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By Alice McFarlane

COVID-19 testing Canada’s food processing sector

May 4, 2020 | 2:49 PM

The latest update from Farm Credit Canada (FCC) shows Canada’s food processing outlook has become clouded by uncertainty.

FCC Chief Agricultural Economist J.P. Gervais said prior to the pandemic Canada’s food processing sector had been performing well.

There have been several changes in food consumption patterns with consumers stocking up or pantry loading at the beginning of the pandemic.

Production disruptions have impacted the food supply chain with some food processors having to shut down operations as their workforce dealt with COVID-19.

Markets that buy food from Canada may find it difficult to deliver food to their consumers’ purchase points. Foreign demand may also be weaker overall because lower income in emerging markets lowers food consumption.

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Gervais said permanent transformations in the supply chain are resulting in significant changes.

“With this crisis what really clouds the outlook is the shift in consumption,” he said. “Not knowing when food services are going to resume normal operations, and post crisis is probably going to be different than pre-crisis, there is a lot of unknowns.”

As demand shifts, food processors are not supplying the food service businesses the same way they are going to supply retailers.

Gervais said specifications will be different which makes it more difficult to anticipate demand going forward.

“When we get out of the crisis, even if we resume some sort of normalcy when it comes to operations in the food service, are we going to see some consumer behavior change?” he said. “We’re seeing some of the changes now, more online purchasing, more cooking at home, more trying to find local products and so forth.”

Gervais said this could have some lasting implications for food processors. He said the cloudy outlook makes it difficult for processors to anticipate what the future looks like.

“We rely on a supply chain that’s really just in time in terms of delivery, but you need to still plan ahead and that is part of the normal operations of food processors,” he said.

Gervais said the adjustments can’t happen quickly and Canada’s food supply is showing resilience and adaptability, but he expects a shift in the mix of available food products as supply chains are redesigned to account for the COVID-19 challenges.

Gervais said we should be grateful to all the people working across the food supply chain, from farmers, to input suppliers, processors, transportation, distributors, and retailers.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF