A new self-check preparedness resource was created to help fresh produce growers, shippers, packers and handlers evaluate their organization’s preparedness in mitigating the spread of and preventing COVID-19 in their facilities and workforces.
Unsurprisingly, more than 85% of poll participants stated their business created or updated their initial COVID-19 prevention and worker protection checklist within the last month.
Participants shared changes that their organizations planned and enacted early in an effort to keep everyone safe and healthy:
Many organizational leaders exhibited the behaviors they wanted from their employees and demonstrated the need for urgency through education and communication.
Challenges in Safety
When it comes to H2A housing for workers, it is difficult to social distance in dormitory type housing. Additionally, many workers are bused in from housing, or carpool to save money. These transportation challenges have caused issues as well, and many companies have either used more buses, or put fewer people on a bus at a time to transport them.
While many worker safety challenges stem from social distancing practices, one participant has noted an even more concerning challenge that will become more of a challenge as the summer months approach: All organizations have been requiring field workers to use face masks when harvesting, whether in the field, tunnel or shade house/greenhouse.
When harvesting in particularly hot weather, workers have found it increasingly difficult to breathe and function normally with the masks on. Depending on the environment and the product that workers are harvesting, organizations have had to provide some flexibility to workers.
In cases of harvesting in open environments, particularly where social distancing is naturally practiced, such as harvesting from bushes that create natural barriers between people, workers have been able to lower their masks below their noses to aid in breathing and functionality. Before workers leave the field they must raise their face masks back above their noses, and partake in extra sanitization.
Look to the Future
Most participants stated their organizations are moving forward with normal planting and planning procedures. There has been some drop in demand for crops used in foodservice (such as cherry tomatoes), but demand overall has been consistent with what was expected. In terms of testing, as more regular COVID-19 testing becomes available, many companies will likely enact new measures:
Communication and guidelines from regulatory agencies have been helpful, participants said. One participant went so far as to say surprise visits from a regulatory agency has helped their organization through verifying their protection practices.
Here are additional resources PMA members have found helpful:
This week’s global/grower-shipper/supply chain conversation followed the Virtual Town Hall general session’s theme of the economics of recovery. PMA Vice President, Insights & Analytics, Gina Jones provided a summary of industry reports on research and findings regarding consumer insights.
Following the update, a panel of industry experts from Limoneira, Coastline Family Farms and Fresh Insights joined PMA Vice President, Supply Chain and Sustainability, Ed Treacy in a Q&A session, paired with audience polls, on how different sectors of the global supply chain are reading and using consumer sentiment data to understand trends and plan for a future that will look very different. Here are the key themes that were discussed.
PMA research partner Nielsen broke down consumer shopping during COVID-19 into six phases: protective health minded buying, reactive health management, pantry preparation, quarantined living preparation, restricted living and living a new normal. PMA’s Jones said consumers are transitioning from phase five into phase six.
Phase six is broken down into three possible scenarios: rebound, reboot and reinvent. If we have a recovery in the next three months, consumers will be in the rebound phase, where the focus is largely on health concerns, financial constraint, support for the community and appreciation for the essentials.
Consumer focus for the next few months will largely drive their consumption and shopping habits. Due to the focus on health concerns, many consumers will shop for nutritional and immunity-boosting foods, such as fresh produce. This shift toward health concerns has also seen a trend toward more packaging. A participant poll during the roundtable found that 91% of respondents feel a preference for packaged produce will continue past the pandemic.
Most participants agreed a continued preference for packaged produce is in the future for safety and branding reasons. They also argued that while there is more packaging is being used during the pandemic, sustainability is a trend that is ingrained in consumers’ minds at this point, and there will be more sustainable packaging options coming in the future. One participant pointed out that because of this sustainability mindset, particularly in Europe, consumers want to see packaging used for a purpose and not used pointlessly.
With massive shifts in the economy and businesses taking hits, financial constraint will be a large focus for consumers coming out of COVID-19. Nielsen predicts that consumers will be risk averse for the next year, leaning more into “tried and true” brands that they trust, or discount brands that are a lower financial risk to purchase. As a result, middle-of-the-road brands may have a tough year in merchandising.
One shift retailers had to make during COVID-19 was to limit SKUs. This was largely done as a way to adjust to the lack of transportation and other supply chain challenges. When looking to keep financial constraints in mind in the future, one participant predicted consumers will crave the diversification of product that re-expanding SKUs would bring. While dropping SKUs helped with ease of business during COVID-19, more than half of poll participants agreed that retailers will likely offer an expanded selection of SKUs again.
Nielsen predicts the aftershocks of COVID-19 will have consumers shifting to purchase more locally produced items, and participants of the roundtable agreed that local purchasing is here to stay. Participants mentioned that not only is local purchasing here to stay as a consumer trend, but many businesses also shifted to make relationships and partnerships with local growers during COVID-19, and these partnerships will not be quick to disappear.
Another consumer trend here to stay is online shopping. Nielsen states that according to Supermarket News, e-commerce accounted for roughly 2.6% of U.S. food and beverage retail sales in 2019, but the projected growth in online grocery activity would raise that sales percentage to 3.5%, or nearly $38 billion during COVID-19. The online shopping trend was on the rise before COVID-19, and the pandemic simply escalated the trend more quickly than was anticipated. This trend will continue to expand and express itself differently, creating opportunities for retailers and growers alike.
Poll respondents seemed to agree with Nielsen’s prediction that a consumer appreciation for the essentials is coming when more than half of respondents stated that they predict a downturn in organic sales. Panel participants were not as quick to dismiss the sector. As one panelist pointed out, the organics sector has a very strong and loyal following that will likely continue their purchases. Historically the sector has flexed due to factors such as supply chain and economic issues. While the demand for organics may initially dip now due to purchasing power, participants seemed confident that it will bounce back. One participant noted organics is likely to come back as a strong branding strategy, both due to its affordable luxury appeal and the story it allows the brand to tell.
This is part of a series of weekly PMA virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual town hall and virtual roundtable will be held next Wednesday, May 20.
The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) will host a webinar on Thursday, May 14, 2020, at 1 p.m. ET, for producers interested in applying for direct payments authorized through the Coronavirus Food Assistance Program (CFAP). USDA is hosting this webinar to share what information is needed to apply for direct payments through CFAP, once the application period begins. The webinar is an opportunity for producers to learn about the general application process and required documentation prior to the official beginning of signup. Producers who are new to participating in FSA programs are especially encouraged to join the webinar. Register here.
Members of the fresh produce and floral supply chain connected in virtual roundtables on May 6 to discuss the economics of recovery as organizations prepare to return to business during the ongoing COVID-19 pandemic.
This week’s global/grower-shipper/supply chain conversation followed the Virtual Town Hall general session’s theme of the economics of recovery. A panel of industry experts from Promar, The Oppenheimer Group (OPPY) and RaboResearch Food & Agribusiness joined PMA Regional Vice President, Membership (Asia, Africa, Europe, Australia and New Zealand), Anouk Sijmonsma in a Q&A session, paired with audience polls, on how different sectors of the global supply chain are preparing to return to business and planning for a future that will look very different. Here are the key themes that were discussed.
There is perhaps more uncertainty now than ever, as nations and states discuss re-opening and businesses look to seize new opportunities and invest in the future. In response to a poll that was posed to attendees, about 50% of respondents stated that they are looking for guidance on when to reinvest in operations and minimize the risk of losses. One panelist stated that it is less about an exact point in time, and more about following the right due diligence process and looking for significant indicators. When looking for indicators, political and economic stability is key. Maintaining close relationships with customers and banks is especially important, as they are going to give you the best idea of where your demand, and therefore your cash-flow, is coming from.
More than 50% of participants stated they do not know where to look for information on how to estimate demand for products. The agricultural industry is, historically, in a very good position as an industry that is highly regulated and documented. While there are many powerful sources of information that trace demand for our products, it is also important to note and understand that current and historical data are of limited help in creating a forecast to help decide what to plant. With that said, it is also important to highlight many of the good sources of information that can be used right now. Regulation agencies in various countries, such as the FAO in Rome or the USDA in the United States are a prime example of this.
There are also many trade databases and research organization that track consumer and trade data. PMA has been diligently collecting and posting information from these sources, as well as our own consumer sentiment and trade data for members. This information can all be found on PMA’s COVID-19 resources page. One panelist posited that there is almost no excuse for not understanding the data. Understanding the data is an investment, just as long-term market planning is. While economies will take a downturn, they will recover. It is not a question of if, but rather when.
The COVID-19 outbreak has forced some companies to embrace innovation to survive. An overwhelming 64% of participants responded to a poll question stating they are developing contingent plans with steps to reboot their business. A large part of creating contingency plans comes from understanding investment opportunities, emerging markets, and consumer and trade data. There are pockets of value caused by COVID-19 that businesses and entrepreneurs can look for when creating their plans to reboot their organizations.
When asked about what has changed the most and where the opportunity for innovation is in the wake of COVID-19, participants agreed that the digitization of the retail and foodservice sectors of the industry has some of the greatest potential for long-term innovation. Retail organizations have seen more than 20 million households order groceries online for the first time during COVID-19, and there is a huge opportunity to convert these new customers into long-term consumers. One panelist emphasized this point by explaining that the work from home trend is likely here to stay for many organizations, shifting many households away from eating out for a quick breakfast or lunch to eating multiple meals at home.
Another panelist pointed out opportunities for retailers based on a spike in consumer demand. With more produce being purchased more frequently, retailers have the power to seek alternative channels to source their produce. This is a prime opportunity for retailers and growers to introduce second grade produce into the retail market. While second grade produce is equally as nutritious as first grade, it is often sent to processing plants due to strict aesthetic requirements. In a new age of high demand, customers may not care as much about the look of their produce. Consumers are also focusing more on the safety of their produce, and how much it is exposed to certain elements. This provides an opportunity for the packaging sector to look to new, or different, types of packaging, such as top sealed packages.
The response to innovation has not been as ubiquitous in the foodservice industry. While many quick service, and even fast casual restaurants, have seen massive success with delivery and online ordering, most fine-dining restaurants have opted out of the trend, stating that it does not coincide with their premise. As a result, fine dining as a sector has seen an 80% decrease in sales, while quick service has only seen a 40% decline in sales. With a 70% year-over-year increase in delivery sales overall, now is the time to innovate processes, research investment opportunities, and adapt to consumer demand.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual town hall and virtual roundtable focused on consumer demand and will be held next Wednesday, May 13.
The USDA and the Small Business Administration held a briefing call on access to the EIDL program for agriculture. See notes from that briefing.
The U.S. Secretary of Agriculture announced details of $470 million in Section 32 food purchases to occur in the third quarter of the federal governments fiscal year 2020 (July – September 2020), in addition to the ‘Farmers to Families’ food-box distribution purchases previously announced. The program will enable USDA to purchase surplus food for distribution to communities nationwide.
Members of the fresh produce and floral supply chain connected in virtual roundtables on April 29 to discuss the most pressing labor challenges and issues impacting them as a result of the COVID-19 pandemic.
This week’s global/grower-shipper/supply chain conversation followed the Virtual Town Hall General Session’s theme of workforce and talent management. A panel of industry experts from CoCanMex, West Side Produce and Washington State Tree Fruit Association joined PMA Global Regional Vice President, Central & South America/Mexico Nancy Tucker in a Q&A session, paired with audience polls, on how different sectors of the global supply chain are handling workforce and labor challenges to keep the fresh food supply chain open and to keep workers and consumers safe. Here are the key themes that were discussed.
With the COVID-19 pandemic, it is more important than ever to keep the fresh food supply chain open. Due to the ever shifting and changing nature of the situation, growers and shippers have been faced with many unique workforce and labor challenges, which have forced them to adapt their processes and guidelines. One panelist noted that the COVID-19 situation is fluid and you need to be able to adapt your organization as it evolves.
One major issue with labor is working with seasonal workers from different areas. One grower in Mexico noted that this year it has been difficult to train new workers in the necessary hygiene and social distancing requirements mandated by the pandemic. Because workers need to be a certain distance apart, additional transportation and lodging have been necessary, driving up labor costs and creating operational challenges. While growers can, and have been, putting guidelines and processes in place in the field and packing houses to help with social distancing and cleaning and sanitizing, they cannot control what happens when workers leave their work in the field and go home for the day. Many workers are family oriented and used to interacting in close spaces. These workers go home to other family members or interact closely with co-workers and friends, who are also working and may have been exposed to the virus.
Organizations have been overcoming these labor and workforce challenges by putting social distancing processes in place on buses, in lodgings, out in the field, and inside packinghouses. Many participants stated that they have ramped up their cleaning and sanitization efforts as well, with hand sanitizer stations and disinfectant wipes littered throughout facilities. One panelist stated that their organization has assigned one person to be in charge of cleaning and sanitization to ensure consistency. In addition to cleaning and sanitization, organizations are also providing protective gear such as gloves and masks to employees as those materials become more readily available again.
While physical practices such as social distancing, cleaning and sanitizing, and the use of protective equipment are important; all participants stated that education and communication have been key components of their COVID-19 plans. Organizations start by making up-to-date facts and statistics about the virus available to employees. This information helps emphasize the importance of following social distancing and cleaning and sanitizing guidelines. Training and retraining are implemented in their operations. Many regulatory agencies, associations, and even internal organizations themselves are using resources such as videos, flyers, posters and fact sheets on how to stay safe, healthy, and properly sanitize to get rid of the virus. One participant stated that their association, like many others, has created a video on how to properly wash hands and has made it available to the public via their YouTube page. Resources like these are being utilized by growers and shippers globally to make sure that their workforce has the resources necessary to safeguard against the virus.
Overall, participants expressed concerns about their access to labor; the economic impact of extended shutdowns, and most importantly, the health and safety of their employees and consumers.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual town hall and virtual roundtable focused on the economics of recovery will be held next Wednesday, May 6.
Megan Nash, Program Director with Center for Growing Talent sat down with Satri Alpine, Director, Talent & Culture with The Oppenheimer Group, to discuss the health and safety of our work forces, adjusting to the new normal, and planning for re-entry back into the office.
On Friday, April 24, the USDA announced the RFP process for the new ‘Buy Fresh’ food-box distribution program. The program, which provides $100 million per month for fresh fruit and vegetable purchases, was created by the Families First Coronavirus Response Act (FFCRA). Bids are due on Friday, May 1 for the purchase of the agricultural products, the assembly of commodity boxes and delivery to identified non-profit organizations that can receive, store and distribute food items. Here are full details to the program.
Points to consider in your application:
Advice to find distribution partners:
The U.S. Chamber of Commerce is pleased to provide the Global Dashboard on COVID-19 Policies to stay informed of the ever-changing regulatory landscape in response to this pandemic. They will updating this tool regularly.
On April 23, the House passed a new $484 billion interim economic stimulus package after the Senate passed it on April 21. The bill replenishes the small business aid program and provides funds for testing and overwhelmed hospitals. Produce Marketing Association has strongly advocated for financial aid for small businesses impacted by the economic disruptions from the pandemic, including fresh produce and floral entities. Quickly replenishing these depleted funds is a welcome step.
Here are important takeaways from the newest stimulus package:
The president has indicated he will sign the bill. Congress will then turn its attention to the next stimulus bill which is meant to be a broader plan to aid state and local governments and may also include aid to those who have become frontline workers like caregivers and grocery store workers.
Additional information about the PPP and other aid programs can be found in the COVID resources section of pma.com
PMA will continue to advocate for our industry to ensure our needs are recognized as we continue to provide produce and floral products that are essential to the nation’s health and wellness.
Members of the fresh produce and floral supply chain connected in virtual roundtables on April 22 to discuss the most pressing COVID-19 pandemic disruptions directly impacting them and their businesses.
This week’s global trade conversation followed the Virtual Town Hall General Session’s theme of e-commerce, or as host, Ed Treacy calls it, “e-tailing.” A panel of industry experts joined Treacy in a Q&A session on how different sectors of the global supply chain are shifting and adapting to the new demand for e-commerce. Here are the key themes in the global trade sector that were discussed.
While e-commerce demand has been on the rise in the U.S. and Europe, China, a country that already had a higher interest in e-commerce than either the U.S. or Europe, has seen incremental shifts. During the peak of the pandemic in China (Late January in February), e-commerce traffic saw increases of 100 to 300 percent. Now that traffic has dropped off and normalized, they are seeing that the e-commerce is staying about 50 percent higher than it was before COVID-19.
Some of the main themes that participants discussed included packaging and delivery challenges as distributors shift from catering to foodservice, retail and wholesale organizations, to going direct to consumers (B2C).
Many of the packaging challenges start with design. The same size, look and packaging materials that are beneficial for foodservice and wholesale companies simply don’t work when delivering directly to consumer. Distributors should consider packaging in smaller quantities, using materials that appeal to consumers from both an aesthetic and sustainability mindset and using materials that will withstand the lack of control over temperature in the last mile of delivery to consumers’ doorsteps.
In China, packaging costs and regulations provide motivation to cut back on the amount of packaging they use. When delivering products to consumers, distributors will safely package multiple products together to use less material. They have also gotten creative when looking at delivery methods. Worry about the lack of control over temperature in the last mile has motivated distributors to move product to smaller refrigerated warehouses directly in areas much closer to consumers so that the product is in non-regulated temperatures for less time.
At the conclusion of the session PMA Vice President, Global Membership and Engagement, Richard Owen shared several funding options that the U.S. Congress and the White House have made available in the past few weeks.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual roundtable focused on the global trade sector of our industry will be held next Wednesday, April 29.
USDA has released additional details about the ‘Buy Fresh’ foodbox distribution program created as part of the CARES Act legislation. The program invites companies to submit bids to distribute fresh produce to food banks and similar outlets.
• April 24 – Applications open
• May 1 – Bids due
• May 8 – Awards announced
• May 15 – Food distribution begins
As part of President Trump and Secretary Perdue’s April 17th announcement of a $19 billion Coronavirus Farm Assistance Program, USDA today announced that it is exercising authority under the Families First Coronavirus Response Act to purchase and distribute up to $3 billion of agricultural products to those in need. USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat products. USDA’s Agricultural Marketing Service (AMS) will procure an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products and $100 million per month in meat products to provide a pre-approved box of fresh produce, dairy, and meat products to food banks and other non-profits serving Americans in need.
USDA will issue a solicitation in the next two weeks to invite proposals from offerors to supply commodity boxes to non-profit organizations, identified by the offeror, on a mutually agreeable, recurring schedule. USDA will award contracts for the purchase of the agricultural products, the assembly of commodity boxes and delivery to identified non-profit organizations that can receive, store and distribute food items.
An informational webinar for interested participants will be held at 2 p.m. EDT on Tuesday, April 21, 2020, to provide an overview of the program and instructions for submitting offers. Register in advance for this webinar here: https://www.zoomgov.com/webinar/register/WN_hDiBdM_aSYmWps0RiO-UAg. If you are unable to participate in the webinar, a recording will be available.
Email questions to USDAFoodBoxDistributionProgram@usda.gov. To receive updates by email, subscribe online by visiting: “Stay up to date on USDA Food Purchases” available on the AMS Commodity Procurement website.
This report details the latest COVID-19 state-by-state legislative actions on non-essential businesses ordered closed, stay at home orders and additional business restrictions.
Members of the fresh produce and floral supply chain connected in virtual roundtables on April 15 to discuss the most pressing COVID-19 pandemic disruptions directly impacting them and their businesses.
Here are the top themes, insights and challenges about global trade:
Norway’s New Normal: Like much of Europe, Norway is several weeks ahead of the United States in the COVID-19 trajectory. The U.S. can learn a lot about where we will be in the next few weeks from where Norway is now, and how they are planning to forge ahead. On April 7 it was announced that the goal of slowing the spread of the virus had been achieved and restrictions are now beginning to be lifted on the country.
Throughout the shutdown many measures were put in place to ensure ongoing food production, Fishing and agriculture continued to function, particularly around securing labor and changing the rules for business and industry. Here are the changes that have been seen in the fresh produce and floral industry in Norway:
Government Affairs Update:
Economic Injury Disaster Loan Emergency Advance: The Economic Injury Disaster Loan Emergency Advance administered by the U.S. Small Business Administration that allows small businesses (less than 500 employees) to apply for an advance of up to $10,000. This loan program is a more traditional type of loan, and after creation it quickly became clear that there was need to design a much larger , more specific, loan program: the Paycheck Protection Program.
Paycheck Protection Program: The Payment Protection Program, also administered by the U.S. Small Business Administration, is a loan program designed to allow small businesses (less than 500 employees) to borrow up to 2.5 times their monthly payroll expenses (up to a maximum of $10 million). Money received from the PPP has the potential to be forgiven up to the entire amount of the loan if used for payroll purposes and the business plans to keep up to 75% of staff. The funds may also be used for rent, mortgage and utility payments.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual roundtable focused on the global trade sector of our industry will be held next Wednesday, April 22.
The United States usually requires produce (and other foods) at retail to bear information about the product’s country of origin. Produce destined for foodservice use does not have to bear that information.
USDA has announced “enforcement discretion” on its Country of Origin Labeling (COOL) program. On April 13, USDA wrote: “To facilitate the distribution of food to retail establishments from suppliers that have inventory on hand that is labeled for use in restaurants, effective April 20, 2020, and for a period of 60 days, AMS will not take enforcement action against the retail sale of commodities that lack an appropriate country of origin or method of production label, provided that the food does not make any country of origin or method of production claims. Once the 60-day period has ended, COOL designations will once again be required at covered retail establishments.”
USDA noted that this flexibility will allow food to be diverted from restaurants to retail, helping restaurants and their suppliers access additional markets, and making more product available to consumers shopping at retail. For more, see USDA’s announcement.
Members of the fresh produce and floral supply chain connected in virtual roundtables on April 8 around the most pressing COVID-19 pandemic disruptions directly impacting them and their businesses.
Here are the top themes, insights and challenges about global trade:
South Africa: PMA members in South Africa shared mix feelings as the situation evolves. Major challenges include harbor infrastructure, shipping container availability and documentation, although pace of loading at ports is expected to pick up. There is a lot of uncertainty around food safety protocols in exportation countries, which could impact the capacity of local service providers of fresh produce quality certification. Additionally, the cancellation of international fresh produce shows is concerning as many companies use these to connect with customers, build relationships and generate leads.
Europe: Supply from South to Northern Europe is currently stable with concerns around transport costs, border closings and labor in April and May. Retail demand has seen an increase in certain sectors due to families spending more time at home. Some retailers in Europe are thriving, with supermarkets in the U.K. concerned about supplying the population without longer operating hours. European agricultural processing industries have taken a big hit, with sales on the decline and uncertainties around what will be planted for the coming season. There is a positive outlook that some COVID-19 measures will be lifted in the coming weeks as hospitalization numbers start to drop in countries such as Italy, Spain, Belgium and The Netherlands.
China: In China, the domestic market is starting to regain stability, as Wuhan has reopened. Current concerns in China include the long-term effect on the economy, and how it will hit the 1st, 2nd, 3rd, and 4th tier cities differently. There is also uncertainty around the international situation, particularly in the U.S., as many trade shows get cancelled, hurting the chance for many export companies to bring their product to market. Additionally, there has been a rise in cancellations for several export companies. As China reopens, consumers seem to be rethinking how they spend their money. There has been a rise in local and online products, with high-end imported products also seeing stable sales.
Finally, labor is a key issue for growers in all parts of the world. One participating member outlined how they have worked to keep their employees healthy so they can continue to provide food the world needs. They strongly communicate health messages to the community as well as the workers. Social distancing is maintained in transportation and packing houses. Worker camps have been set up for migrant labor with strict controls for going in and out, maintaining sanitary conditions, providing food and more.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual roundtable focused on the global trade sector of our industry will be held next Wednesday, April 15.
On March 27th, Congress passed the Corona Aid, Relief, and Economic Security (CARES) Act. This package appropriated $349 billion for the Paycheck Protection Program (PPP). The PPP is a guaranteed loan program administered by the Small Business Administration (SBA). The purpose of the program is to support small businesses and help support their payroll during the coronavirus situation.
Q: Are agricultural producers, farmers, and ranchers eligible for the Small Business Administration’s Paycheck Protection Program (PPP)?
A: Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible.
Farms are eligible if: (i) the farm has 500 or less employees, OR (ii) it fit within the revenue-based sized standard, which is an average annual receipts of $1M.
Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.
Q: Are agricultural, and other forms of cooperatives eligible for PPP?
A: As long as other eligibility requirements are met, small agricultural cooperatives may receive PPP loans. Other forms of cooperatives may be eligible provided they comply with all other Loan Program Requirements (as defined in 13 CFR 120.10).
Q: Do H-2A or H-2B workers on my payroll count towards my eligibility and total possible loan amount?
A: Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.
Q: How do sole proprietor farmers provide accurate documentation regarding payroll, when they may not take a traditional salary?
A: SBA requires sole proprietors, independent contractors, and other eligible self-employed individuals to provide documentation to its lender that the business was in operation as of February 15, 2020. This documentation may include payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount.
Documentation options for payroll tax filings include the following:
IRS Form 941 (quarterly wages); IRS Form 944 (calendar year wages); State income, payroll and unemployment insurance filings; QuickBooks; bank repository accounts; and/or internally generated profit and loss statements. However:
More extensive FAQs can be found at the Treasury Department’s CARES Act website
The Small Business Administration (SBA) announced that, effective April 3rd, applications are being accepted through its lenders for the new Paycheck Protection Program (PPP). This forgivable-loan program will help cover payroll, utility, rent and mortgage expenses for up to eight weeks. Agriculture, food and floral firms with less than 500 employees are generally eligible.
While you should see your lender for specific details, here are key documents to learn more:
A related loan program is the Economic Injury Disaster Loan (EIDL)
Members of the fresh produce and floral supply chain connected in virtual roundtables on April 1 around the most pressing COVID-19 pandemic disruptions directly impacting them and their businesses.
Here are the top themes, insights and challenges about global trade.
The market in China has stabilized and demand is getting back to normal as consumers understand that produce is associated with health benefits. However, there is concern in China of a second wave of outbreaks. On the shipping situation in China, importers are concerned about their availability to shipping supply – will some lines be cut? E-commerce is booming. Retail is starting to get back to normal, with wholesale still soft. In terms of domestic production, table grapes, citrus and apples are selling particularly well. Chinese importers can now apply for an exemption of U.S. tariffs, which should help make U.S. suppliers more competitive.
The market in Peru was also discussed. A quarantine was put in place on March 16 and is being strictly enforced. All businesses have ground to a halt, except essential industries. The biggest challenges for growers revolve around the logistics of labor and keeping the paid workforce productive. It was noted that it is important to keep the payment chain going to avoid shortages in working capital, consumer demand and supply chain.
Also discussed in the session was the change in sales volume both pre and now in the middle of COVID-19 outbreak. In China, food prices increased until the government stepped in to regulate. Now there is no panic buying and the government is making sure retailers are open to decrease consumer panic.
Air transportation was also noted as a challenge. In the case of Chile and Peru, air transportation is down to 30% of normal. Few cargo planes are still in use, and those are expensive. There is a challenge for those goods shipped as belly freight via passenger airlines, as some lines have come entirely to a halt. This will affect the exportation of subtropics and other products that rely on airfreight. There will continue to be challenges getting containers back to origin as retail demands in LATAM start to decline.
The overall biggest challenge noted by the group was uncertainty. There is no sense of how long it will last or how bad it will be. We can look to Asia for patterns and some sense of forecasting as they start to emerge, but there is really no way to know.
This is part of a series of weekly virtual events designed to provide up-to-date information and opportunities to connect and discuss throughout the COVID-19 pandemic. The next virtual roundtable focused on the global trade sector of our industry will be held next Wednesday, April 8. Keep checking pma.com for the most current industry resources and information about the pandemic.
PMA joined 75 other produce organizations to encourage USDA to quickly act on five recommendations to stabilize the industry through the recently-passed Congressional stimulus plan.
The U.S. CARES legislation, also know as COVID-19 phase 3, is the third stimulus package to provide economic assistance to businesses impacted by the coronavirus. Here is a summary of CARES.
Included within the CARES package are forgivable small business loans. Here are the key components of the Payment Protection Program.
Three bills have passed the U.S. Congress that offer economic stimulus to address COVID-19 financial hardships. Here is a detailed summary of all three bills.
What can the U.S. learn from the ongoing situation across the globe? This was a significant theme from the Produce Marketing Association’s first ever virtual town hall.
Here are the key takeaways.
On Friday, March 27, President Trump signed the $2 trillion stimulus aimed at alleviating the impact of COVID-19 pandemic on the American public and U.S. economy.
Here are a few key takeaways from the stimulus package:
PMA will work to encourage the Administration and other groups to ensure fresh produce and floral challenges related to COVID-19 are addressed in the implementation stage of the stimulus package.
HR 6201 is a bill introduced by Rep Nita Lowey, D-NY, that responds to the COVID-19 outbreak.
The bill specifically makes provisions for paid sick leave, tax credits, unemployment benefits and other items.
The recent federal stimulus packages passed by the U.S. Congress includes significant funding for small businesses (including fresh produce and floral operations) dealing with the financial impacts of COVID-19.
In particular, the new SBA loan program, the Paycheck Protection Program, is intended to keep workers on small business payrolls through offering forgivable loans.
The U.S. Department of State has eased worker visa (H-2A) processing requirements, resulting in quicker availability of farm labor into the U.S.
The CARES Act provides significant funding related to the COVID-19 outbreak. Key provisions related to workers and farmers in the CARES Act.
As a result of member input, PMA has recently joined other associations to contact congressional and administration authorities with requests to support industry issues:
Facing disruptions across the supply chain, our members have told us they need help as markets shift and preferences change in response to this global crisis.
We are tracking the impact on trade and labor, namely the potential for border closures, the impact on seasonal worker availability, and cross-border trucking, and communicating this globally.
To help you and your employees prove that they are vital and are allowed to travel within the United States, despite other travel bans, PMA is providing you with:
These documents are available in Spanish/Estos documentos están disponibles en español:
Check back regularly for more information.