The Agriculture Department on Friday awarded $1.2 billion in contracts for a new commodity purchase program designed to aid produce, dairy and meat industries grappling with COVID-19 bottlenecks in the U.S. food supply chain.
The awards account for 40 percent of a $3 billion food purchase plan that Agriculture Secretary Sonny Perdue announced April 17 to move surplus food out of the market and to food banks, community and faith-based organizations and other nonprofit groups that have seen demand escalate as the U.S. unemployment rate climbed from 3.5 percent in February to 14.7 percent in April.
Under the Farmers to Families Food Box program, the contract winners will take orders from nonprofit groups for fresh fruits and vegetables, dairy products and precooked meat products, pack those custom orders in boxes with portions for families and deliver them to the organizations that placed the orders. The contracts cover deliveries from May 15 to June 30.
The Agricultural Marketing Service said the program will spend $461 million to make fresh fruit and vegetable boxes, $317 million for dairy boxes, $258 million for meat boxes and $175 million for combination boxes of fresh produce, dairy or meat products.
“These food purchases will help the hungry while providing income to farmers and ranchers who have seen some markets for their food disappear during the COVID-19 pandemic,” American Farm Bureau Federation President Zippy Duvall said in a statement.
The program will draw on a network of private distributors to get the food to participating nonprofit groups. By opening the program to the companies, the Agriculture Department also is aiding a part of the food supply chain affected by COVID-19 restrictions that closed restaurants, school cafeterias and college food service operations. Farmers and the food service industry took a financial hit.
Beef, chicken and hog producers took an additional blow, as key meatpacking plants closed or slowed processing lines after employees either tested positive for the virus that causes COVID-19 or became ill. Some hog farmers have begun euthanizing market-ready animals that they are unable to send to slaughterhouses.
Mollie Van Lieu, senior nutrition director for United Fresh Produce Association, said her organization had argued for including produce distributors as a way to keep part of her industry’s supply infrastructure intact. Van Lieu said using commercial distributors will aid food bank operators that, because of concerns about COVID-19 transmission, may not have enough volunteers to repackage bulk deliveries of food into manageable packages for recipients.
“You have these folks with skills, and at the same time you have food banks with an extraordinary rise in needs, both in how many clients they have coming to visit them. Because of the reduced volunteer work force, they’re just not able to do the repackaging of fresh produce,” Van Lieu said.
"We’re hopeful it will provide some relief to distributors and growers,” she said of the commodity program.