COVID-19 Clouds Future of Food Processing Sector

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Farmscape for May 4, 2020

Full Interview 16:07 Listen

The Chief Agricultural Economist with Farm Credit Canada says the COVID-19 crisis is testing the adaptability of Canada’s food processing sector. Farm Credit Canada’s latest update indicates Canada’s food processing outlook has become clouded by uncertainty. FCC’s Chief Agricultural Economist J.P. Gervais says, going into the COVID-19 crisis, Canada’s food processing sector had been performing well but permanent transformations in the supply chain are resulting in significant changes.

Clip-J.P. Gervais-Farm Credit Canada:
With this crisis what really clouds the outlook is the shift in consumption. Not knowing when food services are going to resume normal operations, and post crisis is probably going to be different than pre-crisis, there’s a lot of unknowns. As that demand shifts, food processors are not supplying the food service businesses the same way that they are going to supply retailers. All different types of specifications are going to be different and so, for processors, it adds quite a bit of complexity to try to anticipate demand going forward. As well, when we get out of the crisis, even if we resume some sort of normalcy when it comes to operations in the food service, are we going to see some consumer’s behavior change? We’re seeing some of the changes now, more online purchasing, more cooking at home, more trying to find local products and so forth. All of that could have some sort of lasting implications for food processors.
When I said that the outlook was cloudy, I do think that it really is difficult for food processors to anticipate what the future looks like. We rely on a supply chain that’s really just in time in terms of the delivery but you need to still plan ahead and those processes are part of the normal operations of food processors. We can’t adjust them really fast and so all of that adds quite a bit of complexity for food processing.

Gervais says Canada’s food supply is showing resilience and adaptability but he expects a shift in the mix of available food products as supply chains are redesigned to account for the COVID-19 challenges.

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