The huddles this week focused on funding updates and emerging supply chain problems. In addition, participants shared a terrific list of resources that consultants and companies will find really valuable. We’ve included all of these at the end of this summary.
Talking Points
- SBA Loans | Side-by-Side Comparison
- PPP: $205 Billion of the $350 Billion Has Been Claimed. Approvals are coming in, but money hasn’t been dispersed yet.
- Traditional Lending Programs: 7a and Express Loans: Pathway may be a better path for businesses that are growing too quickly and are running out of cash
- Business and Industry (B&I) Guaranteed Loan Program | Fact Sheet
- Can also do PPP processing (Farm Credit is included)
- For ag processing (meat processing, cheese, etc.), not for production agriculture
- Farms are not eligible for the Economic Injury and Disaster Loan (EIDL) but are eligible for PPP but based on size-standards:Businesses listed under “Sector 11 – Agriculture, Forestry, Fishing and Hunting” are based on “Size standards in millions of dollars” and maxed at $1,000,000.
- See List of resources for farmers here
- USDA Rural Development COVID19 Resources
- USDA expanded upon the deferral flexibilities. Guaranteed lenders may also approve and make covered loans under the SBA PPP.
- Listen to FFI’s Podcast: Is Bankruptcy Best? How Food Businesses Can Decide
- Bankruptcy can be a tool to stay in business. Not necessarily the end.
- Prepare for bankruptcy: Watch FFI’s webinar and use our template tocomplete a 13-week rolling cash flow
- Labeling Rules Eased: FDA eases labeling rules to ensure consumer access to food during the COVID-19 pandemic – particularly targeted at restaurants, providing flexibility regarding nutrition labeling of certain packaged food. Read more here.
- Supply chain issues
- Processing Facilities: Workers getting sick
Trends
- Lost 5% of pork in US to close of Smithfield plant in South Dakota
- Not a stay at home issue, an issue with how processing facilities are set up. It could get worse if/when we open the economy back up.
- Risk associated going to one plant for slaughter, farmers should start diversifying their processing ASAP if at all possible.
- Small Grain Mills: Specialty mills are experiencing record orders and insufficient processing capacity. May not have wheat because they’re mostly specialty and organic grains. Not a shortage of conventional wheat.
- Retail Distributors: Are not getting non-essential products onto trucks so products are stuck in warehouses because distributors are prioritizing essential items with big clients. Additionally, dock workers and copackers are hard to find right now.
- Farms: Some are plowing crops under because they have lost their food service customers and it’s cheaper than harvesting with no buyer.
- Farm worker distancing is an issue because workers live close together, work close together, and a lot are undocumented – huge risk factor for farm workforce.
- Food Pantries: Huge lines and most are not set up to take fresh produce to help take in the excess produce farmers are tilling under. There’s a huge opportunity for a pragmatic social entrepreneurship initiative here. Livingston Food Resource Center is a model:
- Listen to this Edible-Alpha® Podcast: Transforming A Food Pantry Into an Engine for Rural Prosperity – Are there hubs that could do this? Can we coordinate to get them funding?
- Large Companies: Starting to feel the pain from not being able to source ingredients from overseas. Labor issues with unloading and loading shipping containers in other countries. Shipping containers are getting stuck on the wrong side of the ocean. (For ex.., Pork ships to Asia, backhaul is manufactured products. When we’re not importing manufacturing products, the containers get stuck in the wrong place).
- Some direct farms and brands with online sales are up 400%-500%
- Organic Valley is doing well and over there is a demand for organic milk
- Dumping of conventional milk is happening in more states than usual
- Dairy Farmers of Wisconsin ask if you run into any examples of milk rationing and/or empty cheese shelves to please contact them
Tips
- Focus on Innovative Business Development
- Strategic relationship building to get businesses to evolve. Direct to consumer is booming right now! How can we help companies, farmers and consumers connect with each other?
- Blockchain is being used by large companies to monitor world-wide supply chain availability, cash position, and to look at the big picture and avoid breakdowns. What does a simpler model of this look like?
- Could CSAs start earlier by selling other products or creating partnerships with farms in other states? We could be direct marketing vegs from other states to consumers right now….
Immediate Next Steps
- Listen to Podcasts
- Get that 13-week rolling cash flow forecast together by utilizing FFI’s templateand watching our webinar that walks you through how to use it
- Brainstorm and put business development ideas into action
- Look into resources shared by fellow Huddle members:
- Business Hibernation Toolkit: Help business owners do deeper thinking to look at new ideas.
- Wallace Center Briefing: Food & Farm Businesses Navigate the CARES Act
- Flower farmer sales booster inspiration
- Council of Development Finance Agencies: Comprehensive Recovery Strategy – COVID-19
- General tips for how to support restaurants, a resource from Vermont
- Free Webinar Thursday 4.16.20: To help small food brands understand what to expect and whether they should go on Amazon now with an Amazon expert who knows food brands
- Feeding America Program: a hunger relief organization with a nationwide network of food banks feeding the hungry. They partner with companies to raise awareness of hunger and provide financial support to help those in need. Learn more about their partners’ work & how your business could get involved.
- Farm Commons (farm law non-profit) Recorded Webinars:
- Feeding Families in the Time of COVID-19: Since 3.21.20 the Food Marketing Institute has conducted online surveys with grocery shoppers to assess the impact of COVID-19 on the perceptions and behaviors of grocery shoppers.
- FoodChain: Combines an online producer-to-purchaser marketplace with a reliable distribution system to connect local producers with restaurants, grocery stores, and institutional cafeterias. Provides farmers with direct relationships to wholesale purchasers by providing a platform for buyers to browse, compare, and purchase local products.
- Free Recorded Webinar: Rochester Farmers’ Market Pivots to Online Sales+ Drive-Thru Pick-Up in the COVID-19 Era. Market Manager Jessica Joyce and Farmers Market Hub specialist Sara George share how they put this pilot in place and what they have learned in a short couple of weeks.
- Free Recorded Crisis Copacking – BevNet Webinar: Jeff Grogg from JPG Consulting and Snackwerks, Pete Speranza from General Mills, and Liz Myslik from Fresca Foods discuss their unique perspectives on entrepreneurial food and beverage companies, the stresses and solutions affecting the relationship between brands, and their co-packers during the ongoing COVID-19 Crisis.
- Farmer Resource Links