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Coronavirus Lockdowns Throw Agricultural Supply Chain Into Disarray


Coronavirus lockdowns have thrown the United States agricultural supply chain into disarray. Supermarkets and grocery stores are trying to restock their shelves. People are flooding food banks. But farmers are having to pour out milk, crush eggs and give away produce. Stacey Vanek Smith of our daily economics podcast The Indicator from Planet Money finds out what's going wrong with the help of a potato farmer in Idaho.

STACEY VANEK SMITH, BYLINE: Ryan Cranney runs Cranney Farms in Oakley, Idaho. Ryan says potatoes are a great crop. The price is steady. Demand is basically always growing because, you know, French fries.

RYAN CRANNEY: Up until the COVID thing. And then all that changed.

VANEK SMITH: Ryan had all of these potatoes he had just harvested...

CRANNEY: Maybe 2 million potatoes.

VANEK SMITH: ...And nobody to buy them.

CRANNEY: Isn't that crazy?

VANEK SMITH: So he and his team just dumped them on the ground in this giant pile. It was huge. It was nearly two stories high. Ryan took a photo and posted it on his Facebook page with a note that read, free potatoes. Come on by.

CRANNEY: And it just took off like wildfire.

VANEK SMITH: Thousands of people showed up from as far away as Kansas, Nevada.

CRANNEY: Somebody called from Ohio, which is - I mean, that's, like, 24-hour drive.

VANEK SMITH: Because people need food right now. Food banks are flooded with requests. Supermarket shelves are empty. Still, right now, farmers like Ryan all over the country are pouring out milk, trashing their potatoes and eggs. So what's going on? The problem boils down to two things.

DANIEL SUMNER: How streamlined and specialized things are.

VANEK SMITH: Daniel Sumner is an agricultural economist at the University of California, Davis. Daniel says the food chain in the U.S. has gotten incredibly efficient in recent years. Growers grow exactly what a certain restaurant or a certain company needs. They package it for that company. They ship it right to that company.

SUMNER: Somebody growing exactly the kind of lettuce that McDonald's needs for their hamburgers - that's been a great system.

VANEK SMITH: Still, Daniel says, when the system gets disrupted, there's not much flexibility. It's hard for growers who grow for a fancy restaurant or a giant fast food chain to pivot to selling in a supermarket. They're so specialized, they can't adapt right away.

SUMNER: It causes consumer prices to go up, and shortages appear to consumers. And at the same time, the demand for the farm product goes down.

VANEK SMITH: This is exactly what's happened to Ryan Cranney with his potatoes. Ryan normally ships his potatoes to restaurants in 50-pound boxes or 2,000-pound bags. Now he's trying to get his potatoes to supermarkets. But he cannot find a way to pack them.

CRANNEY: We aren't set up to pack small bags. Well, then people are like, why don't - you know, why don't you send, you know, the big boxes to the grocery? - which we had sent some big boxes to grocery. But then the consumers kind of kicked back against it.

VANEK SMITH: Some farmers are trying to sell 50-pound boxes of potatoes on Amazon for around $150 a box. But mostly, the potatoes are just rotting in fields.

CRANNEY: You know, we have $6 million in potatoes that are in storage right now.

VANEK SMITH: Ryan has grown all of those potatoes for specific buyers. They're presold. Still, he's worried that those places will not be able to pay for the potatoes they ordered all those months ago. He says the potatoes will keep until about August. And if they go bad, his farm will be in a pretty dire situation.

Stacey Vanek Smith, NPR News.

(SOUNDBITE OF THE ACORN SONG, "MISPLACED") Transcript provided by NPR, Copyright NPR.

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.