Specialty crop growers typically sell a good percentage of their produce to restaurants. When the COVID-19 pandemic shut down restaurants across the country, many specialty crop producers were left scrambling to find alternative markets for their products. To make things worse, specialty crops typically have short shelf lives (i.e., most fruits, fresh salad greens, green onions, herbs, green beans, asparagus, broccoli, mushrooms, sweet corn, and squash), and those that were unable to find other buyers of their produce had to let their crops rot in the fields.1
Thankfully, there are opportunities for specialty crop producers to mitigate part of the financial damage resulting from COVID-19 and the subsequent decrease in restaurant sales. Some producers have been successful pivoting from supplying restaurants to other sales channels, and there is relief from the US Department of Agriculture (USDA) through the Coronavirus Food Assistance Program (CFAP) and the Farmers to Families Food Box Program.
Pivoting from Restaurant Sales to Other Channels
Some small and mid-sized specialty crop producers that had relationships with other sales channels found that, although restaurant sales have plummeted as much as 78%,2 other sales channels have increased. Some examples include
- Grocery and supermarket sales increased by an average of 28% (during March and April 2020).3
- Online grocery sales increased 40% year over year (although they still only account for around 3% of total grocery sales).4
- Farm market sales have grown in localities that kept their markets open. A survey that estimates how farm market sales have changed will be available soon by the Clemson Extension Agribusiness Team.
- Members of the Clemson Extension Horticulture Team reported at a meeting on April 3, 2020, that most u-pick, on-farm (pickup), and off-farm (delivery) sales have increased substantially, especially if the farm already had a customer following and/or an online presence.
There is additional anecdotal evidence being reported by the media of success in sales channel pivoting. News stories are reporting on how farmers who were concentrated in restaurant sales have been able to make quick changes to take advantage of other sales channels.5 Other stories report on record farm market sales, thousands of dollars in pre-sold produce, and long lines of cars waiting for their trunks to be filled.6
Coronavirus Aid, Relief, and Economic Security (CARES) Act
Some farmers, especially large specialty crop producers, cannot easily change sales channels and have experienced losses due to unsold/unharvested crops. Fortunately, there are some provisions in the CARES Act for the USDA to provide some relief. This relief comes in two forms.
Direct Payments to Producers
The USDA has identified crops that are eligible for direct payments under the Coronavirus Food Assistance Program (CFAP).7 The application process opened on May 25, 2020. For more information on the program and eligible crops, visit the CFAP website. You need to apply at your local USDA Farm Service Agency (FSA) office, and the USDA has a list of office locations on their website. Keep in mind these payments only help for losses sustained during mid-January 2020 to mid-April 2020. Losses after mid-April are not currently covered.
USDA Farmers to Families Food Box Program
The USDA Farmers to Families Food Box Program has been purchasing specialty crops to be delivered to food banks.8 The impact of this program is not yet known, but it is creating a market opportunity for some specialty crops. The budget for this program is $3 billion. More details can be found on the USDA Famers to Families Food Box website. Many produce contracts have already been filled; however, contracts renew at the end of June. The list of food box fulfillment contracts is available on the website. It would be wise to reach out to these contractors to see if they need more produce for the food boxes in the future.
Clemson Extension Agribusiness Program Team Resources
COVID-19 resources are available on the Clemson Extension Agribusiness Team website.
Specific resources for specialty crop farmers looking to open new sales channels are available on the Marketing page of the website.
- Brinkmann P. Farmers destroy crops grown for restaurants, hotels. United Press International, Inc. 2020 Apr 6. https://www.upi.com/Top_News/US/2020/04/06/Farmers-destroy-crops-grown-for-restaurants-hotels/2211585843469/.
- Restaurant365, POS software analytics as of April 1, 2020.
- Womply. Here’s exactly how COVID-19 fears have impacted sales at local grocery stores and supermarkets nationwide. Womply Business Software Data Analysis as of April 27, 2020. https://www.womply.com/blog/heres-exactly-how-covid-19-fears-have-impacted-sales-at-local-grocery-stores-and-supermarkets-nationwide/.
- Redman R. Online grocery sales to grow 40% in 2020. Supermarket News. 2020 May 11. https://www.supermarketnews.com/online-retail/online-grocery-sales-grow-40-2020.
- Barber E. Family farm finds a new way to stay afloat. MSN News. 2020 May 24. https://www.msn.com/en-us/news/us/family-farm-finds-a-new-way-to-stay-afloat/ar-BB14wy7U .
- Kleinpeter B. Georgia farmers sell $80,000 worth of produce before drive thru event even starts. 2020 May 28. https://www.msn.com/en-us/foodanddrink/foodnews/georgia-farmers-sell-80-000-worth-of-produce-before-drive-thru-event-even-starts/ar-BB14GLJd?ocid=hplocalnews.
- Coronavirus Food Assistance Program (CFAP). Washington (DC): US Department of Agriculture. [accessed 2020 May 28]. https://www.farmers.gov/cfap.
- USDA Farmers to Families Food Box. Washington (DC) US Department of Agriculture. [accessed 2020 May 28]. https://www.ams.usda.gov/selling-food-to-usda/farmers-to-families-food-box.
Moore S, Kantrovich AJ. The long-awaited coronavirus food assistance program (CFAP) for farmers. Clemson (SC): Clemson Cooperative Extension, Land-Grant Press by Clemson Extension; 2020. LGP 1063. http://lgpress.clemson.edu/publication/the-long-awaited-coronavirus-food-assistance-program-cfap-for-farmers/.