Kinks in the supply chain (Off the Secretary’ Desk)

(Editor’s note: Douglas Fisher is the New Jersey Secretary of Agriculture.)

We all are experiencing a new dynamic in receiving goods and services in the ongoing COVID-affected economy. How many times have you heard a shopkeeper, contractor, or repair person say how much they want to serve you, but the parts, or the entire item you are looking for, are delayed due to shipping issues or understaffing?
A marvel to be sure, the just-in-time systems design and execution, which worked fabulously these past few decades, is unsustainable as a model of efficiency because it assumes too much. Things are changing in rapid fashion that were more standard just a few years back.
Weather patterns affecting transportation, labor demands and shortages, political unrest, terrorist threats — these are all factors that have a higher profile now.
Just-in-time assumes that every step in the process is predictable and can be controlled so that there is little shrinkage or wasted inventory or human power.
Computer algorithms are supposed to take care of proper warnings and marshal the forces needed to produce and ship items at the exact point of need. It’s all expected to flow to its intended recipient, be tracked and accounted for by “the system.”
Meanwhile, it’s not working. Cars sit in parking lots at dealerships waiting for computer chips so inventory can be moved.
Toys are floating on ships, waiting for a diminishing opportunity to be unloaded in time for holiday sales. Building materials and major appliances are suffering the same conditions, and costs are increasing while inflation rises rapidly.
In the older economy that built our country, the system had contingencies for disruptions. Parts were always available because they were stocked, and inventories were larger. The stock-in-trade was that goods were on hand.
Now, some feel anything sitting on a shelf or in a bin is waste to be honed down. I do not subscribe to that thinking. It’s an excuse to squeeze out the last penny and show a stellar short-term profit at the expense of workers and consumers.
While hard goods are traditionally subject to this practice and may no longer be best handled this way, produce and other agricultural products are more suited to just-in-time supply chains because they are perishable.
However, more of what is coming from our farms may be in the form of value-added products that can be subject to more inventorying.
Looking ahead, what if the same circumstances facing durables translates in an extensive way to the production of non-perishable farm-produced items?
Currently, there is too much waste in the global production of food.
For the most part in preproduction, the farmer just takes it on the chin, so to speak, and does not harvest the crop if prices they expected to find at the time of harvest drop and don’t cover the expenses in any reasonable way.
Because we currently overproduce, it seemingly is not a problem in the marketplace. However, as farmers drop out because the system denies them fair payment, we just might be searching for product, period.
This issue could be addressed by moving more fresh farm products away from just hoping for good prices at the time of harvest to contracting more of what ultimately is sold before planting even starts.
While there may be a slightly lower price paid in such a contract, and farmers may want to reserve some parts of their fields for gambling on a better price at the time of harvest, there would be less waste from plowing under entire fields because prices drop below what might have been expected.
Farmers in New Jersey and nationwide can harvest crops and raise livestock that can go from farm to fork in hours. The products need not be loaded into shipping containers and put on ocean liners to cross the seas to be unloaded at ports, broken down and subject to multiple layers of logistics for market.
From every perspective, a mix of older and newer approaches to marketing systems should be the answer.
From the environment to the basics of perishables, why is it that New Jersey and U.S. farmers don’t get the first order? It is mostly because someone in the middle is working to wring out every dollar of profit from a twisted system of sourcing beyond what is in our backyard and going out of local markets.
If farmers could count on a reasonable price, we could go back to producing more food where we live and we would not even feel the need to ask where our food comes from.
Let’s not lose one of the greatest achievements in modern history and what made us great in the first place, a vibrant local agriculture.
Without agriculture on our shores, we will become another country in search of food, and we will pay dearly for something we did not need to let happen. The message to consumers should be clear. Demand American, homegrown farm products.
If you pay a little more, it’s worth the price to keep us food secure.