By Rachel-Paige Casey
As panic seized the nation, most Americans rushed to their local grocery store and saw, perhaps for the first time, bare shelves. Despite the immediate fear of food shortages, the empty shelves were the result of a suddenly overloaded food supply chain that struggled to replenish inventories at rate commensurate to the grocery (and toilet paper) stockpiling. The US boasts an exceptionally efficient food production system; indeed, 40% of all food produced and grown within our borders is never eaten. As logistics networks hustle to quicken supply chains to grocers and other food retailers, a question lingers: Will the United States run out of food if the pandemic and its countermeasures persist much longer?
To assuage any panic, the outlook for domestic food production – namely in cereals, meat, and dairy – remains sufficient despite reduced production. A recent announcement by Robert Johansson, USDA Chief Economist in Food and Nutrition, confirms that the United States possesses sufficient quantities of food to feed our population and maintain much of its exports. Anxiety averted and assuaged, patience is needed as our food value and supply chains adapt to abrupt changes in demand. Additionally, the agricultural and food processing sectors need time to adjust operations to increase safety measures (for its workers and customers) and to fulfill changes in consumer preferences.
American food culture is comprised heavily of foods that have undergone some form, or forms, of further processing so that they are ready to drink, eat, or heat. A 2018 study found that during the 2007-12 period, nearly 60% of caloriesconsumed in the US were from ultra-processed foods such as frozen meals, Coke, hot dogs, cold cuts, fast food, packaged cookies and cakes, and salty snacks. Ultra-processed foods and drinks are packaged formulations derived from multiple industrial processes that introduce added sugar, preservatives, artificial flavors, and colors to the product. As consumers face losses or uncertainties with their income, premium offerings – like fresh deli meats instead of prepackaged cold cuts or fresh produce instead of frozen or canned – are falling out of favor. Food companies will have to respond to changes in consumer behavior, likely by offering a lower variety of specialized and differentiated products. In addition to changes in demand and preferences, food companies are experiencing closures that limit, at least temporarily, production and processing capacities for business-as-usual, but also their capacity to make quick enhancements to their protocols for the safety of their personnel and goods.
In the wake of COVID-19, dozens of processing plants are temporarily shutting down as the virus pops up among their workers. Throughout April, slaughterhouse and meat processing plants closures have been announced by JBS, Tyson Foods, Hormel, Cargill, and Smithfield Foods. The shuttered Smithfield plant in Sioux Falls, South Dakota handles about 5% of US pork production and JBS is considered the world’s top meat company. These closures are becoming more widespread and expected shut down periods are expanding, slowing meat production and processing for processed foods that are practically staples of an American household. Beyond closures due to COVID-19 cases, processing plants are adjusting their production goals to match adjustments in consumer demand for certain products.
According to USDA Economic Research Service (ERS), in 2018, about half of household food expenditures are spent on food away from home: full-service restaurants, fast food, bars, hotels, schools, and entertainment venues. The shelter-in-place and other social distancing mandates have forced many, if not most, food businesses to either shut down or limit services to take out and delivery. Though this creates a glut of economic concerns, it also liberates some commercial food products for transition to retailers like grocery stores; however, this transition requires time for preparation. Restaurants purchase food ingredients for their dishes in larger amounts than what households typically demand. These items will have to be redirected for packaging and proportioning better suited for grocery store shoppers. Some restaurants are becoming retailers themselves by packaging products like flour in small packs for sale to customers hunting for their own ingredients.
According to USDA ERS, by 2018, about half of household food expenditures were spent on food away from home purchased from businesses like restaurants and entertainment venues. As ultra-processed foods become less available, restaurants and other venues remain closed, and households aim to conserve income, Americans will find themselves buying more ingredients and cooking more meals at home. Though this seems like an easy fix, not everyone has access to a full-service kitchen with an oven, stovetop. In 2017, only 77% of US households had a range for traditional cooking, while 92% own a microwave for heating up processed foods.
Americans generally enjoy a spectacular variety of food items from different brands with differentiated products: dozens of ice cream flavors, gluten-free alternatives, dairy-free alternatives, a cornucopia of nut butters, and a plethora of frozen meals. The quartet of reorganizing the food supply chain, enhancing the food system with pandemic safety measures, changes in consumer demand and preferences for food items, and reduced food production and processing with COVID-19 outbreaks in plant workforces is leaving our grocery store shelves a little sparse. Though the US should not fear a famine, consumers may have to resolve themselves to limited food offerings while we weather the storm of COVID-19.