The coronavirus restraints have resulted in restaurants, hotels, cafeterias, and schools closing. Therefore, farmers numbers of potential clients are considerably decreasing due to the chaos in the worldwide supply chains (Newman & Bunge, 2020). On the contrary, the stores and markets are still in need of fresh dairy products and eggs of high quality (Newman & Bunge, 2020). However, it doesn’t seem simple for the farmers to shift to the proper packaging of milk and eggs that is suitable for such stores. As a result, American producers end up with abundant products they cannot sell (Newman & Bunge, 2020). They have to dump dairy produce and discard eggs even though they are of impeccable quality, and they are bound to lose money from such operations (Newman & Bunge, 2020). To sum up, such actions lead to farms bankruptcy and negative consequences in the agriculture supply chain.
Even though the Covid-19 global pandemic has negatively impacted the agriculture supply chain, the milk producers still remain competitive on the market. For instance, the farmers have the potential to cater to the stores needs by packaging the products that will already be ready for sale (Newman & Bunge, 2020). This shift might seem costly at first glance; however, farms lose considerably more money from dumping fresh dairy products and eggs (Newman & Bunge, 2020). Furthermore, American producers can focus on expanding the variety of goods made from milk and eggs. They can start making various types of cheese, yogurt, ice cream, butter, and sour cream. As a result, it might lead to an increase in revenue from the stores and markets, and furthermore, milk-producing farms will be less likely to be shut down. The wide range of dairy products might also benefit the businesses after the lift of the coronavirus restraints by attracting more customers.
The small milk-producing farms seem more monopolistically competitive due to several reasons. Small producers, such as Nancy Mueller, have to invest less in maintaining their businesses as they need less space for operating, fewer employees, and animal food (Newman & Bunge, 2020). Moreover, they might achieve more fruitful results even in coronavirus settings as they do not have such amounts of vast products left as large producing businesses in the USA. Consequently, small farms are not forced to dump dairy products and throw away eggs that cannot be sold. Overall, small milk-producing farms are capable of fully addressing the needs for the fresh products of stores and markets and are less likely to end up with abundant milk and eggs.
Large cheese producers such as Kraft And Sargento face stable oligopoly on the market. In other words, such companies are dependant on each other, and frequently, one firms actions might influence other similar businesses operating. Large producers might also be called oligopolistic as they are competing in attracting more customers to the market. As a result, instead of co-operating to thrive together in the food industry, businesses tend to cheat and seek ways to defeat their rivals. For instance, if one company presents a new product, the others copy it in their manner, and vice-versa. Furthermore, the pricing of their goods is mostly the same as the firms attempt to lure customers into purchasing their products since they are more affordable. In conclusion, due to the oligopoly, the large cheese-producing companies opt for cheating to outshine their competitors, which frequently yields negative repercussions to all businesses on the market.
References
Newman, J. & Bunge, J. (2020). Farmers Dump Milk, Break Eggs as Coronavirus Restaurant Closings Destroy Demand. Wall Street Journal. Web.