Phil Renaud, executive director of The Risk Institute in the Fisher College of Business at The Ohio State University, discusses how the persistent drought in the western U.S. is forcing food supply chains to rethink their sourcing strategies, as well as pursue longer-term initiatives for coping with the effects of climate change.
In times of constrained supply, consumers tend to engage in panic buying, which only serves to exacerbate the problem, Renaud says. Such behavior was exhibited in the early months of the COVID-19 pandemic, as well as the brief interruption in U.S. East Coast gasoline supplies due to the ransomware attack on the Colonial Pipeline. But that kind of approach can’t be applied to an interruption of food supplies because of the perishability of the product. So food suppliers must cast about for alternative sources of items previously grown in areas of the U.S. West that have been severely impacted by the drought. “It creates a whole different set of dynamics,” Renaud says, including the need to rethink just-in-time supply strategies based on minimizing inventories.
Expect to see even greater pressure on food supply chains as the economy reopens and restaurants resume operations. But actions must go beyond short-term shifts in sourcing, Renaud says. They have to account for the long-range impact of global warming caused by the reliance on fossil fuels. Previous droughts don’t offer the kind of solutions that are needed now for what is a persistent and worsening global problem, Renaud suggests. “We need as a global society to understand the impact of fossil fuels,” he says, noting the rapid improvement in the environment that occurred when the pandemic brought much of the nation’s traffic to an abrupt halt. “We can turn this around,” he says, “but we’ve got to take some immediate actions.”
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