It’s the food supply chain, not hoarding - During the last month, I have heard several comments along the lines of, “I went to the grocery store to buy chicken and there wasn’t any. Someone is hoarding all of the chicken, who’s doing that?” or “I tried to have my groceries delivered and there wasn’t any meat, that delivery mechanism is terrible.” It’s really much more complicated – it’s not the fault of any hoarders or the delivery business, rather, the log jam is a bit further up the supply chain. We are dealing with the delicate balance between agricultural economics and public health needs during a pandemic.
There are two supply chains - There are two separate supply chains - one for food going to grocery stores with food intended for direct consumer purchase and one for food going to schools, restaurants, bowling alleys, movie theaters, workplace cafeterias, etc. with food that is intended for preparation and then resale. Those are not the same types of goods and these supply chains are not interchangeable and that is part of the disruption we saw in the early days of the pandemic.
USDA changed some rules - A pallet of eggs is not something consumers go to the store and purchase, but it is something that is typically purchased by restaurants, universities, schools, etc. With most of these places closed, or ordering fewer supplies, these eggs are going to waste. There are rules in place by the USDA Agricultural Marketing Service that say you cannot sell your food twice – you cannot buy food and then resell it to someone else. On March 23, the USDA relaxed some of those regulations, allowing for redistribution of eggs, meat and produce. While this is helpful, it still doesn’t address some of the supply issues further up the chain.
Food production is compromised - In addition to this mismatched supply chain, food production is labor intensive from the field to the processing plant and the human toll in our meat and grain processing facilities has been substantial and poses a risk to the supply chain. Smithfield foods, one of the major pork processing industries in the U.S., has had to shut down several plants after their workers fell ill. The first case of COVID-19 among workers at a plant in Sioux Falls was announced on March 26, but the plant did not close until April 15, and by that time there were 644 confirmed cases. Now, there are more than 900 confirmed cases at just that one plant*. These workers spend long hours standing in a production line, with less than a foot from other workers on either side of them. And it’s not just the Smithfield plants that are affected, and it’s not just the pork industry, it’s all U.S. meats in general.
Of the nation’s 2,700 slaughterhouses, 13 meatpacking and food processing plants ceased operations over the past two months. On April 28, President Trump invoked the Defense Production Act to force plants that had shut down to reopen amid concerns among America’s meat facilities and the unions and activists who want to protect workers in a pandemic.
Distribution networks and stores are compromised too - At the consumer level, grocery store workers are also suffering. In the U.S., there are more than 3,000 confirmed cases of COVID-19 among grocery store workers, and at least 41 deaths*. And this is happening despite all the regulations and new practices that have been put in place to try and protect them – the daily temperature checks, social distancing guidelines, protected entrance and checkout lanes, one-way aisles, shields around the checkout area, new bagging protocols, etc. Eventually, prices will rise and we will be facing a shortage. In addition, foreign workers have been extremely important in U.S. agriculture. On average, we have 250,000 workers per year coming into the U.S. to help pick produce. Now, they have a harder time coming into the states and the number of these workers has rapidly declined.
New distribution methods - Grocery stores and restaurants are increasingly moving to just drive through, curbside pickup and delivery but this is still relatively small scale and could not be ramped up quickly enough to cover all consumer needs. Customers can also buy some groceries directly from restaurants thanks to relaxed USDA regulations, but these are short term solutions.
Medicine and science is the best solution – While we should continue to explore ways to improve the food distribution system both in the short- and long-terms, the real long-term solution is medicine. We will not be able to fully re-open, at least in the near future, until we have some treatments, wide scale testing and contact tracing. On average, an infected person might infect six other people, and that means a large portion of our population has to be vaccinated or otherwise immune in order to achieve herd immunity and for everything to be open as it was in the past. What that means is we need 260 million people to receive the vaccine when it becomes available.
*Data as of April 23, 2020
RSS