Wahdat & Lusk: Achilles Heel of U.S. Food Industries

In The Achilles Heel of the U.S. Food Industries: Exposure to Labor and Upstream Industries in the Supply Chain, authors Ahmad Zia Wahdat and Jayson L. Lusk (both Agricultural Economics, Purdue University) consider how the complexities and interdependencies of the agri-food supply chain leaves modern-day food industries vulnerable to disruption.

Food manufacturing industries in the U.S. operate within a complex supply chain. Economic “shocks” to industries within this supply chain, such as the COVID-19 pandemic, can have ripple effects on other industries, with food industries identified as the most prone to disruption. During the pandemic, food process industries were considered the bottleneck of the food supply chain because while there may be many farmers and retail food outlets, all food must be processed through a limited number of processors. Thus, the authors explain, disruptions to the processing sector can have significant consequences on the functioning of the supply chain.

The authors looked at different categories in food manufacturing and measured its exposure to upstream industries (particularly labor). The article shows how certain areas of the food industry are more susceptible to labor shocks than others. Specifically, the animal processing industry made most of their purchases from only a few upstream industries. Due to the limited number of providers for these industries, labor issues upstream have a disproportionally large impact on supply, leading the authors to posit that the largest vulnerability for the U.S. food industry is production workers in the animal processing industry.

By highlighting upstream industries and labor occupations on which food industries rely, the authors hope to provide a big-picture understanding of food industries’ vulnerabilities and allow academics, policymakers, and industry managers an avenue through which to explore resiliency solutions.