Thursday, December 2, 2021

Climate change and extreme weather shrinks supply of America’s pie

TAMPA, Florida – For months, supply chain problems and labor shortages have been pressing on Mike’s Pies, a popular commercial bakery here that has been selling pies based on Mike Martin’s mother’s recipes for three decades.

But another powerful factor – climate change – exacerbates these problems. Its impact is less visible but more persistent, and its effects are being played out rightly as the food industry struggles to avoid shortages during the holiday season.

Many of the ingredients in Mike’s Pies – wheat, berries, honey, soybean oil and more – have been hit hard by climate and weather, including droughts, wildfires and power outages around the world. This is driving prices soaring and, combined with labor shortages and other obstacles, is causing chaos throughout the global food supply chain.

“We are cutting down on all the orders we ship; we cannot fulfill our obligations, ”Martin said.

For consumers, the impact on the food business means that seasonal stocks, from main courses to desserts, are significantly lower than before the pandemic, and meats and pies are at greatest risk of being completely out of stock, according to IRI. data provider for retail companies. Food prices are also rising strongly, surging 5.1% in October from last year, the fastest pace in many years, according to inflation data released last week by the US Bureau of Labor Statistics.

Read Also:  Consumer spending rises in September despite economic uncertainty

Economists generally expect labor and supply chain disruptions to disappear on their own as the pandemic subsides, but they say climate and weather impacts will remain a major threat to food and a growing number of other industries.

“There is nowhere to run and hide from extreme weather events,” said Michael Swanson, chief agricultural economist at Wells Fargo.

While global food conglomerates and agricultural giants are acutely aware of the climate threat, towards the end of the supply chain, Martin is more focused on tackling any crisis that faces him – whatever the cause.

“I don’t know what will happen tomorrow. I could go in and they said we couldn’t get the boxes or we couldn’t get the sugar, ”he said. “Orders are piling up, prices are skyrocketing, and we have to order more than we have ever ordered.”

Mary Provatas, CEO of Mike’s Pies and Martin’s right-hand man, caught the eye. It all started on July 30 when their Graham cracker crumbs seller, whom they had worked with for 20 years, emailed that due to labor shortages and equipment breakdown, their August 5 order would not be available for pickup for another five weeks. In September, the seller took only a quarter of his order, then it calmed down again, in October there were no crumbs.

“I sent them an email:“ Are we done business or not? Just be honest with me, ”Provatas said. This went on and on, and Provatas sent out frank emails almost daily. Still, there are no crumbs. “In the end they came back and said, ‘You want to cancel the rest of the orders, what do you want to do? “You have to finish at some point, right?” “

It was a crisis for Mike’s Pies. The company faced record demand from customers such as Red Lobster and Winn-Dixie and dropped by about a dozen employees. The price of most of the ingredients increased by 10-15%. The company couldn’t sell large cans of pineapple, coconut flakes, or Hershey’s caramel fondant.

But Graham’s cracker crumbs are the basis for much of what the company sells. They come from Richmond Baking, which has been in business since 1902 and produces crumbs in Indiana and Georgia. Bill Quigg, president of the company, says Richmond was in serious shortage.

“Labor supply is a problem. The number of pounds we can produce is directly related to how many people we can hire and how many will come on a particular day, ”he said.

At the same time, it faced sharp increases in prices for basic crumb ingredients such as soybean oil, as well as honey and spring red wheat.

Like Martin, Quigg isn’t sure what the climate and weather are to blame. “I’m not a commodity expert to answer that question,” he said.

But commodity experts say yes.

Commodity wheat prices have reached all-time highs, particularly for durum red spring wheat, said Janis Abbingsol, vice president of operations for King Arthur, one of the largest flour mills in the country.

“Every consumer goods company feels this, no matter what they do,” she said. “The pressure on hard red spring wheat is caused by weather and dry conditions. Mother Nature is the last to fly. “

Historic dry conditions have destroyed or damaged spring wheat crops in the west, northern plains and southwest, key wheat growing regions, says Kyle Holland, an oil and grain analyst at Mintec, which provides data on world commodity prices. The total number of bushels in the US is at its lowest level since 2002, he said.

And wholemeal crackers are made from wholemeal flour, a specially ground whole grain product with all the bran added.

Glenn Roberts, founder of Anson Mills, said the miller needs to retool his entire system to grind flour, and “no one is stopping their entire system right now to do that.”

Honey, another important ingredient in Graham cracker crumbs, is among the foods most affected by weather and smoke, many of which are directly linked to climate change, says Dave Gustafson, professor of biological systems engineering at Washington State University.

The honey was destroyed by drought and fires because the bees had nothing to eat. Beekeepers in the United States, mainly those located in North Dakota, South Dakota, Montana and Minnesota, lost 45.5% of their bee colonies between April 2020 and April 2021.

Mike's Pies worker adds toppings to lime pies.  (Photo by Zach Wittmann for The Washington Post).

Martin of Mike’s Pies sells about 1.7 million lime pie pies a year, but he has 20 more pies and pies – Mississippi mud pies and southern pecan pies, carrot pies, and red velvet pies. And his problems go far beyond cracker crumbs.

Tim Galloway, CEO of Galloway Co. in Wisconsin, which supplies Mike’s Pies with sweetened condensed milk, has a headache; he says climate change is partly to blame. Dairy prices skyrocket when animal feed prices rise, so a poor wheat harvest also affects what he pays.

“We are seeing sharper changes in the weather, [and] These factors are affecting dairy producers in these parts of the country, ”said Galloway, who buys most of the milk in Wisconsin. As production costs such as alfalfa for animal feed – 45% of US alfalfa cropping has experienced harsh arid conditions this year – become more expensive, Wisconsin’s small, family-owned dairies are closing. In 2019 alone, 10% of the state’s dairy plants closed, giving way to California, the country’s main dairy state.

The California dairy industry, mostly large-scale enterprises in the San Joaquin Valley, is also under pressure from a climate-related combination of drought, heat and the threat of tightening irrigation restrictions. As droughts become more frequent and severe, cows produce less milk and become more susceptible to disease and infertility.

Extreme weather conditions affected Galloway from Wisconsin in other ways. One of the contract packers the company works with has been closed for six weeks for lack of plastic bags due to the fallout of the polar whirlpool in Texas last winter, which caused a global plastic shortage.

And then there are imports like vanilla.

According to Marcel Goldenberg, head of Mintec’s product pricing department, the spice is grown primarily in Madagascar, which is under threat of hunger from climate change.

Goldenberg said that the southern part of the island has completely dried up and people can no longer live there. People and the vanilla crop have moved north, but he says farmers don’t have the tools or skills to grow it there, and much of the crop dies due to weather that fluctuates between too wet and too dry.

Mike Martin, owner and founder of Mike's Pies, at the company's plant in Tampa, Florida (photo by Zach Wittman for The Washington Post).

The food industry is highly aware of both its impact on the climate and its vulnerability to weather events. Agricultural companies such as ADM, Cargill and Bayer AG have pledged to work with farmers to implement practices that will reduce their carbon and methane emissions, and most major food conglomerates have pledged to significantly reduce their carbon footprint.

But as extreme weather conditions hamper supply chains and cause ingredient shortages, these multinational conglomerates’ own production lines often become safer. According to Bill Lapp, president of the consulting firm Advanced Economic Solutions, capacity shortages and labor-related constraints on manufacturing capacity are driving suppliers away from smaller customers.

Martin is a big man and his company is well known in the pie circles. But he is not Sarah Lee. By and large, it is small.

On the final day, he slips past rows of double ovens, each holding 92 cakes, but they are currently spinning on baking sheets of chocolate cakes. There is a 500-pound vat of pumpkin cheesecake filling, waiting for the cracker crust, and behind it is a board with scrawled daily orders. There are 2016 Key Lime Pies for Winn-Dixie, 776 Reese Peanut Pies.

He leans over to pick up a long tail of shrink wrap from the factory floor, looks a little angrily. He carefully monitors cleanliness. The coffee shop has a sign that reads: “You don’t have to be crazy to work here. We will train you. “

By now, Martin wanted to retire, play more golf, hand over the company to his two sons and a son-in-law. This was postponed by the pandemic.

Instead, he is in a hurry to get graham cracker crumbs. His right-hand man, Provatas, worked with phones until she found a new supplier, the Canadian company Kinnikinnick, which specializes in non-allergenic baked goods. They’re three times the price of Richmond crumbs, and Martin somehow doesn’t have much of a taste for gluten, but any port in a storm.

“May I say they are gluten free?” he wonders. “It helps sell pies in Colorado, but not Florida.”

His company moved to a new, much larger plant at the start of the pandemic, but he already feels overfilled with some of the “just in case” supplies he has had to do lately.

“We’re trying to stay ahead of this, but what can we do?” he said. “Some of the problem is that we don’t know what’s around the corner.”

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