Middleman

March 09, 2022

I stopped by our local market last weekend to restock my supply of bird seed.  I have mentioned how our store is rearraigning stock to meet the demand for online delivery.  Lately I have found it hard to know where many of my supplies are located.  As I passed another shopper talking with an employee, I heard the employee say, “I am not sure where that is, I have been off for two days and now I can’t find anything.”  I located the bird supplies in a different section of the store, decided on the seed and squirrel food I was looking for, and then went out to the garden center to check for early stock.  There were a few flowers and a small rack of vegetables and herbs.  The racks with lawn care treatments also had the 40-pound (18 kg) bags of seed that used to be inside the store.  As I approached the seed, I noticed a flurry of wings.  Apparently, the sparrows had decided to cut out the middleman and get their seed from the source.

When I looked online, I found that a middleman is defined as a trader who buys from producers and sells to retailers or consumers, serving as an intermediary or go-between.  The transfers of goods that occur between the producer to the retailer is called a supply chain.  This involves a middleman at each level of transfer.  For the last two years global supply chains have been strained as shipping routes are snarled by the pandemic, extreme weather slowed shipment, and a notable blockage of a canal caused delays.  The transfer of goods along the supply chain has caused the breakdown or delay in moving all sorts of goods to market.  Each transfer through a middleman raises the price and has the potential for added delays.

Many agribusinesses and food processors source raw materials from smallholder farmers, and over the past 20 years there has been a shift towards more traceable supply chains.  Rather than purchasing crops that have passed through several layers of collectors (middleman), firms are sourcing directly from farmers or trusted aggregators.  The drivers for this change include concerns about food safety, child labor, and environmental sustainability, as well as a desire to increase productivity and improve crop quality.  This also gives the retailer greater price control.

THOUGHTS:  Supply chain delays have caused businesses to react like our market’s sparrows and seek ways to cut out the middleman.  Restaurants and markets are increasingly advertising food as “locally sourced”.  The use of this term is not regulated and is determined by the seller.  Some stores consider vegetables grown within 100 miles as local, while others believe it only includes foods produced within a 10-mile radius.  Globalization encouraged corporations to seek the lowest cost goods, regardless of the middleman.  Supply chain delays now encourage goods manufactured or produced locally (nationally).  It is not cheaper if you cannot get it.  Do the work.  Follow the science.  Change is coming and it starts with you.