Supply Chains Study

Future climate changes and Florida tomato/strawberry production

This study also attempts to analyze the impacts of climate variability and changes on agricultural productivity of tomato and strawberry farms across Florida. We analyzed the trends of the historical climatic variables (minimum and maximum temperature, and rainfall) based on long-term historical data obtained from the meteorological stations during the growing seasons across Florida. Furthermore, we evaluated the performance of nine precipitation-based and twelve temperature-based climatic indices derived from various Regional Climate Model simulations. Our next step is to develop crop growth model and assess how future temperature change will affect tomato and strawberry productions and seasonal distribution. Based on our preliminary findings, we note:

• The trend analysis of the historical time series of temperature and rainfall data shows an increasing trend and frequency of occurrence of extreme events. However, the trend of temperature is relatively significant as compared to rainfall.
• The timing of the hotter-than-normal weather could have an effect on the overall incomes of strawberry and tomato growers. The early onset of the hot temperature delays flowering and fruit production that eventually pushes the harvesting time. Whereas, the late onset of the warmer temperatures will have the opposite impact of a rapid growth and production surge. Untimely and/or oversupply of these agricultural products could have their own negative impacts on the income of the farmers.

Changing tomato and strawberry supply chains

This study attempts to understand the emerging changes in the structure of tomato and strawberry markets throughout their supply chains. We plan to identify adaptive market strategies (in response to climate change, environmental regulations, and trade pressure), associated risks, and general sustainability practices. With this information, we hope to offer scalable solutions that can transform industry standards and achieve a more resilient supply chain.

This study will use different modeling tools such as SAS and Witness, and analytical techniques such as discrete event and Monte Carlo stimulation based on primary and secondary source of information.

Based on the preliminary study, we find that

• While the conventional produce supply chain consists of production, wholesaling and retailing phases, the current trend is that the retailers are receiving majority of the produce from the farmers directly. Additionally, the majority of the farmers in strawberry and tomato industry make contracts with the restaurants and big chain of grocery stores without going through a brokerage or wholesale firm.
• The tomato and strawberry supply chains do involve several critical points. Some of the critical points involve quality assurance checks and others simply storing the produce. Such points do increase wastes and the lead-time in case of repacking, and affect the profit margins of the market actors. Storage check points usually increase the cost of the produce, yet decrease the lead-time and gives market wholesalers and retailers higher ability to respond to time-sensitive market demand. The supply chain of strawberries is less complex because of a better established cold chain.
• The logistics of imports are shifting from Arizona and California to Laredo and McAllen in Texas, a change that has reduced the lead-time by one or two days for Florida, the Midwest and the East Coast markets of the US. The reduction in lead time will provide the exporters of Mexico a competitive advantage by reducing transportation cost, improving the quality and shelf life of the shipped produce over the existing system. This increasing comparative advantage will put further cost pressure on Florida growers.
• Transportation and labor issues remain a major limiting factor throughout the supply chain.
• Farmers feel that there is a greater need for improvement in technology in the areas of market data dissemination, cold chain, and transportation.
• Costs of financing protective agriculture production, cold storage, and other technological innovation are prohibitive for small and medium growers and shippers.
• There is a constant information gap between growers, wholesalers, retailers, hotel owners and alike with regard to domestic as well as overseas markets.

Quality and fair food certifications

A myriad of certification schemes exists in the market in order to promote ecologically and ethically responsible fresh produce production. The key question we try to address is how widely these schemes have been accepted by farmers, wholesalers, retailers and/or consumers. Are they easy to adapt and are they expensive? Would having a single comprehensive certification system be better than having multiple schemes implemented by various agencies?

Main findings of our research so far:

• Florida growers currently participate in different types of produce certification schemes. Most of the tomato growers (90%) in Florida are participating in the Fair Food Standard Council (FFSC) certification, a program developed with the support of the Coalition of Immokalee Workers Association, and it is free of cost. Only about 20% of the Florida tomato buyers are participating in this program and taking part in the pound-a-penny program. Equitable Food Initiative is another fair labor and food safety certification program that is followed nationwide.
• Some of the Florida farmers grow US Department of Agriculture (USDA) certified organic tomato and strawberry. The mandatory waiting period of transition from conventional to certified organic production is three years. The cost of certification is $750 for the first time applicant, and the renewal cost is $350 to $575 each year. This certification helps the buyers to receive premium price on the produce.
• The Florida Department of Agriculture and Consumer Services runs the Fresh from Florida certification program. The cost for using the logo is $50. This certification was created to promote domestic produce.
• Food Safety Modernization Act (FSMA) requires food safety standards for fresh produce production through retailing. The certification could cost just over $830 at farm production level and over $290 for the crop harvesting crew (from personal communication).
• IMPAC is a sustainability certification which runs on the membership basis. Its goal is to virtualize the sustainability audits and to develop the trust between growers and consumers.
• Numerous audits are major drawbacks of the existing certification system and no farmers would be able to participate in all individual programs to take ensure both environmental and fair labor standards. Furthermore, the implementation of certain program like the organic certification is difficult because of the warm Florida weather and high incidence of pests and diseases.
• Consumers are not fully aware of available certification schemes.
• Finally, currently there exists no comprehensive certification system that covers all aspects of sustainability, i.e., ecological, economic and social.