Eight million pounds of cabbage that we've destroyed.

We have to grind it up back into the ground.

It's the only choice we have, and hope for a better day.

Paul Allen isn't alone.

Farmers across the country are destroying millions of pounds of fresh

produce as the coronavirus has majorly disrupted the food supply chain.

Initially, consumers hoarded items like rice, beans and frozen foods.

The panic buying resulted in empty aisles and some wondered if the U.S.

was in danger of a food shortage.

That's far from the reality though, especially when it comes to produce.

The United States had a food surplus before the crisis, and we still do.

According to the U.S. Department of Agriculture, 30 to 40 percent of

post-harvest food is wasted annually.

And the coronavirus is making the situation worse.

So, it was in the middle of March when they shut down all of the

restaurants, you know, and then all the theme parks shut down, cruise

lines shut down. In a matter of days, m any farms lost the majority, if

not their entire market channel.

Before the crisis, o ver half of American's food dollars were spent outside

the home, at restaurants and other food service locations.

The coronavirus immediately changed that, but the farmers had already

planted their crops.

So now they're destroying them, plowing cabbage, lettuce and other fresh

produce intended for restaurants and schools, straight back into the

ground. Yeah, I'd say 25 percent of the crop that's grown in our industry

is probably not being able to make it to either retail or food service.

Probably the most trying time that we've probably ever had since the Great

Depression here in the Salinas Valley and farming.

While restaurants and schools are closed, this doesn't mean that we're

eating any less. We're just getting more of our food from grocery stores.

So why are farmers still destroying their crops?

The supply and demand in an overall sense is exactly the same.

The challenge is how we're getting that food, where we're getting that

food and in some cases, what types of food we're getting.

Basically, farmers are up against an inflexible food supply chain, which is

specialized for the end customer.

Longstanding contracts between farmers, restaurants, schools and grocery

stores determine how the crops will be packaged and processed.

So it's just not easy to divert all the produce intended for restaurants

to grocery stores instead.

You're really designing your farm to fit whatever specific sales outlet you

have. The system just isn't set up to be that nimble.

A quarter of all food consumed and over half of all food dollars go to the

food service sector.

So many operations are designed specifically with restaurants in mind.

Most of the volume sizes per unit are larger.

Where you might get a 12 ounce bag of veggies in a supermarket, most of

the food service stuff is like 10 pound bags.

So it's not easy to switch to those factories, the packaging in those

factories, from restaurant or commercial to consumer.

Rodney Braga, President and CEO of B raga Fresh Family Farms in

California's Salinas Valley, has been able to send a greater share of his

produce to grocery stores.

But he says the distribution centers are facing a bottleneck and just

can't handle more food right now.

They're not set up to run at 200 percent , they're set up to run

efficiently at 100 percent.

S o they're maxed out now at 130, 140 percent of normal.

So they're at that crunch point.

And when it comes to perishables like the lettuce grown at Br aga Fresh,

it's not possible to store it until distribution centers have capacity or

until the economy opens back up.

It's either harvested and sold and consumed or it's done away with because

the shelf life is, you know, two weeks max.

All this means that tens of millions of pounds of fresh produce are either

rotting in fields or being destroyed, even as food banks are facing a 70

percent average increase in demand, as the crisis has left millions of

Americans newly unemployed.

In September 2019, the U.S.

Department of Agriculture estimated that 37 million people were facing

food insecurity in the United States.

The national food bank network, Feeding America, estimates that figure

will increase by 17.1 million because of the crisis.

A lot of us have chose to spend more money for harvest cost just to send

food to food banks, and we've done a lot of that.

But spending money to harvest, process and transport crops for donation

puts a further strain on farms that are already struggling financially.

Lots of Allen's paying customers have already gone away since many of his

crops are sold primarily to restaurants.

Our cabbage is like 65, 70 percent.

Green beans are probably 60 percent food service.

We have to grind it up back into the ground.

I have a friend that had to destroy 10 million pounds of tomatoes.

Another friend that has destroyed 55 million pounds of leafy vegetables

and produce. Farmers aren't the only ones taking a hit.

Five percent of the country's milk supply is currently being dumped, and

hundreds of thousands of eggs are being smashed daily , s dairy farmers

and poultry farmers deal with similar supply chain challenges.

While we won't have a complete picture of the financial impact until the

crisis subsides, Allen says that his revenues dropped substantially since

mid-March, amounting to hundreds of thousands of dollars in losses every

day. Well for cabbage, my revenue's down 60 percent.

For beans, for a month time I mean, it was down 50 percent.

Oftentimes you're talking about 250, 300 thousand dollars per day because

the volume is so large.

Even farmers who grow primarily for grocery outlets are being hit hard as

they've seen wholesale prices for produce fall.

The price impacts that we're starting to see are ten to twenty five percent

lower than what they had been suggesting a couple of months ago.

Braga Ranch sells primarily to large grocery chains, and while demand is

up, Braga says it's just not enough to overcome the glut in products like

iceberg and romaine lettuce.

To have demand be up 30, 40, 50 percent, t hat usually would mean that the

price is very good and very high.

But there's so much crop, and some of it being disked under, that you've

got prices down basically at breakeven.

Even if the supply chain bottlenecks were solved, t he demand for certain

items might never keep up with supply, until the restaurant business has

fully recovered. The crisis has revealed that Americans just consume more

vegetables at restaurants than they do at home.

Who all goes to a supermarket and buys a head of cabbage anymore?

It's just not happening. And who makes coleslaw at home anymore?

They just really don't. But so long as farmers assume that the food

service industry will open up over the next few months, it just doesn't

make sense for them to completely alter their growing patterns or seek out

new markets, e ven as the sector faces substantial losses.

We were estimating for the 2020 year, there would be about a 20 billion

dollar loss out of about 100 billion dollars in net farm income.

Unfortunately, the situation has gotten worse since we've done those

estimates. So 20 billion looks like a fairly optimistic scenario.

Instead, many are hoping that government interventions and aid packages

will help to carry them through this rough patch.

In mid-April, the White House announced their long-awaited 19 billion

dollar farm relief package, which sets aside 16 billion in direct payments

to farmers and ranchers and three billion in government purchases of

dairy, meat and produce intended for distribution to food banks.

Absolutely, no question, it's all going to help.

But there's no way it's going to take each individual business back to

where they would have been in 2020 absent all of this.

Farmers welcome the relief, though many are upset that the program caps

payments at 125 thousand dollars per product and 250 thousand dollars

total per farmer.

A lot of farmers, particularly farmers who grow vegetables and fruits, they

are going to lose significantly more than a quarter million dollars in

this year's pandemic.

We need to make farmers whole and not have an arbitrary dollar cut off.

Allen says because some crops cost much more to grow, it's unfair that all

farmers have the same ceiling.

He claims the 125 thousand dollars per product cap is less than what one

day's harvest could bring in.

Cabbage will be probably 10 times the amount to grow and harvest as what a

soybean crop is, no doubt.

And what's happened is the USDA has really made this one size fits all.

But what is fair is not always equal.

But as farmers push for more money, at least some of this initial aid

package will help redirect the enormous amount of food waste to food

banks. For the next six months, the U.S.

Department of Agriculture plans to spend approximately 100 million dollars

per month purchasing excess produce and 100 million on dairy and meat.

These items will be combined into variety boxes to be distributed at food

banks and other community organizations.

This will be a boon to the millions of Americans facing food insecurity as

a result of the pandemic, but farmers say the government purchases won't

come close to solving their food waste woes.

Even if we could harvest everything that t he food banks could take, it

still wouldn't be one tenth of what the food service sector is in our

country. Analysts, academics and farmers themselves have all gotten used

to admitting that they just don't know what to expect over these next few

months, as it's become clear that the return to normal will be a slow,

halting process.

In my opinion, we're in a bad spot for at least two years.

We're not done with this until you and I have a vaccine that has been

distributed everywhere and works.

And by that point, we're going to have debts that are measured with with

the letter T instead of the letter B.

And even as many states begin to open back up, the dining experience will

likely be altered for the foreseeable future, as restaurants operate at a

lower capacity in order to comply with social distancing recommendations.

So if they're going to only seat half as many people, well right there

you've got half the demand in the restaurants even when they're open.

In any case, many say that providing farmers with the support they need to

weather this crisis is paramount to the future of the agricultural

industry and our nation's food security as a whole.

If a lot of farms go out of business, we're going to lose the land base.

We're going to lose the know-how, and that will have an impact with our

next crisis.

We need to keep farmers in business and on the land.