.

So, if you find it more affordable to buy your corn or beans frozen—go for it!

Look for grocery stores that are lowering prices

This time of year, many grocery stores offer deals and discounts on food for Thanksgiving. For example, my own grocery store has a rewards system, where every time you shop there, you earn points. If you earn enough points before Thanksgiving, you receive a free turkey. Another grocery store in my town is offering an “early bird” sale, where all turkeys are over half off right now and will increase the closer you get to the holiday, further proving our point to shop early!

Aldi has made major news recently because they are matching their 2019 prices on some Thanksgiving-related foods this year. This is an attempt to help consumers have the same Thanksgiving they’ve had in the past. The President of Aldi, Dave Rinaldo, was quoted saying:

Walmart is also returning to 2021 prices on some Thanksgiving foods. This includes turkey, ham, potatoes, stuffing, and pumpkin pie.

Key Take-Aways

1. Most foods, like turkey, eggs, flour, and margarine, will cost more this Thanksgiving. Follow the sales and discounts to ensure you’re getting the best price.
2. Get your turkey NOW! This will help you not only get a better price but also ensure you actually get a turkey for your dinner. Might as well grab one and put it in your freezer for Christmas while you’re at it.
3. Ask your local grocer if they’re planning on running any sales or discounts during the holiday season. More than likely, they’ll say yes and you can plan your shopping around those times.
4. Give frozen produce a chance. Not only are these products regularly affordable and prone to frequent sales, these fruits and veggies are picked and flash-frozen at peak freshness, so you’re guaranteed a flavorful side. Consider buying frozen corn, peas, green beans, cranberries, cauliflower, and butternut squash.
5. Enjoy the holiday with your friends and family! Remember, that no matter what we are finally able to spend the holidays with our loved ones again, so enjoy the time together.

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Plastic is ever-present, as seemingly ubiquitous as wood or metal. It’s hard to believe that it wasn’t a consumer product until after World War II when we had a significant surplus on our hands that was reserved for creating vehicle and munition parts (should the war have continued). That excess plastic was quickly and cleverly woven into our lives, making countless products cheaper, lighter, and longer-lasting. In fact, clocking in with a half-life of 400 years, many would argue that it’s too long-lasting.

A plastic love story

But plastic has its proven applications. Whether your primary concern is a meaningful reduction in food waste or freight costs, or improved sanitation practices during Covid, its benefits to our food system are substantial.

Let’s take Western Europe as an example. These countries have instituted food packaging practices across their supply chains, providing shoppers more time to consume every perishable item they purchase, thus increasing food safety measures while lowering food waste…and all at a reasonable price.

As insane as it sounds, perhaps the Earth benefits from plastic to some degree, too. Less food waste, more and varied food delivered directly to the consumer from around the world, and even fewer trucks on the road with lighter loads to carry equates to fewer greenhouse gases released into the atmosphere.

The elephant-sized container in the room

With its myriad benefits, plastics certainly have their place in our food system. But it becomes more complicated when only 9% of U.S. plastics are recycled, with the overwhelming majority being tossed out as trash to end up on shores, in watersheds, on roadsides, and landfills. And from there, it sits and degrades for hundreds of years, if it’s not incinerated into greenhouse gases first.

Like many things, a lack of foresight and preparation is to blame. Prior to 2018, China accepted the world’s plastic waste, so the U.S. and other countries sent it packing, literally, across the globe. But once China stopped taking foreign refuse, countries exporting their waste had to rely on their domestic facilities for processing. For the U.S., the infrastructure was ill-prepared for this sudden demand.

This is why the U.S. Environmental Protection Agency reports a lack of recycling facilities as the main contributor to unrecycled plastics. So even though many of us dutifully separate out our glass, plastic, and cardboard products each week, there’s little guarantee those items will be repurposed.

There’s still a chance for these unrecycled recyclables to be repurposed…just most likely not here. About 1.2 billion pounds of plastic waste from the U.S. gets exported to Canada, as well as to developing nations like Mexico, Malaysia, India, and Vietnam.

Global garbage relocation

But this solution is counterproductive, as it requires transport and fuel costs to ship these plastics to countries that may not even have a waste management system for their own citizens. It is this gross inefficiency that made 189 countries agree to limit the amount of plastic waste shipped overseas as part of the 2019 Basel Convention, and more developing nations to refuse our plastic garbage.

And now it’s not even feasible to export the plastics we can’t handle. Towns like Stamford, Connecticut experienced the massive financial burden of exporting plastic waste in just one year, going from $95,000 in revenues by selling its recyclables, to paying $700,000 to haul it all away.

And so goes the continuing decline of U.S. recycling infrastructure. More and more municipalities, each one with its unique recycling guidelines, have determined that it was far more economical to just simply toss recycling in the garbage, resulting in incinerating more than half of recyclable plastics.

And, in the past, alternative options haven’t looked much better. Back in 2016, Trucost, S&P Global’s climate research division, published a study that found replacing plastic with a mix of alternative materials (e.g., recycled paper products, organic matter) may have four times the negative environmental impact than current plastic production.

But thanks to the research and actions of companies, universities, and countless others over the last few years, there is reason to believe the course of alternative packaging materials has pivoted. These efforts, when combined, are capable of disrupting the packaging industry. And we all stand to benefit from their progress.

Supermarket supply-chain sweep

Food retailers have a unique power to shape demand for single-use plastics. ReFED, a national nonprofit working to eliminate food waste, noted that grocers connect all points along the supply chain, from manufacturers to consumers. Though they cannot address single-use plastic waste alone, food retailers can exert that level and breadth of influence to drive change.

Regional grocers have restarted their reduction initiatives that were paused during the pandemic. Giant announced they will be free of single-use plastic by 2025. Aldi is committed to reducing and removing unnecessary plastic and packaging from their products. Kroger wants your trash. They encourage customers to mail in their used food packing made from TerraCycle.

Loop, a zero-waste grocer, collaborates with companies to stock products from national brands like Nature’s Path, Tropicana, Crest, and Clorox, in reusable containers. When the containers are empty, its customers return the packaging in a postage-paid reusable tote. And Loop is currently roping in several retail partners, like Kroger and Walgreens, to gain much-needed traction.

These companies clearly communicate their intention to reduce single-use plastics with specific dates. Their stores are also applying pressure across their supply chain to support their efforts, from demanding new packaging from suppliers to providing customers with on-site plastic film and composting management.

The green packaging frontier

The “green packaging” space is growing as more players enter the $290B international market with proprietary ‘green’ materials that can compete with plastic. Led by the food & beverage industry, this growth is fueled by stringent regulations on single-use plastics and consumer demand for sustainable packaging.

Amcor, a Swiss packaging company, created metal-free “AmLite Ultra”, an applied solution that makes those pesky multi-layer baby & toddler food pouches more recyclable. And, despite the increased demand for single-use plastics due to Covid, the company still pledges to develop all recyclable or reusable packaging by 2025.

Also based in Switzerland, Tetra Pak is using its position as a leader in packaging production to create new lines of plant-based polymers ethically sourced from Brazil-based petrochemical company, Braskem.

Imagine having all paper and plastic plates, cups, and straws compostable. NatureWorks uses carbohydrates from plants for more sustainable plastics and fibers used for 3D printing, injection molding, films, and foam.

A company I’ve seen multiple times at restaurants and grocery stores is VegWare, a leader in compostable foodservice packaging. Based in the U.K., the company prides itself on its award-winning products that are durable, lightweight and well-designed. My personal experience concurred: the straw didn’t disintegrate into my smoothie, even when I left it in the car for a while. That’s a win in my book.

Institutional expertise

And it’s not just companies jumping on the bandwagon. Researchers at Penn State developed an inexpensive, compostable “biofilm” that could replace plastic barrier coatings in food packaging.

And not to be outdone, researchers from Harvard’s School of Engineering & Applied Sciences and School of Public Health have teamed up to create a potentially disruptive technology called rotary jet-spinning (“RJS”) that has applications from healthcare to food packaging.

RJS product technology quickly wraps an object in a liquid polymer solution that solidifies to create a durable anti-microbial layer. Since the polymer is a naturally occurring polysaccharide, the wrap is biodegradable. Another benefit? The polymer has been proven to substantially increase produce shelf life.

With other green packaging players champing at the bit, there’s good reason to feel optimistic about plastic’s future in our food system. Much of its success will rely on creating a closed-loop system that’s prepared for recycling waste back into viable products.

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Economists like to remind us that trade makes the world go ‘round.  If that’s true, the world must be spinning very fast indeed.

Recognizing a water-borne world economy

International commerce continues to grow – despite the conflict, pandemics, climate change and other challenges that make our global economic growth rates gyrate. The global Covid pandemic created a sharp but short-lived drop in commerce. But robust demand for all types of goods and aggressive exports by select Asian countries helped boost overall trade in 2021, to more than $28 trillion, according to estimates from the United Nations.

Yes…$28,000,000,000,000.00.

The cornerstone of commerce is transportation – the ability to move goods from where they are produced to where they are consumed, from where they are available to where they are needed.  And when it comes to international commerce, no mode of transportation is more important than ocean shipping.

Satisfying that demand is a big job – and not without its challenges and controversies.

The most immediate challenge is simply keeping up the supply of ships with the growth in commerce.  Today’s ocean-going merchant fleet numbers about 55,000 vessels, from smaller, specialized carriers carrying as little as 10,000 deadweight tons (DWT) to the giant multipurpose vessels capable of transporting 200,000 DWT or more.

The largest container ships can carry almost 24,000 TEUs (twenty-foot equivalent) containers – and the top 10 container vessels alone could accommodate an amazing 220,000 TEUs.  The Japanese vessel Ever Given, which memorably blocked the Suez Canal last year, is among that class of vessel, with a container carrying capacity of over 20,000 TEUs.

Perhaps the greatest public attention to ocean shipping has come from extensive video images of these large container ships awaiting unloading at various ports during the pandemic.  While these vessels are a critical component of the global trade in goods, they are by no means the only component, or even the most numerous.  They carry a wide range of high-value components and finished consumer products.  But they are significantly outnumbered by the smaller general cargo vessels and dry/wet bulk cargo carriers.

Transporting dry bulk

Dry bulk carriers make up the backbone of global commerce in the grains, oilseeds, coal, minerals and other high-volume commodities that form the foundation of our modern, interconnected global food, energy and manufacturing systems.

This portion of the fleet provides the steady flow of commodities from the American heartland to customers around the world.

Grain and oilseeds flow down the Mississippi River and to other critical exports points on the East and West Coasts.  The Great Lakes corridor also provides the physical connection to China and other Asian markets, Europe and destinations literally spanning the globe.

The dry bulk fleet is made up of over 12,300 vessels of more than a dozen different classes, based on capacity. These workhorse carriers can transport 912 million tons, according to estimates from the U.S. Department of Agriculture.

One historically important class of dry bulk carriers is the Panamax vessel, which was designed specifically to traverse the original small locks of the Panama Canal, speeding delivery from the U.S. Gulf and East Coast to the rapidly expanding markets in the Asia-Pacific region. Expansion of the locks has increased the size of vessels that can use the Canal today for the same purpose.

The supply of all categories of vessels changes, as boats age and are retired from service, and as the demand for larger, more efficient, more environmentally friendly ships emerges.

Estimates of the construction costs for ocean vessels vary widely, due to the myriad potential specifications for the multiple classes of vessels.  But a 2015 shipping industry study put the average cost of a container ship at $64 million, with a general if predictable observation that the larger the vessel, the larger the cost. Apart from the significant costs involved, the time required to construct these mammoth vessels can be three years from time of order to delivery.  Even so, as many as 700 vessels are on order at the beginning of 2022, which seems to reflect a broad faith in the continuing demand for ocean freight.

How does climate change come into the picture?

The critical role played by ocean shipping in maintaining international commerce and a vibrant global economy isn’t up for debate.  But that doesn’t mean the industry is immune from other, bigger concerns – including the contentious debate over how to deal with greenhouse gases and climate change.

Environmentalists by and large acknowledge the point. Airplanes generate the largest carbon footprint, with an estimated 500 grams of carbon dioxide per metric ton of freight. For example, according to Freight That Just Works, 2 tonnes shipped for 5,000 kilometers by ocean freight will lead to 150 kg of CO2 emissions, compared to 6,605 kg of CO2 emissions by air freight. Trucks produce about 50-150 grams, trains 30-60 grams per ton of freight. Ships emit only 10 to 40 grams. (That translates into at the worst one pound of carbon for every 11 tons of ocean-borne cargo, and one pound of carbon per 45 tons at the worst.) In other words, the worst-performing transportation sector contributes at least 20-30 times the carbon dioxide of the ocean shipping industry.

The World Economic Forum recently estimated that ocean freight contributes roughly 3 percent of the carbon dioxide at the center of the global climate debate.  It sounds like a very small – almost secondary, if not insignificant – point in the climate action plan.  But far from it.

The 2021 Glasgow Climate Summit saw 19 nations endorse an aggressive plan to tax the ocean freight industry as a means of encouraging still more efforts by the industry to curtail its contributions to global warming.

The additional costs would be imposed on traffic moving in the most popular sea lanes known as “green corridors,” especially those where traffic is expected to continue growing significantly.

Using the wind to propel large vessels is enthusiastically embraced by some charter companies to help offset engine power. The objective is to spur construction of carbon-neutral vessels and spur a 40 percent per-vessel reduction in carbon dioxide emissions by 2040. The ocean freight industry has responded positively to the idea of being an active participant in the global climate initiative.

A sea of controversy

Despite the largely upbeat tone of the post-Glasgow discussions, the ocean freight sector nonetheless faces another contentious issue – the enormous escalation in shipping costs.

Freight rates for all forms of water-borne transportation have been on a roller-coaster for some time.  But the supply-chain disruptions created by the global pandemic exacerbated upward prices pressures – and with the higher rates, loud and aggressive charges of unfair pricing if not outright price gouging.

Freight rates have indeed been under upward pressure, even before the emergence of Covid.  Economists point to the mid-2000s as a critical point in the pricing dynamic, as China began to expand its global economic reach through a steady increase in import demand.  The Beijing Olympics were one important driving force in the overall price increase, as was the rising trade focus across the Asia Pacific region.

The pandemic piled on this growing challenge to the global supply chain, with immediate and highly visible increases in shipping costs.  Rates for a bulk grain shipment from the U.S. Gulf to Japan in February 2016 stood at $22.56 per ton.  By May 2020, as the pandemic began to gain steam, the same rates had increased to $34.31.  By October of last year, as the U.S. harvest gained momentum, the rate had climbed to $87.38 – roughly four times the rate less than six years before.  Rates for shipment from ports in the Pacific Northwest showed similar increases.

Behind the rising demand for ocean freight

The challenges to international commerce have been offset in substantial ways by the emergence of China and other Asia Pacific nations as major players in international trade, as both exporters and importers of all sorts of commodities, components and finished consumer products.

Global trade volume via ocean exceeds 80 percent, and 60 percent of that passes through Asia. The South China Sea alone carries as much as one-third of global shipping. An estimated $5.3 trillion worth of goods travel the South China Sea each year – as much as $1.2 trillion of that amount being trade with the United States.

Source: China Power.

China, Taiwan, Japan, South Korea and other Asian nations often have shown more rapid economic growth and better trade balances than the United States and most other western nations.

Legislation to reform federal shipping regulations has passed in both houses of Congress.  The bill’s consumer-oriented proponents emphasize the need to invest more money in clearing up port bottlenecks.  The largest bottlenecks are off the coast of California where 40% percent of U.S. imports arrive. Long Beach and Los Angeles ports are listed as the worst of all global ports, at less than 8 percent.

Agriculture interests agree with the need to improve port performance, with American Farm Bureau Federation President Zippy Duval citing shipment delays affecting more than one-fifth of all agricultural foreign sales, costing U.S. farmers as much as $4 billion.  A conference between the two houses is needed before a final bill can go to the White House for signature.

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As we shop in the grocery store, it is hard to imagine how all the food we see and put in our cart arrives on the shelves. It’s a carefully coordinated, highly complex ballet with the railroads, trucks, river barges, ocean carriers and other transportation elements of the food chain. This is the second of a three-part transportation series on how our food moves around our country. Our previous post in this series explored the complexities within the trucking industry and the next one will examine river and ocean transportation.

It’s A Matter of Scale

We all know the story of railroads – or think we do. From childhood, we are immersed in images of the Mighty Iron Horse, in history books or western movies, or even in everyday travel along the more than 140,000 miles of railroad track in the United States. Who among us hasn’t found amusement in a boring road trip by counting the rail cars in the trains we see almost everywhere?

Yes, railroads helped build our nation, opening vast new areas to settlement and commerce. And they still make the wheels of commerce turn today, perhaps more than ever.

Source: Association of American Railroads

Look at the clothes you have on, or think about the dinner you ate last night, the cement used to pour the concrete for your house, the car you drive, and the appliances to keep your dishes and clothes clean. These are just a few items in your home that came by rail.

Freight railroads carry the high-volume commodities that fuel our power plants, our manufacturing industries, our food system and more. More than half of all rail shipments (by tonnage) involve coal, chemicals, minerals and crops like corn, soybeans, wheat and other staples of life. The remainder covers almost everything anyone can imagine, from major appliances and other consumer goods to individual parcels and consignments. Railroads, like other segments of the transportation industry, make both commerce and everyday life possible.

Farmers especially depend upon railroads to move huge volumes of crops to key export points all around the country — on the East Coast, West Coast, the Gulf of Mexico and the Great Lakes. Corn and soybeans often top the list of farm crops carried by major rail carriers to major export facilities, while short-haul rail lines are key links to the food processing and manufacturing customers closer to the actual farm or local grain elevator.

That’s A Lot of Bread

Think of it in terms the average shopper can grasp a lot more easily.

The average hopper car carrying crops such as corn, soybeans and wheat may contain as much as 286,000 pounds – up to five times the weight of a truckload of the same commodity. But to appreciate just how much that really is, consider a single hopper car of wheat – and what it translates into for the typical food consumer.

But Wait, There’s More

As impressive as the scale of operations may be, there’s far more to the story of railroads.

Railroads offer a degree of energy efficiency that often may be overlooked. According to the Association of American Railroads (AAR), railroads contribute only 0.5 percent – yes, less than a single percentage point – of all U.S. greenhouse gas (GHG) emissions. As a percentage of GHG emissions from the entire transportation sector, railroads account for 1.9 – 4.0 percent. (Automobiles contribute roughly 40 percent, trucks 34 percent and airlines and ocean transportation 11 percent each, according to transportgeography.org.)

Higher efficiency means less fuel – and fewer GHG emissions. Since the year 2000, advancements in technology and other improvements have helped increase fuel efficiency by an estimated 675 million gallons – or roughly 7.6 million fewer tons of carbon dioxide (CO2).

Sources: The Journal of Commerce; CSX Railroads 

Rolling into the Future

The International Energy Agency (IEA) has found that railroads use up to 12 times less energy than vehicles or airplanes and emit 7-11 times less GHG per passenger mile. Globally, railroads haul about 7 percent of the world’s freight yet account for only 3 percent of total energy use, according to IEA. AAR adds to the good news by noting that moving the same goods by rail rather than truck can reduce GHG emissions by up to 75 percent.

The railroad industry takes pride in those numbers, especially when considering the enormous power required to pilot trains weighing literally hundreds of tons at speeds of up to 75 miles per hour – and considerably more on some high-speed passenger rail lines.

The rail industry is built around powerful locomotives, with a typical four-axle locomotive weighing as much as 125 tons. Freight trains largely rely on a combination of diesel engines and electric motors, although the passenger rail system is much more advanced in its reliance on electric-powered units. This shift to equipment with greater fuel efficiency – and lower emissions of greenhouse gases – is a major industry focus.

To fulfill this goal, developmental efforts by the rail industry, suppliers and shippers continue to integrate computer technology into the rail system. For example, automatic idling is being used to reduce fuel consumption during stops, and automated controls much like those in cars and trucks help guard against driver error from fatigue or distraction. Innovative control systems also help find the best possible balance of speed, power, fuel consumption and emissions on a continuous basis during train operation.

Wabtec, a Pittsburgh-based rail technology specialist firm with over 150 years of international rail experience, has pioneered battery-powered locomotives as an environmental aid and has already conducted pilot testing with several major railroads.

Wabtec offers a 100-percent battery-powered heavy-haul locomotive with an estimated 10 percent reduction in fuel needs and emissions. This 4,400 horsepower behemoth boasts 20,000 lithium-ion battery cells, charged both by the same methods used by electric vehicles on the road today and by harnessing some of the enormous energy created by braking a moving freight train weighing 430,000 pounds or more.

Pilot testing of the Wabtec creation by major railroads already has begun on routes matching the lifespan of the battery charge, which is roughly 40 minutes at full power. Work on the system continues, with what Wabtec contends is as much as $500 million in potential fuel savings for the rail industry – and the reduced GHG emissions that come with it.

Beyond technology improvements, the railroad industry also is placing emphasis on expansion of the basic infrastructure needed to accommodate anticipated increases in freight demand. Better coordination and cooperation with other modes of transportation (“intermodal transportation”) and with other members of the supply chain also are a priority after years of disruption due to the pandemic.

Agriculture’s Contribution to Added Efficiency

The agricultural sector has been a driving force in the rail industry’s efforts to improve efficiency. Agricultural shippers were among the first to recognize the power of the “unit train” – multiple cars all carrying a single commodity to a single destination. The practice reduces the time and expense of repeatedly switching and arranging rail cars.

Today, the Department of Agriculture (USDA) and rail industry groups note that corn and soybean crops typically move in 75-car unit trains, and wheat in trains of 6-49. Utilizing railroads for these high-volume cornerstone commodities in domestic and export markets helps keep prices low for consumers and export customers.

Keeping the Wheels Turning

Demand for rail freight is expected to grow by about 2.7 percent annually – and perhaps a bit more as the post-pandemic recovery gains steam. An increase of 30 percent over the coming decade will require a great deal from the railroad industry.

Railroads advocates argue persuasively that increasing reliance on railroads to meet consumer demand just makes good sense. Railroads move with minimal labor needs. They are more climate-friendly. They can help reduce the simple wear and tear on roads, bridges and other infrastructure created by trucks and cars – and lessen the need for so much taxpayer spending on infrastructure in the process.

The Federal Railroad Administration (FRA) notes that the rail freight industry invests one of the highest percentages of revenues of all modes to maintain and add capacity – 19 percent, or nearly $25 billion annually. The results of that investment: “…(T)he U.S. freight rail network is widely considered the largest, safest, and most cost-efficient freight system in the world,” according to the FRA.

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Transportation is the common thread tying together every step of our modern supply chain, from dirt to dinner. It provides the mechanism for a smooth flow from one link in the chain to the next, speeding the astounding process of converting commodities into the finished food products we consume each day. Trucks, river barges, massive ocean vessels, railroads, even airplanes all play a vital role in the uninterrupted flow of our food.

An invisible thread

But as essential as all modes of transportation are to our food security, it’s far too easy for each transportation element, like trucking, to remain largely invisible, taken for granted because of its historic quiet competence and compliance in fulfilling its food-chain role.

At least, it was until Covid came on the scene and changed everything. Suddenly, the supply chain simply didn’t operate with its usual ballet-like choreography. The trucking system is front and center in any effort to understand how our supply chain operates, especially for the food we need for our families.

Behind the dizzying assortment of facts and figures, the trucking industry faces a whole host of challenges – many dating far beyond the pandemic. If anything, Covid merely poured gasoline – or maybe diesel fuel – on a fire that already was burning within the industry. The source of the fire: problems with attracting people willing and able to do the demanding job of piloting the sometimes massive and specialized machinery – and living the lifestyle that it demands.

“It’s always the truck”

My local grocery store manager responded to a customer unhappy with the lack of a particular product with a very simple explanation: “I’m sorry. But the truck never came in… It’s always the truck.”

The problem wasn’t a lack of a truck. Equipment isn’t the issue at all, according to most industry observers. Store shelves go empty and ocean vessels clog major ports often for the same reason: because there’s no truck – or more accurately, no truck driver — to move the cargoes along. It’s a shortage of the people trained for what can be a very tough job – and a rapidly aging set of current driving professionals.

Long before Covid, the trucking industry struggled to match the rising demand for freight movement with enough drivers. The average age for professional drivers is about 55, according to The American Trucking Association (ATA) and other industry and government estimates. That’s about a decade older than the average age for other comparable industries. And many of those are giving up on the job early, tired of the demands of the job and the constant fight for compensation and benefits.

Before Covid, the shortage of drivers was widely estimated at 60,000 jobs. With Covid, the gap widened to 80,000, and industry experts like ATA’s Chief Economist Bob Costello project the shortage could double to 160,000 in a decade.

Many sacrifices to consider

There’s no one reason for the shortage, but rather many. It begins with the realities of over-the-road trucking. The job demands long hours – up to 14 hours, with maybe 11 behind the wheel and the remainder doing paperwork, basic maintenance, minor repairs and other chores. In most situations, as an Over-The-Road (“OTR”) driver, you are capped at 60 hours total in seven days, 70 hours in eight days, then required to take 34 hours off. Expanding regulatory requirements grow more complex almost every year, from both federal and state agencies, with extensive record-keeping and strict compliance with substance-abuse protections.

Long hours with little movement and stress contribute to serious health issues, too.

OTR drivers suffer from higher-than-average rates of obesity and diabetes.

Smoking rates also are higher, and the Centers for Disease Control (CDC) has warned that drivers face a higher-than-average risk of Covid infection.

Beyond these health concerns, trucking remains a dangerous profession – the seventh most fatal profession in the United States, with about 1,000 deaths annually, or roughly one-fifth of all workplace fatalities.

Government figures from before the pandemic show truckers are 6.5 times more likely to be killed in job-related accidents than the average worker.

Long hauls also mean long, lonely periods away from home and family, unpredictable food and the stress that comes from knowing you are piloting a vehicle weighing up to 80,000 pounds at speeds of 60 mph on roadways where not all drivers are professional, or all weather conditions perfect.

Drivers have the second-highest divorce rate of any industry – better than 40 percent. Like other high-stress professions, OTR drivers are not immune from the dangers of alcoholism and substance abuse, and the industry and regulators combat the risk aggressively.

Which road to choose

Drivers also must choose what kind of driving to do. A commercial driver’s license – or “CDL” – is mandatory, and special license classes may be needed to haul specific cargoes. Local delivery services often demand less investment of time and money in training, and short-haul jobs help improve time at home but generally pay less. Specialized certificates – for hauling food-grade and environment-controlled cargoes or hazardous materials, for example, demand special training, often well beyond the basic training of up to six or seven weeks.

You likely begin your career making something on the order of $43,000 – maybe more in select areas like the northeast, even less in some others like the mid-south. Over time, the median salary will rise if you are patient and stay at the job with an established freight or trucking company, rising to $70,000 or more. Much higher compensation packages are possible, notably for specialized and highly-trained drivers.

Drivers who own and operate their own vehicle also can make more money – but must accept the higher risks that come with it, including higher costs for fuel, insurance, equipment maintenance, benefits, and other costs of doing business. It’s not surprising to see an extraordinarily high turnover rate for drivers – estimated by the industry at 90 percent per year – as drivers constantly seek out better, more rewarding opportunities with other trucking firms, strike out on their own, shift to less demanding careers, or simply go home and hope for more Covid relief funds.

So what’s to be done?

Despite the many reasons to be pessimistic, the trucking industry seems to remain surprisingly optimistic about the future – often for some surprising reasons.

One is the simple allure of the job to many. Few other professions offer comparable opportunities to fulfill a common sense of rugged individualism and independence or to satisfy the allure of the open road. More important, drivers repeatedly cite the importance of the role they play in serving important needs. They, perhaps, recognize the value of the supply chain in modern life, even if they don’t express it in abstract terms.

The American public seems to appreciate the role they play, too.  A survey by an organization known as “Trucking Moves America Forward” found that two-thirds of respondents have a “high regard” for truckers and the industry. Trucking professionals take pride in being widely known as “the Knights of the Open Road.”

Adding to that spirit, the fading effects of Covid may prove highly beneficial.

The economy is beginning to revive, with more jobs and robust consumer demand once again on the table. People seem ready to get back to work, especially as relief payments from the federal government fade into memory.

The industry seems eager to tap into this spirit to recruit new and younger drivers, with aggressive training and education programs and career promotion.

Also, simple economics have to be considered. To get more of something, economic theory goes, offer more. The industry must deal with the need to generate a compensation system more in line with the demands and expectations for pay, benefits and other forms of compensation of a workforce of the size and quality it knows it needs now and will need in the future. For consumers, this means a willingness to accept another element of the inflationary pressures that drive up prices for all goods – including food.

The industry also is working with the government to address concerns about the effect of well-intentioned but extensive regulatory requirements (such as more detailed, electronic record-keeping, and increased substance testing) that deter many prospects. Efforts to promote driving as an attractive career for women also are gaining traction, with the proportion of female drivers among some of the more established freight and trucking enterprises rising sharply, to as much as 20 percent in some instances. Driving teams also appear to be growing in number, including husband-wife combos.

The autonomous future

Automation also has emerged as a major area for attention by industry and government alike. Amazing technological progress has led to pioneering examples of self-directed transportation mechanisms, including some successful truck piloting systems.

Those technology-based solutions won’t provide an immediate answer to the question of what to do about today’s driver and overall labor shortage. Pew Research in 2017 found that fully half of all Americans have some degree of worry about driverless vehicles. Serious questions about safety and reliability remain to be resolved to the satisfaction of demanding legislatures and oversight agencies. But that work is underway, with developmental work for passenger cars and trucks moving along twin tracks.

Much of the attention centers on the degree of automation to build into vehicles. Prototypes generally have five different levels of automation, from simple driver assistance with tasks such as parking, all the way to complete control of the vehicle – a true driverless car or truck. Various automated features already at work in equipment in warehouses and other relatively low-risk environments, and companies such as Volvo and Tesla have made significant progress in turning the idea of vehicle driving automation into reality.

Automated driving features have expanded rapidly, with more than 31 million vehicles (out of roughly 289 million vehicles on the road) in 2019 having some level of automation.  It’s already a $32 billion industry, with projected growth rates of 15 percent or more.

Innovative applications of artificial intelligence and automation promise to play a significant role in finding a long-term solution to the labor issue confronting the trucking industry.

And none the least, supply chain specialists and the trucking industry ask for a little understanding and accommodation. Each segment of the food chain should look for ways to help the trucking industry – and every part of the transportation system – deal with the shortage of people and the resulting complications. Let’s find ways to smooth out the twists in the chain as best we can, as we work through the bigger, thornier issues.