Colorado farmers and ranchers adapt to uncertainties
By Coleman Cornelius
Published July 10, 2020
Agriculture is crucial to the Colorado economy, contributing an estimated $41 billion annually and employing some 173,000 people. The health of farmworkers is an important focus, especially with increased activity during harvest. Photography: Joe A. Mendoza and William A. Cotton / Colorado State University
Before the COVID-19 pandemic, the phrase “food supply chain” seemed arcane to many of us. It soon became as obvious as a kink in the garden hose: The supply was there; it just wasn’t flowing.
The first clue, a point of shared humor, was the disappearance of toilet paper from supermarket shelves last spring, as stay-at-home orders loomed and people foresaw weeks in quarantine. Then, anxious shoppers bought most everything: staples such as beans, flour, pasta, potatoes, and rice; later, meat and poultry. Bananas, like other produce, were there, gone, there again.
“A pandemic that is global in scope causes a cascade of effects in food and food supply,” said former Secretary of Agriculture Tom Vilsack, president and chief executive officer of the U.S. Dairy Export Council and an adviser to the CSU System on food and water initiatives. “We were not well prepared for the disruptions, and it took a while for people to realize it wasn’t about a food shortage. It was about complicated distribution issues.”
Even packaging has played a critical role. Baker’s yeast, for instance, vanished from grocery stores as homebound cooks dusted off their bread machines. Supply wasn’t the issue; instead, the gargantuan food system is designed to deliver yeast to commercial bakers in big batches, not to retailers in little packets.
Consumers – those of us who eat – might lack knowledge about food production and distribution, an outgrowth of urbanization. But at least a few of us were ready to figure it out when facing those bare shelves. Even as grocers caught up, a change in buying habits sprouted: The demand for locally grown food, building over four decades, has spread among a number of people with access to it. Many farms and ranches working in community-supported agriculture are sold out of customer shares, with long lists of fresh food deliveries mapped out for months to come. Same goes for some of those using other direct-to-consumer outlets, including farmers markets, farm stands, specialty shops, and online ordering for pickup or delivery.
“There are tradeoffs between efficiency and resilience, and one thing the pandemic has shown us is the need to think about those tradeoffs with more intention. We’ve developed an incredibly efficient food system, where we can provide safe, affordable food for the vast majority of Americans. But we need a better understanding of the pinch points.”
– Becca Jablonski, CSU food systems economist
“COVID startled us awake about how essential farmers and ranchers are to our lives and our state,” Kate Greenberg, Colorado commissioner of agriculture, said. “When you know your farmer or rancher, you don’t have to wait for the supply chain to catch up.”
Given the global economic slump caused by the pandemic, analysts expect net cash farm income, a widely used indicator, to drop by 15 percent nationwide this year, even accounting for billions in emergency financial aid for farms and ranches, said Tom Lipetzky, director of marketing programs for the Colorado Department of Agriculture. The hit will likely be similar in Colorado, with uncertain effects on food prices, he said. The projection is significant, since 70 percent of U.S. farms run with slim profit margins of less than 10 percent, according to the U.S. Department of Agriculture.
Growth in direct-to-consumer food sales, a market crucial to many small and midsize farms and ranches, has offered a flicker of hope for some producers. Expanded sales, because of associated costs, don’t always equate to increased profit. Even so, the apparent resilience among some smaller growers is now the subject of studies and policy debates focused on a U.S. agriculture and food industry that annually contributes more than $1 trillion to the national economy and is built chiefly for maximum efficiency. That efficiency is the very reason most of us enjoy inexpensive, abundant, and safe food – but it also means the system generally lacks the flexibility needed for quick response to broad market disruptions.
“There are tradeoffs between efficiency and resilience, and one thing the pandemic has shown us is the need to think about those tradeoffs with more intention,” said Becca Jablonski, an assistant professor and food systems economist with CSU’s Department of Agricultural and Resource Economics and Food Systems Initiative. “We’ve developed an incredibly efficient food system, where we can provide safe, affordable food for the vast majority of Americans. But we need a better understanding of the pinch points.”
Jablonski and her colleague Dawn Thilmany, a professor of agricultural economics, recently joined researchers at the University of Kentucky and Pennsylvania State University in an examination of the pandemic’s effects on local and regional food systems across the country. The team is working with a $1 million grant from the USDA and more than a dozen food industry trade groups. They seek to understand market disruptions, successful adaptations, and economic impacts, with findings expected to shape policies and preparations for future crises. Another project, funded with more than $2 million from the Foundation for Food and Agricultural Research, is studying those and related issues. Colorado State’s research-based input is “profoundly important,” Greenberg said.
Understanding dynamics in local and regional markets is vital, Jablonski said, because farmers and ranchers in these markets typically are underrepresented in research and policy spheres. Moreover, local markets often are entry points for new farmers and ranchers.
The CSU Food Systems Initiative leads wide-ranging research and Extension activities, maintaining close ties to industry, government agencies, food banks, marketing associations, and Colorado communities – resulting in a multilayered, 360-degree view of state and regional agriculture.
The group is contributing in many ways during the pandemic. Notably, its economists wrote a policy paper submitted in March to the U.S. Senate Committee on Agriculture, Nutrition, and Forestry as Congress was drafting the $2 trillion emergency aid package known as the CARES Act. The report projected up to $1.32 billion in nationwide economic loss resulting from the expected impact to farms and ranches selling through local and regional markets; the analysis effectively advocated for economic relief through the complete food supply chain, small and midsize producers included. Through the CARES Act and other programs, the USDA is distributing $19 billion in relief funds to farmers, ranchers, and nonprofits such as food pantries that help people in need.
That was just a start for the CSU Food Systems Initiative. During the pandemic, the group has released health and safety guidelines for regional meatpacking plants and farmers markets. The team has studied the potential effects of COVID-19 on farmworkers and their families, along with ways to reduce those threats; these concerns are urgent with the approach of peak harvest season, when farmworkers are indispensable in getting fruit and vegetables from field to market. A task force of the Food Systems team also is providing economic analysis for the Colorado Department of Agriculture, Governor’s Office, and Legislature during the pandemic.
“The markets are going to survive, and producers within them are going to survive. But a lot of them are saying, ‘It’s a brave new world,’” said Thilmany, a leader of CSU’s food systems research.
The researchers don’t have to look far for anecdotal evidence of adaptations. They began when the pandemic’s domino effects shredded the U.S. economy, starting with shutdown of restaurants, schools, and other major links in the food supply chain. For a taste of why that matters, consider: In 2019, Americans did 55 percent of their food spending away from home; we often eat out more than we eat in, and the food system is geared to fill that demand. The pandemic delivered other blows, including more trade disruptions, widespread unemployment, and outbreaks of worker illness that forced closure of the nation’s largest meat and poultry processing plants.
As food producers lost major markets, consumers looked to new and different outlets – in some cases, close to home. “When you go into the grocery store and the shelves are empty, it triggers something in your brain,” said Hadyn Christensen, who graduated from CSU in 2013 with a degree in soil and crop sciences and owns Colorado Fresh Farms north of Fort Collins.
As he recently sold early-season produce at the Larimer County Farmers’ Market, Christensen said he panicked in early March and “started thinking about how to reach people.” He tapped into the pandemic’s uber-local food trend by growing and selling vegetable starts to backyard gardeners. Christensen put together victory garden packages – including tomatoes, cucumbers, squash, carrots, beets, and herbs – inspired by those planted during World War I and World War II to build food supplies and morale. He added a sales feature to his website and advertised on Facebook; the packages sold out immediately. Now, Christensen is using his website to let customers place produce orders in advance, with times set for easy pickup at the farmers market. The idea even complies with social-distancing guidelines.
On the Western Slope, the ranchers who partner in Homestead Meats likewise were set to fill locavore demand. At the start of the year, they were readying to open a retail store in Delta, Colorado, to sell locally grown beef, pork, and lamb, along with eggs, artisan cheese, and other cottage food products. The shop would be an additional outlet in the group’s direct-to-consumer business, supplying meat from local pastures to local plates.
Then the pandemic mushroomed and sent shock waves through agriculture. “We had worked for six months to put in the infrastructure, but we had to ask, ‘Is this the right time to open the doors?’” said Robbie LeValley, a CSU alumna who runs LeValley Ranch with her husband, Mark. The couple are among the founders of Homestead Meats, a 25-year-old business that includes a USDA-inspected meat processing plant. “We knew we had a steady local customer base,” LeValley continued. “What we didn’t know was what kind of foot traffic we would have when stay-at-home orders were put forward.”
The partners opened the retail shop in March. The stay-at-home orders came. But so did the customers, since food producers and grocers were authorized to continue operating. In fact, revenue for Homestead Meats was up 17 percent in the first six months of 2020, compared to the same period last year. “There is tremendous interest,” said LeValley, who worked for many years as regional range and livestock specialist for CSU Extension. “It’s very rewarding to sell direct to consumers and to have that interaction.”
Smaller farms and ranches may be able to bend and stretch in the face of market disruptions because they often direct an array of operations at a scale that allows for nimbleness: They grow, process, package, distribute, and sell. If a farm loses restaurant business, it might open a roadside stand or start online sales. “It continues to amaze me how much they adapt and change to make it work,” said Wendy White, a CSU alumna who manages the Colorado Proud program, which promotes food grown and processed by nearly 3,000 farms, ranches, and other businesses in the state.
But there’s a major difference between big and small: Niche producers must command a premium, and customers must be willing to pay it. By contrast, the nation’s food system as a whole has evolved to produce lots of food inexpensively. “We want food to be convenient, and we want it to be cheap. That puts a lot of pressure on people who grow and sell it to us,” Vilsack, the former agriculture secretary, said.
Last year, Americans spent an average of just 9.5 percent of their disposable personal income on food, according to the USDA. Low-income families spend a much greater percentage of their budgets on food, and their access to fresh and nutritious products is a glaring problem exacerbated by the pandemic. Yet, generally speaking, Americans for years have spent less of their household incomes on food than people in other developed nations, Vilsack said.
To fill demand, players in the food system go big to achieve economies of scale, resulting in consolidation and fewer, but larger, operations that interact at a national and global scale. Big ships can be slow to turn; that has led agricultural economists at CSU and elsewhere to ask whether policy propellers modeled on the adaptability of smaller food producers might help chart a course for future crises.
Meantime, many farmers and ranchers are seeking new and established ways to manage risks, a familiar tack for people whose yearly profits can be wiped out by a late freeze or hailstorm.
“With COVID-19, uncertainty is higher than it normally is,” said Roger Mix, a CSU alumnus and third-generation potato farmer in the San Luis Valley of Southern Colorado. Even before the pandemic emerged in China late last year, Mix had invested in seed, fertilizer, equipment, and other needs for this season’s fields of russet potatoes, quinoa, barley, and forage. He planted and planned to the extent possible. “All of the markets are so interwoven,” said Mix, who serves as vice president of the Colorado Fruit & Vegetable Growers Association. “You have so many different factors that can come down on you that you have to try to be optimistic.”