In so many businesses, COVID-19 has caused a fundamental change in the way sales are done. Of course, the dairy industry and greater food distribution sector have been no exception as we have written about in detail over the past year.

During the April 21 Hoard’s Dairyman DairyLivestream, Agri-Mark’s Bryan Weller described the past year in an all too familiar way.

“I joked with my colleagues that we are living in COVID-19 years right now. I think of a COVID-19 year as a dog year,” he explained. “The initial COVID-19 shutdown almost feels like something that happened seven years ago because it’s definitely been a period of time where it’s just been problem whack-a-mole.”

While the initial problems included a near-complete shift from restaurant-oriented production to retail-directed lines, along the way there have been a number of other stressors.

“The problems, issues, or opportunities – whatever euphemism you want to use – have not stopped. Currently, we’re probably under as much if not more stress than we were at the beginning of the pandemic in terms of labor shortages and restrictions,” he shared. “In terms of my group, we’re responsible for all materials and ingredients for our manufacturing operations. At one point a couple of weeks ago when meeting with my managers, I challenged them to tell me what items we weren’t tight on.” That was nearly impossible, the co-op procurement manager said.

Distribution headaches
Wisconsin Cheese Maker’s Association Executive Director John Umhoefer described a few more of the challenges his organization’s members have faced as the pandemic and businesses have evolved.

“Last April when this was just gearing up, I wrote in the cheese papers that this was the biggest business disruption of your career or you’ve had a really bad career,” he began.

Those disruptions still include chaos in the distributor market that has made it incredibly difficult for cheese plants to anticipate market needs from their customers.

“They went from saying, ‘Let’s have a year-long contract or a six-month contract together and I’ll tell you how much we need for that whole time’ to ‘We need to move to monthly contracts,’” he described.

At times, Umhoefer described these contracts as moving to biweekly or weekly even at times. The shorter time frames have worn on manufacturers as small changes now have great ramifications.

“There’s still a tighter pipeline between the milk coming in and that order going out. It’s created a situation where any disruption in the marketplace gets magnified. The slightest hiccup at a good-sized cheese plant these days can cause a ripple across the entire milk shed, and we’ve seen that a couple of times in the Upper Midwest,” he explained.

While COVID-19 vaccinations and lower caseloads have some parts of America returning to a semblance of normal, supply chains and manufacturers remain on pins and needles.

An ongoing series of events
The next broadcast of DairyLivestream will be on Wednesday, May 5 at 11 a.m. CDT. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here. Registering once registers you for all future events.

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(c) Hoard's Dairyman Intel 2021
April 29, 2021
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