An Inflection Point for the American Produce Supply Chain Industry

The American fresh produce supply chain industry has reached an inflection point, occurring only once every few decades, due to two profound and controversial moves:

I. Power Shift in the American Fresh Produce Supply

California continues to be the major powerhouse of the American produce supply chain, providing well over half of the fruit, vegetable, and nut supply consumed by the people of the United States. However, due to the impacts of over-farming and climate change in California, and a chronic shortage of locally farmed fresh produce in much of the United States during the colder months, produce from South America and Mexico have grown to become major supplements and alternatives to domestically grown produce. Globally, South America is on its way to becoming a major producer for the global fresh produce supply chain. However, at this time, produce from both South America and Mexico face challenges. Moreover, a portion of American households, especially those “eat-local” fans, still simply prefer to buy U.S.-grown fresh produce.

II. AI Potentially Replacing Manual Labor and Workers

The American produce supply chain is a blue-collar industry. This industry hires tens of millions of hardworking people, offering them jobs that support their livelihood. Millions of these people work in this industry as their “last resort” job, due to their limited literacy skills and educational background. The “AI wave” has just begun in this industry, and various AI agents and AI-powered robots will soon be able to perform more and more of the manual labor jobs up and down the supply chain, potentially displacing these blue-collar workers. Moreover, a lot of workers in this industry do not have high education, so if their jobs are replaced by AI agents or AI-powered robots, they may not be able to find jobs elsewhere.

The solutions to both controversies above can actually be correlated and aligned together.

The solution to (II) above is to “make the pie bigger”, or make the American fresh produce industry bigger, to increase the volume of domestic produce production in the U.S., thus creating more job opportunities and domestic produce supply. The solution to (I) above is to “make other parts of the U.S., most notably the Midwest, the next California.” These two solutions can be aligned perfectly.

The Midwest states, Tennessee, Oregon, Washington, South Carolina, North Carolina, Georgia, and some other parts of the U.S., have highly fertile soils and ample water supply, offering the ideal conditions for growing organic, fresh produce. The Midwest in particular has nutrient-rich chernozem soil (a.k.a. black soil), which is ideal for organic farming. However, due to the ingrained, agricultural establishment that has been built over decades, as well as the challenges posed by the colder months, the Midwest is a food desert for fresh produce, and its lands have been used mostly for the production of “commodity plants,” such as corn, soybeans, and potatoes, for export. The Midwest relies on California, Mexico and South America for its supply of basic fresh produce, such as tomatoes and green vegetables. In the winter season, it can be hard for consumers in the Midwest to get access to fresh produce.

If these nutrient-rich lands of the Midwest could produce more fresh produce instead of commodity plants, with Midwestern farmers leveraging outdoor greenhouse technologies for the winter season, the Midwest would have great potential to become another produce powerhouse for fresh produce farming and supply in the U.S. Compared to California, the Midwest has greater potential for higher-margin, higher-profit organic farming. If the Midwest and other parts of the U.S. could scale up their fresh produce production, the overall size of the American fresh production supply chain would grow bigger, and this industry would be able to hire more blue-collar workers, neutralizing the impact of the “AI wave.” The production of higher-margin products (such as berries) compared to commodity plants (such as corn and potatoes) would improve the regional economy and revive the job market within and around the Midwest, and other parts of the United States. 

Already, Michigan has become well known for its production of cherries during the summer season. Planting additional crops like berries, tomatoes, and tender greens will similarly yield more profit than soybeans, corn, and potatoes.

It is time to revive the agriculture of the Midwest and other parts of the U.S., with higher-profit fresh produce farming, including organic produce farming.

Some other noteworthy challenges with farming fresh produce in the Midwest include the low population density, which may not offer sufficient local demand; the impact of the seasons (snow for 6 months or so of the year); and the fragility of fresh fruits and vegetables, compared to commodity plants. However, these challenges can be overcome with more robust (e.g. eCommerce-powered) distribution networks throughout the country; a more robust logistics network across the Midwest and the rest of the country; and outdoor greenhouse technologies.

Moreover, as essential businesses with gigantic market caps, the American fresh produce supply chain industry and American agriculture can foster great technology innovations, advancements and breakthroughs that other industries may not be able to achieve, especially in AI, vertical software, eCommerce and embedded hardware. For example, industry-specific AI agents and AI-powered robots, smart warehouses, smart cold chains, heavy-loaded drone technologies, outdoor greenhouse technologies, etc., all can push the American agriculture and American fresh produce supply chain industry to new and unprecedented levels of technology advancements and innovations.

Agriculture has helped California become the fourth largest economy the world. For example, berries produced in California sell very well globally, especially in the Middle East. Berries and other high margin fresh produce that could be produced in the Midwest could also sell very well not only in the U.S. but also in other parts of the world, including the Middle East.

Compared to other industries, the manual labor and jobs in the fresh produce supply chain industry and agriculture may be more sophisticated and harder to be replaced by AI agents, AI-powered robots, and related technologies. The scaling-up and re-balancing of the American fresh produce supply chain industry and American agriculture, through developing more powerhouses for fresh produce production and supply in the United States beyond just California, including regions such as the Midwest, will not only retain blue-collar workers working in these sectors, but also provide a safe harbor for blue-collar workers who could potentially be displaced from other industries, due to the AI wave sweeping across all industries in the United States, now and in the near future.