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WaPo: ‘How climate change & extreme weather are crimping America’s pie supply’

By Laura Reiley

TAMPA — For months, supply chain issues and labor shortages have been putting the squeeze on Mike’s Pies, a popular commercial bakery here that’s been selling pies based off owner Mike Martin’s mother’s recipes for three decades.

But another powerful factor — climate change — is heightening those challenges. Its impact is less visible but more enduring, and its consequences are playing out right as the food industry is struggling to avoid holiday season shortages.

Many of the ingredients in Mike’s Pies’ pies — wheat, berries, honey, soybean oil, among numerous others — have been hit hard by climate and weather effects, including droughts, wildfires and power shutdowns around the world. That’s sending prices soaring and, combined with a scarcity of workers and other hurdles, is causing mayhem throughout the global food supply chain.

“We are cutting every order that we ship; we can’t fulfill the obligations,” Martin said.For consumers, the impact on the food business means that stocks of seasonal items, from entrees to desserts, are significantly below pre-pandemic times, with meat and pies at the highest risk of being out of stock entirely, according to IRI, a global data provider for retail companies. Food prices are also way up, rising 5.1 percent in October over last year, the fastest rate in years, according to inflation data released last week by the U.S. Bureau of Labor Statistics.

Economists broadly expect that the labor and supply chain disruptions should work themselves out as the pandemic fades, but they say climate and weather impacts will remain major threats to food and a growing number of other industries.

“There is no place to run and hide from extreme weather events,” said Michael Swanson, Wells Fargo’s chief agricultural economist.

While the world’s food conglomerates and agricultural giants are acutely aware of the climate threat, near the end of the supply chain, Martin is more focused on tackling whatever crisis is front of him — regardless of the cause.

“I don’t know what tomorrow is going to bring. I could walk in, and they say we can’t get boxes or we can’t get sugar,” he said. “Orders are going through the roof, prices are skyrocketing and we’re having to order way out and to order more than we’ve ever ordered.”

Honey, another critical ingredient in graham cracker crumbs, is among those products facing the most weather- and smoke-related impacts, many of which are tied directly to climate change, says Dave Gustafson, professor of biological systems engineering at Washington State University.

Tim Galloway, the chief executive of Wisconsin’s Galloway Co., which supplies Mike’s Pies with sweetened condensed milk, is having his own headaches; he says climate change is in part to blame. Dairy prices spike when animal feed prices soar, so that poor wheat harvest also affects what he pays.
“We’re seeing more dramatic weather shifts, [and] these factors influence dairymen in these parts of the country,” said Galloway, who buys most of his milk from Wisconsin. As input costs such as alfalfa for animal feed — this year 45 percent of alfalfa hay acreage in the United States experienced severe drought conditions — get more expensive, small, family-run Wisconsin dairies are closing. In 2019 alone, 10 percent of the state’s dairies shuttered, ceding ground to California, the nation’s top dairy state.

Extreme weather has affected Galloway of Wisconsin in additional ways. One of the contract packagers the company works with was shut down for six weeks because it couldn’t get plastic bags, fallout from last winter’s polar vortex in Texas, which triggered a global plastics shortage.

And then there are imports like vanilla.

The spice is grown primarily in Madagascar, according to Marcel Goldenberg, head of proprietary pricing at Mintec, which is at risk of a climate change-induced famine.

The road ahead

The food industry is sharply aware both of its impact on climate and its vulnerability to weather events. Agricultural companies such as ADM, Cargill and Bayer AG have pledged to work with farmers to adopt practices that will reduce atmospheric carbon and methane, and most major food conglomerates have committed to cutting their carbon footprint measurably.

But as extreme weather buffets supply chains and causes ingredient shortages, often these multinational conglomerates’ own production lines are safer. Shortages and labor-related limits on production capacity force suppliers to cut off smaller customers, according to Bill Lapp, president of Advanced Economic Solutions, a consulting firm that specializes in assisting food companies with supply chain risk management.

Martin is a big man, and his company is well known in pie circles. But he’s no Sara Lee. In the grand scheme of things, he’s small.

On a recent day, he zips past the rows of double ovens, each of which can fit 92 pies but are currently spinning with sheet trays of chocolate cakes. There’s a 500-pound vat of pumpkin cheesecake filling, waiting for its graham cracker crusts, and behind it is a whiteboard scrawled with the day’s orders. There are 2,016 Key lime pies to Winn-Dixie, 776 Reese’s peanut pies.