Pandemic intensified need for agriculture innovation, USDA secretary says

A growing world population and the need to do more with less were already driving innovation in agriculture. But the coronavirus pandemic added to the urgency.

It has exposed the fragility of the nation’s food supply chain, cut into trade forecasts and illustrated the limitations of how America’s producers have always done things. Data-driven decision-making and environmental sustainability will need to be the way forward, Agriculture Secretary Sonny Perdue said.

Speaking during a webinar Thursday hosted by SVG Ventures THRIVE, an investment accelerator for ag tech and food startups, Perdue described a sophisticated and synchronized network.

“We’ve seen the potential threat that really couldn’t be contemplated any way. I would submit that the efficiency of our food supply chain led to this dual track of producers and processors and packagers, and even logistics, serving two different markets: the institutional food service market whether it’s restaurants, hotels, conventions or schools and colleges, and the other – another dual track that efficiently served the grocery store market,” Perdue said. “So when we saw the one supply chain from a demand perspective close almost overnight, that created some serious misalignment of supply and demand that we had to be extremely nimble in trying to realign to direct, so that that production would not go to waste.”

He also said it created significant challenges in the meat processing supply chain, both in terms of productivity levels and for workers’ safety. Currently, he said, the industry is back up to about 90%-95% production.

Perdue insisted U.S. wasn’t hoarding production and that the country’s exports didn’t suffer “much” due to the pandemic. The latest outlook for U.S. agricultural trade, released May 29, projected US agricultural exports in fiscal 2020 would be $136.5 billion, down $3 billion from the February forecast, primarily due to reductions in bulk commodities including soybeans, cotton, corn, and wheat. But livestock, poultry and dairy exports were unchanged, “as stronger demand for pork and dairy products offsets a decline for beef and poultry products,” the report said.

In particular, U.S. pork export forecasts increased by $200 million to $6.9 billion with strong demand from China.

The president invoked the Defense Production Act on April 28 to keep meat processing plants open as essential businesses, after reports of workers falling sick with the coronavirus led to plants to close.

To move forward, Perdue said the Agriculture Department would need to become an investor for the research of private sector ideas.

Push for data-driven, sustainable innovation

In February, USDA announced its Agriculture Innovation Agenda, which describes itself as “a department-wide initiative to align resources, programs, and research to position American agriculture to better meet future global demands.”

“We understand that most of these ideas, frankly, are going to come from the private sector. And we’re blessed globally to have some great thinkers and innovators,” Perdue said. “We want to be conveners. USDA puts a lot of money into research – basic research, applied research – but much of that work in the finishing product certainly comes from the private sector.”

He told SVG Ventures CEO John Hartnett during the webinar, many ag tech start-ups are not “tainted” by long-held ideas and practices that could hinder innovation. Innovation Agenda has a goal to increase production by 40% and cut US agriculture’s environmental footprint in half by 2050.

Perdue talked about the need for good data to drive decisions, such as with meat production numbers. He said it took agility, moving quickly and good data to get back to about 90%-95% year-over-year meat harvesting rates once COVID-19 hit supply chains.

“I asked our data team, ‘Are we driving off a cliff? Are we getting better or worse?’” Perdue said. “I think the big lesson we learned, John, is nothing beats good, accurate data. Because that’s the best way to drive policy decisions, that’s the best way to drive productivity is good data. None of us are smart enough to intuitively know what could happen.”

USDA wants to use a scoreboard to hold itself accountable to its innovation goals quarter by quarter. The benchmarks will be in areas such as forest management, food waste and loss, carbon sequestration and renewable energy.

Perdue said he also expects future crises to occur, which means agencies need to be agile and dynamic in their policies in order to respond.

“We’re a regulatory agency, as you know. And right away when schools were closed we had to give waivers for many of those regulations that didn’t make sense in the light of this pandemic – where kids were out of school – how will those nutrition meals going to be delivered to them, and those kinds of things,” Perdue said. “So we worked 24/7, and our teams, even in a remote working environment were very helpful in working with our state partners to get waivers out there and upping the output for people having access to food in that regard.”

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