In early July, S. Carolina farmer Jeremy Storey dropped off an order of eggs at a restaurant’s back door as planned and continued on his way. But 6 hours later, he got a call that the eggs were never collected — the restaurant had suddenly closed because a staff member tested positive for Covid-19, and nobody canceled the order. After half a day in the hot sun, the eggs could no longer be eaten. “Half the restaurants we’re going to now, we find out upon delivering to them that they’re closed,” he said. He’s now sitting on a surplus of about 24,000 eggs, with no idea when, or if, things will stabilize.
The unpredictability is a major problem for farmers. If they can’t forecast what demand for eggs (and other products) will look like tomorrow, much less months out, they run the risk of overproducing — which would leave them with expensive surpluses — or underproducing, which would prevent them from having enough product on hand to meet demand.
Now, just as restaurants began to resume dine-in service, a new surge of coronavirus cases has paused reopening plans and put farmers back in limbo — and made it even more difficult to forecast. Planning is essential to farmers because they have to anticipate their customers’ demand months, and sometimes years, ahead of when they deliver so that they have enough time to grow crops or raise animals, writes CNN Business (July 16,2020).Uncertainty “is really what’s causing the problem,” said a union exec. “There’s no end in sight. That makes it “really hard to plan for the future.” If the uncertainty drags out for another year or two, he said, some farms and restaurants will go out of business. It also means that some restaurants that make it through this dark period won’t have a steady source of supply at the other end.
Classroom discussion questions:
1 Should demand during the pandemic be excluded from future time-series forecasts?
2. With so much uncertainty, is it better to raise or lower production for the next agricultural cycle?