BUSINESS

Produce industry warns of potential shortages as supply chain issues mount

BARRIE —
Fearing what they describe as a “serious threat” of shortages of some items in supermarkets, produce organizations in Canada and the U.S. are calling for government assistance to address issues affecting the global supply chain.

In a joint statement issued last week, 21 industry signatories outlined several ongoing supply chain disruptions, including congestion at ports, delays and “exploding costs” in container shipping and the cascading effects of inconsistent product delivery.

They also cited concerns relating to ongoing labour shortages, input shortages, and panic buying and stockpiling from consumers.

The statement said that without “multilateral engagement” to find solutions, the issues will “create long lasting impacts to the detriment of all North American economies.”

The signatories said this could include potential bankruptcies, legal disputes, industry consolidation, inflation, inaccessible food supplies and more.

“Time is against us,” the statement reads. “And the necessity of addressing these challenges now cannot be understated.”

Ron Lemaire, president and CEO of the Canadian Produce Marketing Association, which signed the statement, said “substantial increases in costs” and delays across the supply chain have left Canada in a “dire position.”

“We’re there because we’ve been looking at compounding challenges across multiple areas within our supply chain over the last year, but also since the beginning of the pandemic,” he told CTVNews.ca by phone on Thursday.

WHAT’S GOING ON?

Joe Sbrocchi is the general manager of Ontario Greenhouse Vegetable Growers, which also signed the joint statement.

He told CTVNews.ca that currently there is “so much product” sitting at ports, adding that there are ships waiting in the water because there is no room to offload their goods at the receiving ports.

Sbrocchi said that because fresh foods perish, the immediate issue is getting those goods and offloading them into the marketplace as quickly as possible.

He said the average time for goods to be on the water used to be 15 days, but now some items are out for up to 60 days, plus the time spent at the port.

Sbrocchi said this is causing “all manners of disruption.”

“When the product finally comes in, it’s going to be on its last legs, if any legs at all,” he said during a phone interview on Thursday.

“So you’re going to have incredible cost increases [and] half of this stuff will probably be thrown away,” he continued.

What’s more, Sbrocchi said, this has a “domino effect.” He said that if shipping containers –especially refrigerated ones — cannot be offloaded and re-added into circulation quickly, it will cause further delays.

Lemaire said there are also substantial labour shortages that are impacting the supply chain.

“Especially at the warehouse level,” he said. “About 82 per cent of the businesses that we’ve worked with in our organization are reporting a labour shortage.”

He said that right now, there is a shortage of approximately 100,000 truck drivers in North America.

Ultimately, Lemaire said, in order to get products to consumers, “all these pieces have to connect.”

“And they have to connect quickly with highly perishable products,” he said.

END OF CANADA’S GROWING SEASON

What’s more, the statement also noted that Canada and the U.S. have reached the end of the growing season for 2020.

This means the country will begin importing more goods, requiring an even more robust supply chain.

According to data released by Agriculture and Agri-Food Canada, in 2020, Canada ranked eighth among the world’s top importers of fruit, spending 6.6 billion in 2020.

The latest available data suggests in 2019 Canada was also among the top importers of vegetables. The 2019 data from Agriculture and Agri-Food Canada says the country ranked fourth in the world, spending 3.5 billion on vegetable imports.

According to Sbrocchi, things will be “very challenging over the next little while.”

Sbrocchi said consumers will likely feel the impact at the grocery store, saying there may be times when certain things are not available, or a surplus of one item is available as retailers try to sell them before they go bad.

Sbrocchi pointed to apples as an example, saying Canada imports many from Chile and South Africa.

While you might see an abundance of one variety in your grocery, Sbrocchi said it might be hard to find another.

“You may not see your favourite apple for a while, [and] you may not see other things that come especially from the Southern Hemisphere,” he explained.

Lemaire said up until now, the majority of the increasing costs associated with the supply chain issues have been carried by the industry.

“It’s becoming very difficult, especially since we are a margin-based business of around three to five per cent, which is very small,” he explained.

Now, Lemaire said those costs could potentially move to the consumer.

“It’s unfortunate because it’ll impact those that can least afford an increase in their food costs with the challenge around inflationary costs and the increased cost of living that the pandemic has influenced,” he said.

SOLUTIONS?

The statement said the current situation echoes some of the challenges that were faced in the spring of 2020 at the beginning of the COVID-19 pandemic.

“With the added complications of heavier border traffic, consumer purchasing habits that have been significantly increased over the course of the pandemic, and government support programs that are winding down or have ended,” the joint statement reads.

The organizations said it is “imperative” that governments work “urgently” with all parts of the supply chain in order to “mitigate the serious threat of food insecurity and food shortages.”

Sbrocchi echoed this, saying there is “no one party that can solve this independently.” -He said it will take the help of federal and provincial governments, as well as the co-operation of retailers and wholesalers.

“It requires all of those people to come to the table to help sort this out,” he said.

Consumers too can help ease the burden by changing their shopping habits in the short term.

“The supply chain has been very robust during COVID-19. But now as we move into the colder months, and we start to import our fresh produce from places like Latin and South America and Asia, we’re going to notice it a bit more,” Dalhousie University research program coordinator Janet Music told CTV News Channel Thursday.

“But we can also turn the frozen food aisle to get fruits and vegetables as well. They’re fresh frozen, nutritious and healthy, and available all year round.”

Music adds that by shopping smarter, consumers can save money and reduce food waste that ultimately drives prices up.

“As consumers, we need to be more cognisant in our own behaviour when it comes to buying food,” she said. “Really making use of flyers and coupons and ‘enjoy tonight’ stickers. This will help our grocery dollars, but it will also cut down on food waste we have here in Canada.” 

According to Lemaire, last week industry partners requested the federal government create a supply chain commissioner to would lead a joint industry-government task force to “try to come up with some quick solutions.”

Lemaire said that as of Thursday Afternoon, they had not yet heard back.

CTVNews.ca reached out to Agriculture and Agri-Food Canada to determine whether the government plans to appoint a supply chain commissioner, and for a potential timeline, but did not hear back before this story was published.

Sbrocchi said ultimately, this is an issue that will take time to solve, adding that consumers will need to “be patient.”

“We’ll get there — but not overnight,” he said.




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