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It was disappointing to read the ad in The New York Times & Washington Post today from Tyson Food’s CEO that “the food supply chain is breaking.” The media of course ran with that (and not much else), consistent with its own obvious strategy to spread fear. Tyson and a few other companies have had serious issues with Wuhan Virus victims, and some plants – some 30 in total, if what I read is correct, have had to close temporarily. Other plants have had partial shutdowns. But as a food industry veteran of 23 years, let me assure you – our food supply chain, while stressed, is NOT breaking.
Oh, sure, some are more stressed than others, some pretty severely, especially if ingredients or products from China are in your supply chain. If you are part of the “foodservice” supply chain, you’re really stressed.
Some 40% of food is consumed outside the home, at least until the Chinese Communist Party virus hit, followed by governors shutting down restaurants, company cafeterias, and more across the country, except for carry-out. If you raise chickens to process into chicken nuggets for McDonald’s, for example, you may be faced with the humane slaughter of thousands of chicks – your market has almost disappeared, at least temporarily. Meanwhile, packaged food companies have seen dramatic increases – in some cases, as much as 50% – in sales of many products. If you do frozen peas, or chicken or beef, for a soup company, or grow commodities for snacks, guess what, you can’t grow and process those commodities fast enough. It largely depends on which supply chain you’re largely encamped. That is why you see reports of some shortages, yet also reports of potato farmers plowing under their crops (McDonald’s French fries, anyone?). Suppliers agile enough to shift production from foodservice to packaged foods have a good chance to survive this challenge.
The bottom line: we have no food shortage. We have supply chain challenges, some more severe than others. The China coronavirus has hit employees of these processing plants as much as any other business. It seems to have hit some meat, pork, and poultry facilities more than others, given the close proximity many of these employees work in these highly regulated facilities. Food manufacturing facilities, with a few exceptions, do not have employees in such close proximity. You aren’t seeing any shortage of products in stores just yet given the amount of product in cold storage, but some disruption is likely (probably not as bad as toilet paper, although that seems to have been addressed, at least based on what I saw today ago my local Wegmans).
So, rest assured. There is no need to rush to your local grocer to stockpile bacon. Our retail grocer and packaged food companies are responding really well. They’re heroes, IMHO. And as restaurants in at least a dozen states start, slowly, to return to business (some won’t), the foodservice supply chain will begin, slowly, to recover. Through all this, know that food industry supply chains are not “broken.” Fear not; shop with confidence.Published in