ABSTRACT
The modern‐day food industries are part of a complex agri‐food supply chain, where food production has become efficient yet potentially vulnerable to supply chain risks. The COVID‐19 pandemic is a testament to that end. This article measures and identifies the U.S. food manufacturing industries' vulnerability to upstream industries and labor occupations by (a) calculating a food industry's diversification of intermediate input purchases across upstream industries, (b) quantifying the relative exposure of food manufacturing in a given industry and location to upstream input suppliers and labor occupations, and (c) estimating each food industry's gross output elasticity of inputs. This article also explores geographic heterogeneity in food industries' vulnerability. Among our results, we find evidence that the animal processing industry's output is relatively vulnerable to production labor, consistent with the observed disruptions to the meatpacking sector during COVID‐19, which were largely caused by labor issues. Our results may help academics and practitioners to understand food industries' vulnerabilities to upstream industries and labor occupations.
ABSTRACT
The modern day food industries are part of a complex agri-food supply chain, where food production has become efficient, yet potentially vulnerable to supply chain risks. The COVID-19 pandemic is a testament to that end. This article measures and identifies the U.S. food manufacturing industries' vulnerability to upstream industries and labor occupations by (i) calculating a food industry's diversification of intermediate input purchases across upstream industries, (ii) quantifying the relative exposure of food manufacturing in a given industry and location to upstream input suppliers and labor occupations, and (iii) estimating each food industry's gross output elasticity of inputs. Among our results, we find the evidence that the animal processing industry's output is relatively vulnerable to production labor which is consistent with the observed disruptions to the meat packing sector during COVID19, which were largely caused by labor issues. Our results may help academics and practitioners to understand food industries' vulnerabilities to upstream industries and labor occupations.
Subject(s)
COVID-19ABSTRACT
Understanding how farm household consumption responds to adverse income shocks can provide insight into household well-being and appropriate agricultural policy. Using a split-sample survey of Indiana specialty producers, where we randomly assign respondents to treatments that vary the size of a hypothetical income shock, we estimate the relationship between income loss and household consumption. Given that postdisaster producers' risk preferences are important for business decisions, we elicit producers' risk preferences. We find that food and miscellaneous expenses are the most sensitive to income losses. We also find evidence for decreasing absolute risk aversion among producers after the income loss shock.