Jul 8, 2020

Produce growers fill up food box program

Amid marketplace chaos wrought by the new coronavirus, produce growers, packers and shippers are evolving their operations to work for Uncle Sam.

The USDA’s Agricultural Marketing Service this spring rolled out $1.2 billion of contracts for its Farmers to Families Food Box Program, which allows approved contractors to distribute surplus food to food banks and other non-profit organizations. The initial contracts included $461 million for fruit and vegetables. Some of those contracts have since been extended and an additional round of contracts is planned.

“Through this innovative program, small and regional distributors are bringing back their workforce to procure food directly from our American farmers and ranchers, the president’s daughter and advisor, Ivanka Trump, said in a news release. “Fresh food is getting to those in need, even in the hardest to reach places, through partnerships with food banks, non-profits and faith-based communities.”

Welcome business

The farm box contracts came even as the industry reeled from a disruption in the foodservice space.

Gene McAvoy, a retired University of Florida Extension professor, said the state’s produce growers enjoyed a great fall and winter growing season before COVID-19 shut down restaurants, Disneyworld and the cruise lines that they usually supply. South Florida tourists “eat out every morning, every evening, every noon,” he said in early June.

Millions of pounds of vegetables were destroyed or plowed under by growers managing their inventory, he said.

Others got creative. McAvoy said he knew of one South Florida grower who began trading crops with other growers to sell mixed produce boxes.

“He was doing his own (boxes) in the local market,” before receiving a $1.5 million contract to ready for the food boxes program, McAvoy said.

California companies were awarded approximately $115.9 million in the first round of funding.

In Michigan, produce growers who received contracts included growers such as Comstock Park’s Heeren LLC, which received a contract worth more than $28 million, and LaGrasso Bros., which received a contract worth nearly $4.5 million.

Tom Lagrasso III, who is president of the Detroit-based shipper said in a press release the program had been “perfectly timed.”

“The USDA Farm to Family Food Box Program is critically important to helping great American farmers, distribution companies, such as LaGrasso Bros., and the families that are economically impacted by the COVID pandemic,” he said.

In the Pacific Northwest, Portland’s Pacific Coast Fruit Co. was awarded a contract worth about $24.8 million for the production of 810,000 produce and dairy boxes, beginning May 18 through June 30, reaching 135,000 people every week.

“Something my dad, co-founder Emil Nemarnik, always said was, ‘Take good care of your employees, farmers, shippers and customers,’” said Nancy Nemarnik Brugato, vice president of development at Pacific Coast. “By being awarded this generous USDA grant, we are able to help our food industry and community during a time when they need it most.”

Evolving operations

Packers supplying the distributors navigated some of the idiosyncrasies of the new program.

2020 Young Apple Leader Angela Sommers of Michigan Fresh Marketing and BelleHarvest spoke to the U.S. Apple Association about the requirements, including rigorous food safety precautions. Not only did the work include hand-washing and as much social distancing as is possible in a packing facility, the staff completed daily, digital surveys about whether they were experiencing any symptoms or had come in contact with anyone who has the COVID-19 virus.

Michigan Fresh Marketing and BelleHarvest – who have a sales alliance – also were successful in stopping the spread of the virus among employees.

“We’ve had employees test positive,” Sommers told USApple. “We chose to have everyone tested to prevent a spread and keep employees safe. The individuals that were positive stayed home and were tested again before returning to work.”

The business from the food boxes has revitalized the group’s packing operation, which typically slows down in spring or early summer. Sommers told USApple the group was able to hire 100 additional employees in addition to keeping several others. There was plenty of work to go around.

“We had to be able to change our business model overnight to pack these boxes. Apples are just one part of it,” Sommers said. “We’ve set up a whole new assembly line and are now doing twelve truckloads a day to serve families in Michigan, Indiana and parts of Illinois.”

What comes next

Although the initial distribution totaled $1.2 billion, the White House authorized spending up to $3 billion. USDA planned to expand food box contracts with “option periods” based on performance. Suppliers also had the chance to add their additional recipients of the food boxes in their area, provided they maintained 501(c)(3) tax exempt status.

USDA announced June 23 that the program had distributed more than 20 million food boxes in support of American farmers and families.

“With continued support we expect up to 40 million boxes will be delivered throughout the country by June 30,” U.S. Secretary of Agriculture Sonny Perdue said in a released statement.

The program remained an active topic of discussion in the industry through mid-June, when Mollie Van Lieu, senior director of nutrition policy, United Fresh Produce Association, led a discussion at United Fresh LIVE! about the food boxes.

Van Lieu said a second delivery period starts July 1, but USDA is already working with bidders who applied for funding in the first round and were rejected on a technicality of some kind, and those who serve an area not currently served by the program.

“In addition to that, there will be an additional round of a RFP (request for proposals),” she said. “We don’t have an exact timing for that.”

— Stephen Kloosterman, associate editor