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The Retired Investor: CSAs & Local Farms Make a Comeback

By Bill Schmick
iBerkshires columnist
While much of the nation's farming industry has been decimated by the global pandemic, here in the U.S. one tiny segment of the agricultural market is booming — the CSA.
 
The line at my local Community Supported Agriculture (CSA) pickup station was short this week. As usual, everyone wore masks and waited in line, 6 feet apart. One by one, customers stuffed their carry bags full of lettuce, radishes, kale, cucumbers, tomatoes and whatever else nature's bounty and Kate, our farmer, had planted this season. CSAs charge a seasonal, or sometimes yearly membership fee in exchange, you receive weekly boxes, or bags of fresh veggies, fruits, and more. My membership cost more than $400 this year and I will say it was well worth it.
 
Evidently, I am not the only one who feels this way. Across the country, memberships in CSAs are booming, even as the bigger farms have been forced to slaughter livestock, abort piglets, crush food and destroy perfectly healthy crops for lack of distribution and pandemic-struck supply lines. Some CSAs have had to limit memberships. Others are finding it difficult to handle the demand and hire workers to plant, maintain, and harvest their crops. 
 
A couple of months ago, when grocery stores were selling out of everything and food banks were being overwhelmed, local farmers, who normally supplied produce to restaurants, schools and other commercial businesses pivoted to a new business model by focusing on the grocery store and supermarket consumer in their local areas. 
 
Some farmers actually had already established a "close-loop" community food system where they could offer everything from meat, pork, chicken, baked goods, eggs, and other dairy products, as well as vegetables and some fruit. And what they did not produce themselves, they established business relationships with other farmers to broaden their product lines.
 
In the past, CSAs have survived, but not flourished, as a kind of niche market. Most members were either organic-only advocates, or those who try and support local businesses whenever they can.
 
In my case, I originally started buying at my local CSA a few years ago for health reasons. I liked the fact that my produce was grown organically without chemicals, preservatives, or coloration. The produce also tasted a heck of a lot better. I also liked the ambiance of visiting the farm, trading comments on the weather with the local farmer, and seeing some of my neighbors. So, I guess I qualify in both respects.
 
Fast-forward to this age of coronavirus. Safety has suddenly become a big issue for me. Going to the local supermarket today feels a little like navigating an obstacle course: "have the carts been cleaned, where are the hand sanitizers, which way do the aisles run, where's his mask, is she going to crowd me, should I self-checkout, or take a chance with a live cashier?" 
 
If I sound paranoid, it is because I am. At my CSA, things are more manageable. I feel I have more control of my environment. No one sneezes or coughs on the veggies, or handles them. That is worth a lot to me.
 
 The question I ask is: whether this short-term demand for locally-produced CSA produce last, or will it die on the vine as soon as a COVID-19 vaccine is developed?
 
My hope is that once you try it, you'll like it. It might be a bit more expensive than shopping at the local supermarket, but believe me, it is worth every extra penny. 
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 

     

The Retired Investor: Mask Mania Helps Small Business

By Bill Schmick
iBerkshires columnist
There was a time, when obtaining a protective mask to combat the spread of the coronavirus was almost impossible. That time has passed. Today, as more than half the country requires citizens to wear them, masks have become essential and almost a fashion statement.
 
Back in March of this year, as COVID-19 raged across the country, first-responders were desperate for all kinds of protective gear. In the Berkshires, where I sit, a cottage industry developed. Volunteers on home sewing machines were producing masks and delivering them to the local hospitals. Various small businesses around the nation were also producing masks. Originally, their motives were purely altruistic, simply to help out a nation in need. 
 
At the time, despite the fact that these masks were not all that effective in protecting nurses and other medical personnel from the coronavirus, it was the thought that counted. For the population at large, these cloth masks were better than nothing. As time went by, some small businesses began to realize that the pandemic was here to stay, at least during the next several months. It would be no flash in the pan. All across the country, beleaguered small-business owners began to produce masks with the help of 3-D printing, as well as good old-fashioned human labor. 
 
In the meantime, the large companies that produce masks for the medical community revved up production. For the most part, most of us no longer have a problem obtaining those medical masks in pale blue or white that one normally sees in hospitals. While these masks are touted to be the best, as far as preventing the spread of viruses, they leave much to be desired.
 
I found, for example, that many of the traditional medical masks happen to fog up my glasses when I go into the supermarket. Picture me, groping around for a shopping cart, while trying to unfog my glasses, so I can see. I expect that problem might get worse as the cold weather hits. Then there is the smart phone issue. Facial recognition doesn't work well when I wear a mask, so I am faced with either removing the mask, or tapping in my cell phone password in the middle of whatever I am doing.
 
It seems to me that it is only a matter of time before some enterprising small-business person figures out a solution to this and other shortcomings of wearing a mask. They already sell masks that seem to solve the fogging problem. New materials and designs are also helping with the fit and comfort. Many of the new masks are also wash and wear, since they are now in daily use in so many locales as well as an essential health item. 
 
Masks have also become somewhat of a fashion statement; in the same way that eyeglasses come in all shapes, sizes and designs, masks are coming of age. If you surf the internet, or browse through the pages on Facebook, it seems that every other ad is hawking a different face mask. You can pick from dozens of colors, designs, and fashion motifs. Paisley, polka dots, stripes, and circles with art motifs, images of your favorite pets, sports teams, cities and states. Almost all the photos in the media today feature celebrities, politicians and other personalities sporting all kinds of colorful or inspirational masks. Many masks are now statements — Trump or Biden masks, American flag masks, BLM masks, etc. In fact, I just ordered a couple of Halloween masks just for fun.
 
Etsy, the online marketplace for crafters and mom-and-pop businesses, have identified face masks as one of their hottest new product lines. In their latest quarter, Etsy management said that there were 110,000 Etsy vendors in their latest quarter that sold a total of 29 million face masks worth $346 million. That represented 14 percent of all sales in that period for Etsy.
 
Some analysts estimate we could see $1 billion to as much as $9 billion in sales by next year. That assumes that roughly half of the U.S. population will be wearing a reusable mask by this time next year. With those kinds of forecasts, it is no wonder that some of the largest retailers such as Walmart, Target and Gap, have decided to join the trend. However, Asian importers, who can underprice American companies easily, are already starting to steal away market share.
 
Whether or not face masks will remain a new item in the American wardrobe depends on the virus. If a vaccine is found that eradicates the coronavirus, then all bets are off. But in the meantime, the masks have been a Godsend for some of our struggling small businesses.  
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 

 

     

The Retired Investor: The Drive-In Returns

By Bill Schmick
iBerkshires columnist
There is not much good one can say about the coronavirus, but if one looks hard enough there are a few silver linings. One of which is the revival of the drive-in theater.
 
Cinemas have been closed for months, thanks to COVID-19, and are only now re-opening to limited audiences. In the meantime, consumers have been surviving on streaming movies and television series for entertainment. However, one bright spot for those who can take advantage of it has been the drive-in theater. 
 
It is well-suited for a country in pandemic, and ready made for social distancing. At many drive-ins, autos are parked at least 6 feet apart. Ticket-holders do not need to wear a mask as long as they stay in their cars. If you want snacks, your food is brought to you. In a society that is just aching for a night out, the drive-in offers family entertainment in a safe, responsible setting. What more could you want?
 
Usually, I'm not one for nostalgia, but I make an exception when it comes to drive-ins. The drive-in is a uniquely American invention first established in Camden, N.J., back in 1933. It was the brainchild of the manager of a sales parts store, Richard Hollingshead. Over the next three decades, the concept caught on, driven also by the invention of audio speaker technology for in-car use in 1941.
 
By the time I was 10 years old, back in 1958, drive-in theaters hit their peak with more than 4,000 locations in the U.S. Living in Pennsylvania, it became a staple of my family's weekend entertainment. In the Sixties, when I became old enough to drive, it was also my favorite date-night activity. It sparked some of my steamiest teen-age romances.
 
Since then, the number of drive-in theaters has dropped by 90 percent. A combination of factors caused the demise of my favorite pasttime. The VCR, DVDs, and finally the advent of streaming took over as consumers could increasingly watch the same movie entertainment from their couches at home. If you felt like going out, the invention of giant multiplexes in every shopping mall was an irresistible draw for shopping, dinner, and then a movie. Finally, rising land costs made selling properties for development much more profitable than charging tickets to dwindling crowds at the neighborhood drive-in.
 
Today, according to the United Drive-in Theatre Owners Association (UDITOA), there are only about 300 of these institutions left, with my home state, Pennsylvania, and New York sharing the top spots with 28 each. The fact that owners are showing the movies of yesteryear, like "Harry Potter," "Goonies," and "Jurassic Park" just adds to the nostalgia.
 
Could drive-ins, ex-pandemic (if there will be such a thing), still survive? Some companies are betting they could. Walmart, for example, intends to transform 160 of its car parks into drive-in theaters in partnership with Robert De Niro's Tribeca Enterprises. Drive-ins could provide a new use for America's brick and mortar mall space. Similar efforts are underway in South Korea and Germany where drive-ins have become popular. Drive-ins may have some good things going for them as well.
 
Indoor movie theaters, for example, could transform their parking lots into outdoor venues. Technology, in the form of FM and Bluetooth transmissions can easily convert into stereo sound through any car speaker system. In addition, today's high-quality HD and 4K movies would work well projected on the giant drive-in screens. 
 
From a marketing point of view, enterprising owners could bring back the double, or even triple features to moviegoers. Marathon movie nights might also be popular. Retro and nostalgia fans, as well as those too young to remember all the Harry Potter, Star Wars, or Indiana Jones movies, might be popular. 
 
I remember that at some point, drive-ins also featured live entertainment, bands, and even playgrounds and petting zoos. Who knows what the entrepreneurs of the future might come up with? The point is that times are changing and sometimes we might want to look to the past for answers to today's issues. I for one am hopeful that drive-ins do make a comeback. 
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 

 

     

The Retired Investor: Home Is Where the Hammer Is

By Bill Schmick
iBerkshires columnist
Remember those promises of how you were going to finish that deck, remodel the kitchen, or fix that faucet? Well, this year, many Americans finally stopped procrastinating. 
 
It appears that there is at least one silver lining in this pandemic: a boom in home improvements. Take my brother-in-law, for example. He lives in a Maryland suburb with his wife and extended family, which consists of three adult children, plus a bunch of grandchildren. Faced with working from home, the entire family embarked on a do-over to their back yard. During the last few months, they installed an above-ground pool, built a gazebo, and purchased outdoor patio furniture. Since then, the back yard has become the center for family recreation and entertainment.
 
Travel up the coast to my daughter's home on the Long Island Sound, where DJ "Ming," (who also happens to be my son-in-law, Aaron) converted the family's small guest house into his recording studio. He also built, with the help of my daughter and their young children, an outdoor vegetable garden, replaced the kitchen faucets, and re-wired and laid new internet cable throughout the house and his new studio.
 
These are just two examples of the do-it yourself frenzy that has occupied millions of Americans over the past several months. Is it any wonder that Home Depot just reported that their same-store sales have exploded, spiking 25 percent? Lowes reported similar results with comparable store sales surging 35 percent.
 
Families with time on their hands and stuck at home finally tackled those long-delayed, home improvement projects, either by themselves or by hiring contractors. Demand for hardware, paint, tools, lawns and garden goods, and treated lumber have gone through the roof. It seems that over the last few months, Americans spent their time hammering nails, according to a recent survey from Porch.com, a remodeling platform. Their findings indicated that three quarters of those surveyed said they had done some kind of home improvement project during the pandemic. Homeowners with time on their hands began to update or reconfigure both indoor and outdoor spaces for exercise, work, school and recreation. Underlying this trend is the assumption that the coronavirus may be with us for some time to come. 
 
In addition to home improvements, more employees are also working from home. Like me, they may have started working remotely on their kitchen counter or dining room table, but for most that has become unmanageable. As a result, the demand for home office space has also increased. 
 
Prior to the pandemic, less than half of all homes boasted a remote working space. And yet, a survey conducted by YouGov, in partnership with USA Today and LinkedIn, found that 74 percent of professionals age 18 to 74 said they were now working from home.  What most have discovered is that establishing a new home office is both time-consuming and expensive. Upgrading existing space, basement waterproofing, attic or bedroom refinishing, in addition to office furniture and the need to wire (or re-wire) and install internet cable, can break a budget very quickly.
 
Whether or not the home improvement phase subsides in the second half of the year will depend largely on the virus. During the winter months, the outdoor projects will most certainly taper off. But if home sales rebound (and they look like they may), then spending on remodeling, especially bathrooms and kitchens, may continue to gain for a few more months. 
 
Of course, the wild card is how long the pandemic will last, and what additional impact it will have on the overall economy and employment. Analysts expect that without a new stimulus bill to cushion the blow, most consumers will temper their spending overall, until they see which way the wind blows. If so, at least we can all take some satisfaction in a job well done.
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 
     

The Retired Investor: Tensions With China May Heat Up

By Bill Schmick
iBerkshires columnist
On Aug. 15, U.S. Trade Representative Robert Lighthizer and Chinese Premier Vice President Liu He, will be facing off once again; this time to review the Phase One trade deal inked on Feb. 15. Neither side is especially happy with progress so far.
 
From the U.S. point of view, China has not lived up to its agreement to buy $200 billion of U.S. goods over their 2017 purchasing level. Chinese imports of agricultural products are actually lower than the 2017 level, which is about half the level needed to meet their promised target of $36.5 billion. The energy purchases they promised have also fallen woefully short of their commitment. Only 5 percent of their $25.3 billion in promised purchases has actually happened.
 
From the Chinese point of view, the level of China-bashing that is going on as part of the election campaign from both parties is an on-going deterrent from honoring their agreement. In addition, the Chinese will argue that the world has changed since the February agreement. The collapse and rebound in oil prices, combined with the onset of the pandemic, has thoroughly upended trade relations not just between the U.S. and China but throughout the globe. 
 
The Chinese have a point, but my suspicion is that U.S. negotiators will be in no mood to forgive and forget (at least not publicly). Besides, we have bigger fish to fry at the moment. The Trump Administration continues to blame the coronavirus outbreak on the Chinese government, hinting that the outbreak might have been on purpose. While it is true that the virus originated in Wuhan, China, there is no evidence that the Chinese government was involved in its origination or spread. But facts have never stopped your president from voicing his opinions.
 
The security crackdown and new legislation by China on limiting Honk Kong democratic freedoms has also earned China condemnation and sanctions from both sides of the political aisle here at home. There has also been a tit-for-tat shutting of consulates in both countries as a result of U.S. accusations that the Chinese consulate in Houston was a hotbed of spying.  
 
But the latest flare-up involves TikTok, a Chinese-owned video platform loved by more than 50 percent of America's teens. ByteDance, the app's parent company, has been notified by the White House that it has 45 days to reach a deal to sell its U.S. business. This follows on the heels of a growing list of Chinese tech companies that have been blacklisted by the Trump Administration. These actions have created a furor across Asia and within China.
 
The Chinese accuse the United States of forcing a fire sale of TikTok by slapping on this a time limit, while arguing that America's growing tech war with China is violating international rules of trade. To make matters worse for the Chinese, U.S. Secretary of State, Mike Pompeo, warned that "countless Chinese apps" may be in for similar treatment in the coming days. 
 
I believe that while China may have been willing to negotiate trade imbalances with the U.S. over the last four years, they have dug in their heels when it came to modifying intellectual property rights and technology transfers. The U.S.'s willingness to wait, and negotiate in good faith appears, at this juncture, to have been an unworkable strategy.  
 
I suspect that our newfound willingness to wage a tech war as a way of bringing China to the table, where serious discussions can begin in these areas, will not be taken lightly. While necessary, we should not expect China to simply lie down and take it. I expect a strong response in the immediate future, and so should you. Be prepared.
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 

     
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