Is there a food supply shortage in America?
According to the USDA there is no food shortage to worry about however, there is a problem with distribution. Companies that produce and deliver food to consumers and businesses face risks and uncertainties across all steps in the value chain. If concerns related to the COVID-19 pandemic persist, it may be challenging to find workers as people avoid close-quarters activities and limit their own exposure risk. Since worker wages are already a significant cost factor for farms, the pandemic may further strain farm economics. Forecasts are uncertain, for example, about the duration of pandemic-related demand shifts, the recovery of the food-service economy, and the timeline of returning to full employment.
Recent COVID-19 infections at meat-processor plants have raised the possibility of mass closures of plants. 18 processing plants in the United States have already been closed, affecting more than a third of the country’s beef and pork supply. Companies are also increasing their e-commerce presence by going direct to consumer, given the spike in e-commerce purchases during the COVID-19 crisis.
Depending on how well the virus is contained and the level of any recurrences, it could take between one and four years for food service to recover. Consumers are facing a rise in cost to food and supplies. Many retailers, claiming a shortage of distribution are stockpiling goods in order to keep their shelves full, however, stockpiling can also worsen shortages. The retail and distributing companies are stockpiling about 20% to 25% more groceries and the cost is passed onto the consumers in a price hike of goods. Manufacturers such as General Mills, Campbell Soup, and Smuckers are among those raising prices to offset higher costs. Meat and produce prices are also rising, and retailers are bracing for more increases until the end of the year. Gas prices are soaring which is also a large factor in the cost of all goods in America. Unfortunately, we see no downturn but as far as a food shortage in the country that is not the case.
