The world has a lot of food, just not where it is needed

Despite the stockpiles still standing, the grocery stores are witnessing a situation where the shelves are quickly empty. The crazy buying behavior keeps retailers and suppliers from catching up with an unprecedented rate of demand growth. An example of the restriction is that only a certain amount of trucks can be loaded at the warehouse each time to bring chicken, or ice cream, or toilet paper to the place of sale for those who want to buy.

Other restrictions, such as the time it takes to fill shelves or load carts. Another anomaly caused by the disease outbreak in China: The fewer goods shipped out of Asia, the more containers are stuck here and there are not enough empty containers in countries like Canada to ship. food to the international market. “This is a complex network of relationships that we often don't think are part of the food supply chain: drivers, wagons, shipping, farm workers,” Jayson said. Lusk, dean of agricultural economics at Purdue University. “There are too many links and the whole process is more vulnerable than we think.”

That was just the beginning of the problem. As the virus spread and the number of infections increased, there seemed to be countless ways to try the food system in the near future. It is possible that labor shortages occur because they are forced to stay at home because of illness or are related to an infected person. Because schools are closed, factories can reduce production because parents prioritize caring for their children. Migrant labor restrictions are on the rise throughout the world, making it difficult for workers who are critical to harvesting tomatoes or slaughtering animals to access work. Port closures and trade restrictions can lead to persistent disruptions in the flow of finished goods and raw materials. “We do not see this supply shock from the availability of food,” said Abdolreza Abbassian, senior economist at FAO. “That was a supply shock originating from logistics. This is a very new issue and very difficult to predict. Current instability is the biggest threat ”.

Farmers' unions, retailers and drivers in countries such as Brazil, the US and France are ringing alarms about possible serious disruptions stemming from blockade and quarantine, along with the possibility of labor shortage. Authorities in Australia, Germany and Kazakhstan are concerned about virus strains amid the mad shopping environment and logistics difficulties. Such a crisis could eventually lead to a real shortage, starting with vegetables and then with staple foods, ”said German Agriculture Minister Julia Kloeckner.

For consumers, the impact of the disease will vary widely, depending on where they live. In the US, the impact could be your preferred fries brand, but basic foods like rice or bread are still available. In countries that depend on food imports, the situation may be more severe. Everywhere in the world, you'll probably have to pay more to buy the same amount of food a few months ago or even a few weeks ago. “It is inevitable that food prices will rise,” said Adnan Durrani, executive director of frozen food company Saffron Road, with 30-year experience in the food industry. “This is a crisis I've never seen. If the situation continues for 2 more months or more, the food supply tension will become more apparent. ”

At Saffron Road, which specializes in appetizers like chicken masala and vegetable pad Thai, Durrani is ramping up production in two months to fill stockpiles in anticipation of a booming demand for viruses. But even if he had never forecast sales to explode as they had witnessed in the past few weeks, when Americans had been buying up stockpiled food and a series of grocery stores were running out. Sales at major retailers double in many cases.

At the same time, the US Department of Agriculture has safety inspections at all production facilities. Workplace temperature checks take place daily to ensure that symptom recognition is not available. “We have not suffered any consequences but may have an impact to some extent,” Mr. Durrani said. “If a worker who has no disease symptoms comes to work and then confirms a viral infection, you will have to check all the recognitions they have been exposed to. In the end, maybe all the workers on the line won't be able to participate in production. ”

Christine McCracken, an analyst at Rabobank, estimates that some US meat companies are witnessing a 20-30% reduction in production capacity due to recognition of having to stay home to recover or take care of family members.

The situation is even more complicated when food trade plays an important role, but it may not be balanced globally because of the closure of the ports, the policies of the countries and the effort to infect. Many countries position agricultural production in the direction of exporting some key products rather than focusing on food safety, making the people of these countries more vulnerable if imports slow down. The shipment of imported almonds into the US is experiencing this situation.

On the other hand, in some countries that account for a large amount of supply available for export of particular goods, shipping disruptions can have a worldwide impact. Protection policies have had a similar effect: Kazakhstan has banned the export of some essential foods including barley, sugar, potatoes and onions.

Christian Gloor, chief executive at Zurich-based trader Heinz & Co., led Serbia as an example. The country recently issued an export ban on sunflower seed oil. “If some countries start to do so, the market will become crazy,” Gloor said. “For example, if France no longer exports wheat, it will cause a huge disruption in all markets. If one country starts this, others will follow and there will be a disaster. ”

Vulnerability is also becoming more severe in countries where food problems are available even before the corona virus outbreak, according to the UN's Abbassian, for example in sub-Saharan region. With all currencies falling against the dollar, some countries will have weaker buying power.

And of course, all these problems take place on the basis of climate change and unpredictable weather patterns, which can shock global food production. Drought has damaged crops in 2020 in some areas of Uruguay, New Zealand and Vietnam.

Matt Billings is a fourth generation farmer in California. His operations at Billings take place from start to finish – harvesting almonds, processing seeds and producing them into Ayo almond yogurt. All production stages are affected by the corona virus. Workers on his 405ha gardens cannot have enough daily masks to protect against impurities such as dust. Processing and manufacturing began to slow down as the absence of workers increased and he expected the situation to get worse. Face-to-face meetings at the shops to directly introduce products are canceled or postponed. “For farmers, we will find a way to overcome this situation. But there are millions of impacts going on and we cannot know the magnitude of these impacts, ”said Billings. “Everything you think about in theory is that everything is going normal, it's disappearing.”

According to Bloomberg



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