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Opinion: As consumer habits change, where's the agricultural market heading?

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Walking through the grocery store or picking up takeout from a favorite restaurant offers consumers the opportunity to try something new or get supplies to make a home-cooked meal. Current trends have shoppers looking closer at the labels and marketing so they are more informed about what they are eating. The consumer is happy because they have exactly what they are looking for.

However, in the past year, consumers have often encountered empty shelves and even higher prices, forcing them to look for alternatives. Favorite restaurants have, at times, had limited offerings or a completely different menu. Where’s the food? Aren’t farmers still farming? The quick answer is yes they are; and they are struggling for a different reason. At the center of this issue of empty shelves, closed restaurants and changed menus was a severe disruption of the supply chain and breakdown of the markets.

The U.S. food expenditure trend has been increasing for decades in the shares of expenditures for food away from home. According to the U.S. Department of Agriculture’s Economic Research Service, the two expenditures were approximately equivalent in 2007. Today, 55% of food expenditures were for food away from home. While that may not seem a big concern to many, about 73% of that food away from home expense was found in the full-service and fast-food sector. The remaining 27% of expenditures include institutional service purchases, i.e. schools. Seeing the concern? When consumers shift from away-from-home purchases or school lunch purchases to at-home purchases, it causes an industry to shift in how it gets its food to the consumer. That, along with breakdowns at the processing level due to worker shortages and timing issues, the industry just could not keep or catch up for a significant portion of 2020. In 2021, the industry has not been able to shift back. So, the question is, have the changes become permanent or will there be new directions for the supply chain?

One of the biggest results of this supply chain breakdown has been a change in sourcing of food and ways to market food products. Fall deer hunters were the first group to experience this change. They were forced to find alternatives for their processing needs because there was no room for their harvest. When store shelves went bare of meat products because processors could not handle the inputs, farmers had challenges in marketing their livestock. Solution? The direct consumer interactions picked up. Buyers then relied on local meat processors to fill their freezers. In many cases, these meat lockers could not handle the influx of demand for their services and were booking processing appointments into summer of 2021. The only easing in the market currently has been the opening of processing facilities locally thanks to the Missouri Meat and Poultry Processing Grant Program. This is a silver lining to the industry, and it’s supportive to the current farm-to-table movement while bringing consumers back to the farmer.

Other marketing avenues include value-added opportunities and differentiating of contracts. We see an increased effort to connect with local food banks for options for current and future situations. However, at the heart of these ideas is connecting to the local demand – consumers get the products they need and farmers do not waste what they have.

Schools are back in session and eating out has increased, but the food expenses at home and away from home have changed. Based on the end of 2020 and current data, they have switched places. This supports some theories that consumers have changed. Consumers are eating differently, food is being sourced differently, and consumers are not just assuming they can get what they need whenever they need it. Fresh produce and livestock farmers now have alternative ideas of how to market their products.

As we continue the transition to the post-pandemic U.S. agriculture, we will see many supply chain fixtures in a different light. Farmers will still produce and consumers will still consume, but the connections are different and stronger. Where will the market be? It is an exciting time to find out.

Nichole Busdieker-Jesse is an assistant professor with Missouri State University’s William H. Darr College of Agriculture. She can be reached at nbusdiekerjesse@missouristate.edu.

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