University of Georgia

Why are the grocery store shelves empty?

Agricultural economist explains COVID-19 impact on food markets
13-Apr-2020 11:50 AM EDT, by University of Georgia

While all industries have been seriously affected by the COVID-19 pandemic, food and agriculture have been among the hardest hit segments of the U.S. economy. The primary reason lies in the composition of household food expenditures, said Gopi Munisamy, a professor of agricultural and applied economics in the University of Georgia’s College of Agricultural and Environmental Sciences

The impacts of the pandemic appear to vary by commodity based on two critical issues: perishability and labor use. Perishables like fruits, vegetables and milk are among the hardest hit. Many of these industries also depend on labor for growing and harvesting.

There is no immediate shortage of food in the U.S., according to the U.S. Department of Agriculture (USDA), however the current demand for items such as grocery-size products and on-demand delivery is greater than what is in abundant supply: bulk, large-sized products and processed shipments to restaurants that remain open.

This demand-supply mismatch appears to mimic anecdotal evidence of price spikes and empty store shelves on the consumer side and the collapse of demand and dumping of food on the farm side, with a range of linked effects in the middle.  

Wholesale food demand reduced, supply chain shifts

Households spent $1.7 trillion on food in 2018, 54% of which was spent on food away from home at restaurants, bars, sports venues and other establishments, according to the USDA Economic Research Service. A dramatic drop in foot traffic at all types of restaurants began in the second week of March.

Supermarkets and grocery outlets have also experienced a significant reduction in foot traffic, but delivery and on-demand services have been strained by the sudden surge in demand from people under stay-at-home orders and social distancing guidelines, which includes nearly 90% of the U.S. population.

With the drastic fall in food demand away from home, multiple forces were unleashed rapidly, causing ripples that stretched farther into every food and agricultural commodity.

First, the supply chain serving food service industries did not have many buyers. A case in point is cheese, where the major supplier, Wisconsin, found two-thirds of its demand fall to near zero within a week or two.

Second, social distancing guidelines and shuttered non-essential businesses affected supply chains serving both food services and retail grocers.

The results include a significant slowdown in the operations of processing and distribution, shortage of workers at farm, processing and distribution (trucking) facilities, and a shortage of cleaning and sanitizing supplies. Compounding these effects are the resources spent in contact tracing and quarantine if/when a worker tested positive for COVID-19.

Third is the urgent need to transition products run through food services into those that consumers need at the grocery store. For example, restaurants usually bought diced vegetables, like onions, in 60-pound bags, but consumers at grocery stores usually buy 3- to 5-pound bags of unpeeled onions. Also, large cheese blocks sold to food services, which generally have sizable storage space, cannot be chopped overnight into packs of ounces and pounds to sell at grocery stores.

Trade and other factors

Imports of food have declined due to reduction in air and shipping traffic between countries and regionally within countries. Nearly 13% of food consumed in the U.S. comes from other countries — primarily horticultural products, livestock and edible oils.

Preliminary data shows that the countries first affected by COVID-19 exported and imported less food in January and February 2020 relative to the corresponding period in 2019, according to recent reports by SafetyChain, a food and beverage management system.

In addition, all of the above happened in the aftermath of several natural disasters and a trade war over the last two years.

Potential solutions

What can be done by private and public sectors, hopefully in a partnership, to offset these challenges? An obvious option is storage where applicable to mitigate price spikes, avoid empty store shelves and prevent collapse of demand. However, not all commodities are storable.

Some experts have recommended government purchases of perishables and transfer to regions and segments of the population where they are most needed. It is not clear that the logistics of such an operation can be pulled off within the short time period needed to accommodate farms and markets.

The stimulus measures to keep businesses in operation — including loans, grants, unemployment insurance and SNAP benefits — alleviate the problem to some extent, but their durability has already been questioned. Policy and other measures will be an ongoing discussion.

Also, government regulations are somewhat eased to help in the transition of demand from food service to grocery outlets. Nonetheless, the food and agriculture sectors need more attention, especially the most vulnerable segments, likely in the form of a combination of the above tools employed in greater intensity.

Writer/Contact: Gopi Munisamy, M.Gopinath@uga.edu

(The author is a professor of agricultural and applied economics in the University of Georgia’s College of Agricultural and Environmental Sciences. Chen Zhen, associate professor in the department of agricultural and applied economics, contributed to this story. )

 




Filters close

Showing results

110 of 4188
Released: 2-Dec-2020 6:05 PM EST
How Caregivers of People with Dementia Can Navigate Holidays During the Pandemic
Rutgers University-New Brunswick

As COVID-19 cases increase across the nation, many caregivers are trying to navigate the holidays for relatives with dementia or Alzheimer’s disease. The Centers for Disease Control and Prevention suggests that people not travel to limit the potential spread of the coronavirus. Mary Catherine Lundquist, program director of Care2Caregivers, a peer counseling helpline (800-424-2494) for caregivers of people with dementia and Alzheimer’s disease operated by Rutgers Behavioral Health Care, discusses how families can stay connected with their loved ones.

Released: 2-Dec-2020 3:50 PM EST
Tip Sheet: Celebrate holidays safely, COVID-19 vaccines, challenges in HIV vaccine trials — and new insights on evolution
Fred Hutchinson Cancer Research Center

SEATTLE – Dec. 2, 2020 – Below are summaries of recent Fred Hutch research findings and other news with links for additional background and media contacts.If you’re following the American Society of Hematology’s annual meeting (virtual, Dec. 5-8), see our media tip sheet highlighting Fred Hutch presentations and activities, including those by current ASH president Dr.

Newswise: “This is how we can help” – Couple shares their story as COVID-19 clinical trial participants
Released: 2-Dec-2020 2:35 PM EST
“This is how we can help” – Couple shares their story as COVID-19 clinical trial participants
University of Texas Health Science Center at Houston

“I don’t feel so great,” my husband, Brandon, said to me one Saturday afternoon – the last thing I wanted to hear after spending the last seven months tuned into COVID-19 media coverage. Knowing a few of his co-workers had recently tested positive for the virus, we didn’t wait to secure an appointment for a rapid test. When he called me an hour later to tell me he has tested positive, my heart sank.

Released: 2-Dec-2020 2:35 PM EST
IPC Statement On SARS-CoV-2 Vaccines And Psoriasis
International Psoriasis Council

The SARS-CoV-2 pandemic continues to have a considerable impact on the provision of appropriate care to people with psoriasis.

Newswise: 250245_web.jpg
Released: 2-Dec-2020 2:05 PM EST
Differences in immunity and blood vessels likely protect children from severe COVID-19
Murdoch Childrens Research Institute

Differences in the immune systems and better blood vessel health were among the factors protecting children from severe COVID-19, according to a new review.

Newswise: Telemedicine Use During COVID-19 Shows Access Disparity Among Head and Neck Cancer Patients
Released: 2-Dec-2020 1:30 PM EST
Telemedicine Use During COVID-19 Shows Access Disparity Among Head and Neck Cancer Patients
Henry Ford Health System

Retrospective research by Henry Ford otolaryngologists found telemedicine use disparity among head and neck cancer patients during start of COVID-19 pandemic.

Released: 2-Dec-2020 1:15 PM EST
Researchers determine how the SARS-CoV-2 virus hijacks and rapidly causes damage to human lung cells
Boston University School of Medicine

In a multi-group collaborative involving the National Emerging Infectious Disease Laboratories (NEIDL), the Center for Regenerative Medicine (CReM), and the Center for Network Systems Biology (CNSB), scientists have reported the first map of the molecular responses of human lung cells to infection by SARS-CoV-2.

Released: 2-Dec-2020 11:45 AM EST
Delivering Pandemic Vaccine Poses Extraordinary Logistical Challenges
Johns Hopkins University Carey Business School

Associate Professor Tinglong Dai of the Johns Hopkins Carey Business School, an expert in health care industry operations management and business analytics, examines the daunting process of administering a COVID-19 vaccine globally.

Released: 2-Dec-2020 7:40 AM EST
No country ‘immune’ to COVID-19 economic shock, but Asian nations will bounce back faster
University of Cambridge

Study uses forty years of quarterly data to project a lengthy global recession from COVID-19 – knocking 3% off world GDP by end of next year. The manufacturing bases of China and East Asia are predicted to fare better than most Western economies.


Showing results

110 of 4188

close
0.90866