Milling & Baking News - October 6, 2020 - 16

Business

but was recently discovered to have
spread to Germany, "have disrupted
the feed chain and makes it very difficult to figure out what the demand is
going to be."
Another trend to consider in the
post-COVID-19 era, according to Rabobank, is agricultural supply chains
becoming increasingly digital. The report foresees farmers adopting digital
platforms to collect, manage and share
information along the supply chain to
enhance traceability or to track sustainability practices in production agriculture. E-commerce platforms will grow
in the farm input supply chain, which
has implications for producers and input suppliers, Mr. Nicholson said.
Mr. Nicholson said he foresees
"major changes in the farm input
distribution system. It will go to an
Amazon-type format where you will
have seed and chemicals delivered directly to the farm. They will no longer
be going to the local agronomy center
to get these things. It will change the
landscape. Those changes are because

of COVID-19 and also what's happening with inputs."
The good news, he said, is that these
changes would offer opportunities
for forward-thinking producers and
companies in the global grain supply
chain to succeed. Across the entire
grain and oilseed supply chain, there
are impacts and implications that will
require business models to adapt and
show increased flexibility, he said.
Because COVID-19 has accelerated
the ongoing, decreasing long-term demand trend for corn-based ethanol,
farmers will need to be more in tune to
their local market and find new crops
to produce for regional processors such
as organic, non-GMO and gluten-free
grains as well as pulses for plant-based
protein foods, the report said.
The consensus among the Rabobank
experts was the food supply chain is
going to get shorter.
"Producers will start controlling
more of the supply chain," Mr. Nicholson said. "They used to control production and that was about it, but now

Economist urges snack producers
to prepare for full recovery
ARLINGTON, VA. - Just weeks before the November election, a leading
economist suggested that snack manufacturers look beyond the short term
and to six months or even two years
out to get a clearer picture on the future of the broader economy and to
better position their businesses for
what lies ahead.
Brian Beaulieu, chief executive officer and chief economist, ITR Economics, described the coronavirus
(COVID-19) and the election as shortterm distractions against longer-term
trendlines for growth. He called the
pandemic a "natural disaster," not an
economic one.
"There was nothing wrong with
the economy before COVID hit,"
Mr. Beaulieu told attendees at SNAC
International's
recent
Executive
Livestream Forum, a digital version
of the association's annual in-person
Executive Leadership Forum.
"In the long run, economic principles rule," he said.
COVID-19, he added, won't be a
"linear journey," with ups and downs
that affect the economy and shortterm business outlook. Both monetary and fiscal stimulus, he said, are
fueling a renewed expansion of the
economy. Gross domestic product hit
16 / October 6, 2020

Milling & Baking News

its nadir during the second quarter
this year and is expected to rise starting in the third quarter.
"It will be in 2022 before we fully
recover, but recover we will," Mr.
Beaulieu noted.
He added that there is likely
enough momentum in
the economy to drive
growth without future
government assistance.
"We don't need a second stimulus package,"
he said. "We are not
building that assump- Beaulieu
tion in."
That said, another fiscal package
would not hurt.
"If one comes about, it will simply
be adding fuel to the rising trends
we're talking about," he said.
Mr. Beaulieu encouraged snack
manufacturers to take a longer look
when examining their businesses and
the economy. ITR Economics predicted low inflation until post-2023.
He suggested waiting for the "dust
to settle after the election" for capital
investments, but that extremely low
interest rates make borrowing today
a good option for building their businesses.
He predicted a vaccine by the first

they control storage and logistics -
they act almost like any grain logistics
company except rail, vessel and barge.
They can get it to railheads, ports and
even export facilities."
As for grain processors and grainbased foods manufacturers, changes
regarding trade, views on globalization as well as food security all point
to diminished export volumes and
under-utilization of export facilities,
the report noted.
Mr. Nicholson said the grain and
oilseed supply chain may change as
players in the chain become more specialized and become stronger by emphasizing their strengths.
"This may take many forms," he
said. "If you have a strong export network, you would focus on exports.
Regional players would potentially
focus on grain origination and/or
possibly develop their traceability capabilities. In other words, more division of labor and specialization along
the supply chain makes it more flexible and safer." MBN
quarter of 2021 and its widespread
rollout to those who want to receive
it in the second quarter.
"Here's the story about COVID
regarding the economy," he said. "It
only accelerated some trends and
magnified some weaknesses and
magnified some strengths. The department stores you have been reading about were in trouble before
COVID ever hit. They were being
usurped by e-commerce. They never
really built robust e-commerce platforms that could deal with the likes
of Amazon."
Working at home, he added, is
another trend that was around long
before this year's exodus from the office.
"It's been accelerated because of
COVID," he said.
The move out of cities and the
surge of millennials buying housing
as they start families are two other
trends that have pushed forward
since COVID-19 struck.
He urged snack manufacturers to
take advantage of the current economy. Down the line, however, he added that the current stimulus will add
a "nitrous oxide" effect that could affect the economy several years down
the road, eventually sparking inflation.
"The worst is behind us, and the
best is yet to come," Mr. Beaulieu
said. MBN
bakingbusiness.com / world-grain.com


http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - October 6, 2020

Table of Contents for the Digital Edition of Milling & Baking News - October 6, 2020

Milling & Baking News - October 6, 2020 - 1
Milling & Baking News - October 6, 2020 - 1
Milling & Baking News - October 6, 2020 - 2
Milling & Baking News - October 6, 2020 - 3
Milling & Baking News - October 6, 2020 - 4
Milling & Baking News - October 6, 2020 - 5
Milling & Baking News - October 6, 2020 - 6
Milling & Baking News - October 6, 2020 - 7
Milling & Baking News - October 6, 2020 - 8
Milling & Baking News - October 6, 2020 - 9
Milling & Baking News - October 6, 2020 - 10
Milling & Baking News - October 6, 2020 - 11
Milling & Baking News - October 6, 2020 - 12
Milling & Baking News - October 6, 2020 - 13
Milling & Baking News - October 6, 2020 - 14
Milling & Baking News - October 6, 2020 - 15
Milling & Baking News - October 6, 2020 - 16
Milling & Baking News - October 6, 2020 - 17
Milling & Baking News - October 6, 2020 - 18
Milling & Baking News - October 6, 2020 - 19
Milling & Baking News - October 6, 2020 - 20
Milling & Baking News - October 6, 2020 - 21
Milling & Baking News - October 6, 2020 - 22
Milling & Baking News - October 6, 2020 - 23
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Milling & Baking News - October 6, 2020 - 30
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Milling & Baking News - October 6, 2020 - 40
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Milling & Baking News - October 6, 2020 - 48
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