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Cold Storage in a Post-Covid World

Cold Storage in a Post-Covid World

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Empty grocery shelves. Shuttered meat processing facilities. Overbooked grocery delivery services. The COVID-19 crisis pushed our food supply system to its limit. The critical behind-the-scenes component holding it together: cold storage.

Cold storage is the infrastructure and real estate subsector consisting of large refrigerated warehouses. These warehouses store the U.S.’s fresh and frozen produce and protein while they move from farmer to processor, wholesaler to distributor, and direct to consumer. Though cold storage is far from top of mind for most people, it is a vital component of the food supply chain. Underlining the point, in March 2020 the U.S. Department of Homeland Security classified cold storage facilities and their employees as essential infrastructure, keeping them open and operating through the peak of pandemic. Ultimately, the frontline workers in this sector prevented widespread food shortages across the country.

The experience of this pandemic has changed the outlook for cold storage as an asset class, with future demand augmented by three key trends emerging from the pandemic: increasing inventory levels, shifting global food flows and automation. These trends, reinforcing previously existing growth drivers, are serving as a catalyst for the cold storage sector as it advances from a niche investment subsector to a core infrastructure asset class.

Trend 1: Reversing inventory management strategies

In the context of food, just-in-time refers to the slimming of inventory levels at every step of the food supply chain as a means of reducing cost and increasing capital efficiency. As the novel coronavirus pandemic unfolded, a complex story of parallel food supply chains played out, one for commercial users such as restaurants and one for consumers, in the form of opposite demand shocks, both impacted by the broader shift to just-in-time inventory.

Weekly U.S. sales, year-over-year

On the consumer side, demand for basic food products skyrocketed. The consumer/grocery supply chain, precariously balanced from years of paring down to just-in-time inventory levels, buckled under the shock, manifesting as images of empty grocery store shelves across U.S. cities that will be remembered for a long time to come.

Weekly U.S. grocery sales, year-over-year

Meanwhile, with restaurants across the U.S. all but shuttered, product that could not shift from the restaurant/commercial supply chain to the consumer supply chain backed up in the limited warehousing stock available. Record year-on-year levels of items such as frozen poultry, beef, and potatoes were in cold storage in March  2020.

Frozen product in cold storage

The answer to a higher frequency of demand shocks in our food system resulting from pandemic risk is “surge capacity”. Surge capacity is the ability to rapidly scale output in times of acute stress. In the post-COVID world, we will see larger tenant demand for food storage capacity across the supply chain – from retailers to wholesalers and producers. Larger storage capacity means a need for more warehouse space, square footage and pallet positions.

Trend 2: Changes to global food flows

Prior to the start of the pandemic, U.S. food imports had experienced a decades-long increasing trend. Contributing factors include improvements in containerization and storage, evolving tastes of U.S. consumers, new varietals expanding geographies of production, and lower costs attributable to labor and reduced tariffs.

U.S. food imports, 2000-2017

The current pandemic has revealed the precarious nature of long, global food supply chains. While advocates of local/regional food systems rightly point to these approaches as resilient in times of disruption, the complete picture is not so clear-cut.

First, consuming fresh produce year-round is an important component of a healthy diet, and not just for those in regions of the U.S. with longer growing seasons. Second, to extrapolate the lessons of the novel coronavirus pandemic, epidemic outbreaks can have a highly concentrated impact on specific cities and regions. An entirely closed-loop food system is not a resilient solution in the face of pandemic risk.

The resilient answer lays in a highly open food system with low friction for domestic production to flow through the country as needed, supplemented by imported items from diversified source countries. Similarly, the world will continue to benefit from increasing U.S. food exports. For example, in the context of the protein sector, the effects of a very different epidemic, African Swine Fever (“ASF”), are playing out in real-time. ASF is a highly contagious and deadly virus affecting pigs, hogs and boars. ASF was first reported in China in August 2018 and decimated swine populations through 2019. As a result, U.S. swine exports are expected to play a significant role in filling Chinese demand for pork products.

Shifting to a resilient food system of open product flows will require not just additional square footage of cold storage, but a high-quality and diversified stock of facilities. Port-located facilities, which have attracted significant development attention to date, will continue to be critical. However, the buildout of a network of facilities at intermodal logistics hubs, in secondary and tertiary city population centers, and adjacent to centers of food production will also play an essential role.

Trend 3: New worker safety practices and rapid adoption of automation

Social distancing is a difficult proposition on the warehouse and production facility floor, and occurrences of concentrated COVID-19 outbreaks in distribution centers and food processing plants have taken a toll on workers, their families and the communities that support them.

The most accessible and short-term solutions were quickly rolled out across facilities. These measures are focused on keeping workers safe against the immediate risk posed by COVID-19 and include occupational design changes and workforce education.

On the automation side, the introduction of advanced technologies for new cold storage facilities has accelerated. Economics will continue to drive adoption, supplemented by the emerging health benefits of reducing employee density in facilities.

Moving forward

During this challenging year, cold storage has emerged as the most dynamic component of the real estate and infrastructure asset class, and the crisis and resulting drive for resilient food supply chains is proving to be an inflection point for accelerated growth and rapidly ramping demand. In the dark of these times, cold storage is shining bright.

We thank all essential workers in cold storage and food processing who are continuing to provide a secure food supply for our country through the COVID-19 pandemic.

A full version of this article is available at www.coldsummit.com.

Visit the NAIOP Response: COVID-19 page for critical resources and knowledge to support you now.

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Government

Fauci Net Worth Soared 66% During Pandemic

Fauci Net Worth Soared 66% During Pandemic

The net worth of Dr. Anthony Fauci’s household soared a whopping 66% over the course of the pandemic,…

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Fauci Net Worth Soared 66% During Pandemic

The net worth of Dr. Anthony Fauci's household soared a whopping 66% over the course of the pandemic, according to new financial disclosures obtained by OpenTheBooks.com. Fauci reported a Jan 1, 2019 net worth of $7,523,634. By Jan 1, 2022, it had grown to $12,677,513.  

Values are as of Jan 1 each year. Chart via OpenTheBooks.com

As director of the National Institute of Allergy and Infectious Diseases, Fauci was paid a 2021 salary of $456,028, making him the highest-paid employee in the entire federal government. His wife, Christine Grady, is chief bio-ethicist for the National Institutes of Health, does very well too, raking in a $238,970 salary last year.

Fauci is famously paid more than the president, and his wife collects more than the vice president. However, those hefty federal salaries aren't the only driver of the Fauci household's pandemic-era enrichment.

In 2021, Fauci was awarded the Tel Aviv University-affiliated Dan David Prize, which came with a $1 million check. The prize committee said Fauci "has been widely praised for his courage in speaking truth to power" during the Covid-19 pandemic.

The committee was apparently oblivious that Fauci was the power and routinely spoke falsehoods about everything from the usefulness of masking to herd immunity, the efficacy of vaccines, and NIH funding of gain of function research at the Wuhan Institute. 

As is customary, Fauci donated some of his prize money back to be awarded as student scholarships, but still pocketed $901,400, according to the financial statements reviewed by OpenTheBooks.com. 

Though it's chump change compared to the Dan David Prize, Fauci also scored $12,500 from both the Elliot Richardson Prize in Public Service and the Abelson Prize from the American Association for the Advancement of Science, and got $5,198 when he was named Federal Employee of the Year at the 2020 Samuel J. Heyman Service to America Medals ceremony.  

Fauci even did some moonlighting as an editor for McGraw Hill, taking home $100,000 for his work in 2021. 

There's no indication Fauci made any "shrewd" investments a la Nancy and Paul Pelosi. According to the financial disclosures, Fauci's portfolio comprises broad mutual funds with no individual stocks: 

"These funds were held in a mix of trust, retirement, and college education accounts. Fauci has an IRA worth $706,219 (up $67,700); a defined benefit brokerage account totaling $2,551,210 (up $147,688); and a revocable trust worth $7,014,197 (up $1,718,299). His wife’s revocable trust is worth $2,269,225 (up $306,406) and an IRA totaling $136,662 (up $16,385)," reports OpenTheBooks.com. 

OpenTheBooks.com has filed four federal lawsuits against NIH to pry loose additional details not only about Fauci but also about royalties received by other NIH employees.  

Though Fauci has announced he'll retire by the end of the year, the wheelbarrows full of taxpayer money will keep on rolling his way. When you're the highest-paid employee in federal government history and you've been on the federal payroll for more than 55 years, that'll make for an astounding pension of some $375,000 a year. 

It's emblematic of the whole miserable Covid-19 spectacle: Bureaucrats wallow in government money while ordinary people suffer the ever-mushrooming destruction caused by public health's catastrophic lockdown and mandate regime.  

Tyler Durden Thu, 09/29/2022 - 23:20

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This Thanksgiving, Supplies Of Turkey, Eggs, & Butter Will Be Extremely Tight In The US

This Thanksgiving, Supplies Of Turkey, Eggs, & Butter Will Be Extremely Tight In The US

Authored by Michael Snyder via The Economic Collapse…

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This Thanksgiving, Supplies Of Turkey, Eggs, & Butter Will Be Extremely Tight In The US

Authored by Michael Snyder via The Economic Collapse blog,

If you love to cook, this upcoming Thanksgiving may be a real challenge for you.  Thanks to a resurgence of the bird flu, supplies of turkey are getting tighter and tighter.  Sadly, the same thing is true for eggs.  And as you will see below, reduced milk production is sending the price of butter into the stratosphere.  Thanks to soaring prices, a traditional Thanksgiving dinner will be out of reach for millions of American families this year, and that is extremely unfortunate.  Of course all of this is happening in the context of a horrific global food crisis that is getting worse with each passing day.  Yes, things are bad now, but they will be significantly worse this time next year.

The bird flu pandemic that has killed tens of millions of our chickens and turkeys was supposed to go away during the hot summer months, but that didn’t happen.  And now that the weather is starting to get colder again, there has been a resurgence of the bird flu and this is “devastating egg and turkey operations in the heartland of the country”

Turkeys are selling for record high prices ahead of the Thanksgiving holiday as a resurgence of bird flu wipes out supplies across the US.

Avian influenza is devastating egg and turkey operations in the heartland of the country. If just one bird gets it, the entire flock is culled in order to stop the spread. Millions of hens and turkeys have been killed in recent weeks. As a result, prices for turkey hens are nearly 30% higher than a year ago and 80% above pre-pandemic costs. Just as concerning are inventories of whole turkeys, which are the lowest going into the US winter holiday season since 2006. That means there will be little relief from inflation for Thanksgiving dinner.

In the months ahead, we could see tens of millions more chickens and turkeys get wiped out.

Egg prices have already tripled in 2022 and the price of turkey meat is up 60 percent.  Unfortunately, this is likely just the beginning

Turkey hens are $1.82 a pound this week, according to Urner Barry, compared to $1.42 last year and $1.01 before the pandemic. Meanwhile, wholesale egg prices are at $3.62 a dozen as of Wednesday, the highest ever, up from a previous record of $3.45 a dozen set earlier this year, said John Brunnquell, chief executive officer of Egg Innovations, one of the biggest US producers of free-range eggs. Consumers have seen prices for eggs at grocery stores triple this year, while turkey meat rose a record-setting 60%, according to a Cobank report.

Meanwhile, supplies of butter are steadily getting tighter as well

Lower milk production on U.S. dairy farms and labor shortages for processing plants have weighed on butter output for months, leaving the amount of butter in U.S. cold storage facilities at the end of July the lowest since 2017, according to the Agriculture Department.

Tight supplies have sent butter prices soaring at U.S. supermarkets, surpassing most other foods in the past year. U.S. grocery prices in August rose 13.5% during the past 12 months, the largest annual increase since 1979, according to the Labor Department. Butter outstripped those gains, rising 24.6% over the same period.

The trends that are driving up the price of butter aren’t going away any time soon, and so we are being warned to brace ourselves for “elevated” prices for the foreseeable future…

The forces at work in butter highlight the challenge of curtailing inflation. Economic pressures fueling high prices for livestock feed, labor shortages and other factors could persist, keeping prices for the kitchen staple elevated longer term.

To me, slathering a piece of warm bread with a huge chunk of butter is one of the best things about Thanksgiving.

And most of us will continue to buy butter no matter how high it goes.

But the truth is that rapidly rising food prices are forcing vast numbers of Americans to adjust their shopping habits.  Here is one example

For Carol Ehrman, cooking is a joyful experience.

“I love to cook, it’s my favorite thing to do,” she said. She especially likes to cook Indian and Thai food, but stocking the spices and ingredients she needs for those dishes is no longer feasible. “When every ingredient has gone up, that adds up on the total bill,” she said.

“What used to cost us $250 to $300 … is now $400.” Ehrman, 60, and her husband, 65, rely on his social security income, and the increase was stretching their budget. “We just couldn’t do that.”

The global food crisis is starting to hit home for many ordinary Americans, and we need to understand that this crisis is still only in the very early chapters.

David Beasley is the head of the UN World Food Program, and he is actually using the word “hell” to describe what is potentially coming in 2023

“It’s a perfect storm on top of a perfect storm,” Beasley said. “And with the fertilizer crisis we’re facing right now, with droughts, we’re facing a food pricing problem in 2022. This created havoc around the world.”

“If we don’t get on top of this quickly — and I don’t mean next year, I mean this year — you will have a food availability problem in 2023,” he said. “And that’s gonna be hell.”

The World Food Program keeps sounding the alarm, but very few of us in the western world seem to be taking those warnings very seriously.

People are literally dropping dead from starvation in some areas of the globe right now, and a new report that the WFP just released says that there are 19 “hotspots” where we could see a “huge loss of life” between October and January…

World Food Programme (WFP) and the Food and Agriculture Organization of the United Nations (FAO) are out with a new report outlining countries that “are either already starving or on the brink of disaster.”

WFP and FAO found 19 hunger hotspots worldwide, with most countries in Africa, the Middle East, and even some in Central America. They call for urgent humanitarian action between October 2022 and January 2023 to avoid “huge loss of life.”

Afghanistan, Ethiopia, South Sudan, Somalia, Nigeria, Yemen, and Haiti are labeled “hotspots of highest concern,” facing catastrophic hunger levels.

The sort of famines that we were warned about are already starting to happen right in front of our eyes, but most people simply will not care as long as they are not going hungry themselves.

What those people do not realize is that this global food crisis is going to continue to spread.

As supplies of food get tighter and tighter, prices will continue to soar and shortages will become more common.

We truly are in unprecedented territory, and the pain that is ahead will greatly shock all of the lemmings that just kept assuming that everything would work out just fine somehow.

*  *  *

It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

Tyler Durden Thu, 09/29/2022 - 21:40

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Computers calling time on isolation

Kyoto–Across the world, many people infected with Covid-19 have been made to completely isolate from others in order to avoid passing on the infection….

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Kyoto–Across the world, many people infected with Covid-19 have been made to completely isolate from others in order to avoid passing on the infection. Some countries still recommend minimum isolation periods for as long as 10 days from when patients start to develop Covid-19 symptoms.

Credit: LAIMAN

Kyoto–Across the world, many people infected with Covid-19 have been made to completely isolate from others in order to avoid passing on the infection. Some countries still recommend minimum isolation periods for as long as 10 days from when patients start to develop Covid-19 symptoms.

Professor Shingo Iwami, affiliated with Kyoto University’s Mathematical Biology Laboratory at the Institute Advanced Study of Human Biology (WPI-ASHBi) says, “Although a long time for isolation reduces the overall risk of patients passing on the infection, there will always be patients who recover early and have to accept several days of redundant isolation while no longer posing an infection risk. We would like to calculate a way to reduce this unnecessary disruption in people’s lives as well as the broader losses for the economy.”

Writing in the journal Nature Communications, an international team of scientists, led by Iwami, has reported a simulation of the potential risks and benefits of ending an individual’s isolation early using antigen tests instead of isolating patients for a fixed time. They call for more sensitive and regular antigen testing to help reduce isolation periods for patients recovering from Covid-19.

The team decided to base their model on antigen rather than PCR testing, trading sensitivity for short turn-around time, low cost, and practicality. Iwami explains that although antigen tests do have a risk of generating “false-negatives” and fail to detect individuals who could still be infectious, there are clear benefits to getting results within an hour rather than waiting a day.

Their model accounts for the sensitivity of antigen tests as well as factors like the amount of virus in a patient that makes them infectious. These are then balanced against the acceptable risk of missing unrecovered and potentially infectious patients, by letting them out of isolation early.

Using their model, the team compared different scenarios to identify the best strategy. For example, the model projects that letting a recovering patient leave isolation after 2 consecutive negative results on 2 days in a row would spend 3.9 days of redundant isolation after their recovery. But under these conditions 1 in 40 patients would continue to pose an infection risk.

More conservative approaches might increase the burden on patients by requiring more than 2 consecutive negative test results of antigen tests.

Iwami says, “The epidemic has still not completely subsided, and we are living with a lot of uncertainty with regard to new variants of the virus. Antigen tests could help, but there is also a real need for worldwide systematic guidelines that simultaneously reduce risks and burdens. We hope this simulator will help doctors and policy makers meet those demands.”

******************
About WPI-ASHBi https://ashbi.kyoto-u.ac.jp/
Institute for the Advanced Study of Human Biology (ASHBi) was launched in October 2018 with funding from the World Premier International Research Center Initiative (WPI) Program of the Ministry of Education, Culture, Sports, Science and Technology (MEXT). The Institute inaugurated with 18 principal investigators (PIs) to create and promote human biology to elucidate key principles of human traits, including disease states. The Institute will perform interdisciplinary research between biology and mathematics (machine learning and topological data analysis) and between biology and humanities/social sciences (bioethics and philosophy on life), respectively. The Institute implements three research development cores for cutting-edge single-cell genome information analysis, primate genome editing, and non-human primate phenotype analysis, respectively. The Institute establishes a link with international institutions such as the EMBL, University of Cambridge, and Karolinska Institutet, creating a stratified organization for research promotion and strengthening its international profile.


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