Generation Farms CEO: Coronavirus Has Created Labor Shortage

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With over 650,000 cases of the coronavirus and the U.S. economy in a standstill as restaurants, retail, etc. all have been forced to shutter for the foreseeable future, the obvious question is: what kind of overall impact is this pandemic having?

Generation Farms and Optimum Agriculture CEO Gaston Marquevich joined TheStreet to lay out the impact that he's seeing across his sector.

Watch the video above for more.

Video Transcript:

Katherine Ross:
The coronavirus pandemic has shut down everything from schools to restaurants, and those closures are having a major impact on the overall supply chain. Joining me today to break down the impact he's seeing is Gaston Marquevich, CEO of Generation Farms and Optimum Agriculture. Gaston, more and more cases of the coronavirus are popping up. Are you worried about any of your workers getting it?

Gaston Marquevich:
Oh yeah, yeah, of course. And we are worried since the first date that this COVID-19 came to us. So basically we are implementing differences in our programs and difference in our rules and way to work, especially to protect our employees now. So for us, it's critical for us, as a food company, as a farming company, it's critical for us to protect our employees because we are in the high season in the Southeast, we do Florida and Georgia, and as an essential sector, the agriculture should play in foods to the country. So we need to make sure that our employees are protected and healthy. In order to protect the employees, I'm having them to works and I've been committing, as a food supplier, deliver the food to our country.

Katherine Ross:
Are you seeing any sort of labor shortage right now?

Gaston Marquevich:
Yeah, I think there is an issue, of course. There are many issues. One of the issues is a labor shortage. So, we started to work a conversation a month ago. So, but yeah, right in time when this COVID-19 came to us. So we normally use, in between Florida and Georgia, we normally use 1,200 employees as labor. So, we applied to the aid program. So normally, the program takes three months, and the last two or three year was taking like six months because all of this and then changes on the immigration policies, rules.

Gaston Marquevich:
So we've been very, very stressed about getting all the employees in place to allow us to pick up the crop from the ground. So we connect, a month ago, we contact the USUA team, the team that works with the U.S. Secretary of Agriculture, and they basically have been very flexible, very cooperative with us, and they count on the UCIS in California. So in California, they contact the U.S. embassy in Monterey and finally we get 500 employees in Florida and 450 in Georgia. So we don't have the 1,200 that normally we use, but we are okay with it the 950 right now.

Katherine Ross:
A couple of days ago Smithfield announced that it was temporarily shuttering its pork processing plant following a coronavirus outbreak. Do you anticipate further closures of plants due to this virus?

Gaston Marquevich:
Hopefully, no. We are expecting to be soon maybe, I mean, I'm not sure, in the next two weeks, two months. Sorry. I am optimistic that we can come back to our normal life and try to operate without all of this obstruction. But to be honest, we, on a farming sector, food supply and chains, as the President basically naming us as an essential sector, so basically we've been working full as normal but with a lot of restriction and limitations. So, hopefully we can come back to normal operation soon.

Katherine Ross:
What are you hearing from other CEOs or anyone else in your sector about this virus and its overall economic impact?

Gaston Marquevich:
We see that the bad is more focused on small and medium-sized growers. I think those sides of the business are having more stress to working through this stressful situation. Of course, everybody kind of now is working through a difficult time. But, I think companies on the medium and small sizes are having more complex [times] due to the limitation of resources they have. So labor is more difficult to find, everything is more difficult.

Gaston Marquevich:
So you have to have resources in place that allow you to get the resources you need to operate. So when you are a big company you have more resources to be flexible and accommodate the situation. So small and medium growers are working through a more difficult time due to a limitation of resources.

Katherine Ross:
I'm glad that you brought up the resources and small and medium players in this economy because I'm wondering, I'm seeing so many stories about farmers having to dump milk and fruit and veggies rotting because of the pandemic and the lack of restaurants buying up some of these items. Do you think that the government should be stepping in to help out more and distributing this food?

Gaston Marquevich:
Oh, yeah, yeah, yeah. I would say, as a grower and as a food supplier, we have two different big kinds of sectors, type of customer. One is the retailer, that, to be honest, they've been very strong during the last month or a month and a half. So, they've been very strong buying and they are increasing the purchase power because, basically, more demand for food.

Gaston Marquevich:
But the problem is, people who are more oriented to the food supplier, so basically your hotels or restaurant, they are having a very, very difficult time. Lucky for us as a company we are more closer to retail, and that basically helps us not to have the problem to throw our food away.

Gaston Marquevich:
So we have a short cabbage, and basically what we decide is to donate the food, not to throw away. So, we decide to donate the food to a food bank or food company that supplies a social impact in terms of feeding, restaurants or whatever. So we know we've been donating the food that we're not being able to sell.

Gaston Marquevich:
So I know, for example, back on their resources, limitations on resources, small and medium farmers have more limitations on resources. When you decide to donate the food, you have to pay some money to cover the food, put into a pallet, put into a tractor, and the tractor has to deliver it to a place that basically will be receiving the donation.

Gaston Marquevich:
So back to the limitation of resources on medium and small farmers, they are not ever to donate. So that's why you see pictures of growers pouring the milk or...out of the way because they don't have the money to take out of the ground and send to these social organizations, no?

Katherine Ross:
So is that where the government should step in? Should they be sending national guard, military, somebody to maybe help pick the plants or pick the fruit, vegetables, dairy and also then transport it to be donated? Is that even feasible?

Gaston Marquevich:
I don't think so, it's feasible, but I think it's feasible to send money and basically, they can manage the situation because they've been managing it for a long time. But if they have the economic resources in place, I'm sure that most of the medium and small farmers will be able to manage a limitation of resources and they will be able to, or even, a transfer to retailers or transfer to a donation.

Gaston Marquevich:
But I think, the government is doing the job of trying to implement different lines of creating to help the medium and small farmers and also big growers, because for us, we don't have a limitation of resources, but we've been paying our prices on most of our input. So we've been able to operate and we've been able to deliver the food, but [it's much more costly]...So I think that's a limitation for us too. So we spent more money on operating this year than last year.

Katherine Ross:
Gaston, thank you so much for taking the time to join us today, and for more on the coronavirus pandemic head on over to thestreet.com.

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