Food Banks:
Due to all the layoffs in America, food banks are seeing a surge in demand. CNN writes:
Millions of people newly unemployed mean food banks, food pantries and soup kitchens are seeing a flood of new clients appearing at their doors, just as supplies are dwindling because of growing demand from consumers stuck at home.
Food banks are reporting a 40% increase in demand, on average, said Katie Fitzgerald, chief operating office at Feeding America, a network of 200 food banks and 60,000 food pantries and meal programs nationwide. Some say they are seeing double to quadruple the number of people asking for help.
Axios has a post that shows photos taken at these food banks. One tweet at the end of the article is from Duquesne, PA. There are hundreds of cars waiting for food.
The fact that so many Americans are in need of food so quickly after America has shut down is scary to think about. And it will only grow as pantries inventories start to dwindle down. Yet, what if certain food items just start to disappear.
Food Packaging:
The Los Angeles Times wrote an article about the spike of coronavirus cases at meat plants:
As many as 50 people at a JBS SA beef facility in Colorado’s Weld County tested positive, adding to more than 160 cases at a Cargill Inc. meat-packaging plant in Pennsylvania, union officials said Friday. South Dakota Gov. Kristi Noem on Friday reported 190 cases at a Smithfield Foods Inc. pork facility, the Associated Press said. The Cargill and Smithfield plants are being closed, while JBS said it will continue operations.
Supply Chains
MSN via CNN wrote:
Food supply chains in developed economies are showing increased signs of strain as nationwide lockdowns designed to curb the spread of the coronavirus heap pressure on systems that had very little slack to begin with. The result is empty store shelves, and panicked buyers.
The transportation links that move food around the globe are being tested in unprecedented ways. Shipowners are struggling to change crews and move goods between ports. Airlines have grounded thousands of planes, slashing air freight capacity.
. . . Hiten Dodhia, a director of Saturnalia UK, a company that imports high-value fresh produce from Africa and South America and sells it to supermarkets in Europe, said there has been a huge hike in the price of air freight due to the grounding of so many passenger planes.
Lockdowns and curfews in countries including Zimbabwe, South Africa, Guatemala and Peru are restricting the movement of workers and causing labor shortages on farms, which will obstruct planting, harvesting and packaging, he told CNN Business.
Not mentioned in the article, but what I heard on the radio is the argument that Americans are shifting from getting food at restaurants to eating home cooked meals. To me, this makes some sense for why grocery stores shelves can't stay stocked or have to put restrictions on purchases. I've seen data such as this Zerohedge article that shows that seated diners took a nose dive in the first two weeks of March. Obviously, at this point, seated diners are down nearly 100%. I really doubt that these diners all switched to pick-up/delivery. Yes, there might be panicked buyers out there, but home cooking is another reason why store shelves are empty. This may require suppliers to simply shift their production from bulk supplies used by restaurants to manageable sizes for home food preparation. Of course, that does nothing for global transportation of food, but is more aligned with food inventories that are shipped within a country.
Dire Future Forecast:
Yahoo had the following dire internal government report:
The April 2 briefing warns that the task force had completed an analysis and there could be “commodity impacts if current PPE inventory is exhausted.” There would be shortages of milk within 24 hours and of fresh fruits and vegetables “within several days.” The document estimates that “meat, poultry, seafood, and processed eggs” would become scarce within a period of two to four weeks, while “dry goods and processed foods inventories” — that is, the non-perishables that are pantry staples — could become scarce “as soon as four weeks” after face masks and gloves run out across the food supply chain.
The document is a warning, and is not descriptive of the current situation. There are no signs of a food shortage across the nation.
Yes, the document is a warning and not a review of the current situation, but when you read above about COVID-19 infections at meat processing plans and global transportation issues it does make you think that this isn't just some theoretical thought process.
A New York Times opinion piece had these tidbits of data:
1. California produces a third of the nation’s vegetables and two-thirds of its fruits and nuts.
2. Making matters worse, the food industry relies on more than 200,000 guest workers each year. About 90 percent of the H-2A temporary visas these workers need are issued in Mexico, where American consulates have shut down. Last Thursday, the State Department made the visa process easier for returning workers, but prolonged delays in temporary help could further limit farm production in California.
As to point 1 and 2, this really sounds like a non-issue as the Sate Department is smoothing things out. Though returning workers may need to go through quarantine or there might need to be massive test kits produced so that migrant workers can be tested at the borders.
3. The United States relies on foreign suppliers for almost 20 percent of its food, including 80 percent of its seafood, with almost half of that coming from Asia, according to calculations by my firm. About half of our imported dairy products come from Europe, also hit hard by the virus. Almost 25 percent of America’s cheese comes from Italy, my firm estimates, the nation with the world’s highest death toll from Covid-19.
As to point 3: the piece mentions that half of our imported dairy products come from Europe, but it doesn't mention what percentage of our dairy products are imported versus produced internally. This doesn't provide any real context though it is interesting that 25% of our cheese comes from Italy. On the other hand, I suspect we also export cheese so this might be a situation where if supply lines do fall apart that Americans simply won't get the variety of cheese that they're used to getting, but will still have ample supply of cheese.
4. Because the United States no longer holds national grain reserves, significant parts of the food supply could be jeopardized should food protectionism accelerate. The United States does have some backstops. When the virus surged here, much of our everyday food and many staples — including chicken, beef, soybeans and dairy — were at or near their highest storage levels.
As to point 4: I wonder if the United States is going to shift policy on grain reserves.
To me, a scary point is the idea of food inflation hitting the globe. Perhaps the United States and other developed nations can escape the impacts of food inflation, but what about developing nations in Africa, Asia and the Middle East? What sort of geo-political fallout could result?
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