America’s food supply is under pressure, from factories to store shelves

The US food system is under new pressures as the Omicron variant of Covid-19 extends the workforce from processing plants to grocery stores, leaving gaps on supermarket shelves.

In Arizona, one in 10 workers at a large manufacturing company’s processing and distribution plants recently fell ill. In Massachusetts, employee illnesses have slowed the flow of fish to supermarkets and restaurants. A grocery chain in the southeastern United States had to hire temporary workers after about a third of its distribution center employees fell ill.

Food industry executives and analysts are warning that the situation could persist for weeks or months, even if the current wave of Covid-19 infections eases. Recent virus-related absences among workers have compounded ongoing supply and transportation disruptions, which have the effect of making some foods scarcer.

Nearly two years ago, Covid-19 lockdowns led to a surge in grocery shopping that emptied store shelves of goods such as meat, bakery ingredients and paper goods.

Now some executives say supply problems are worse than ever. The lack of workers leaves a wider range of products in short supply, food industry executives said, with availability sometimes changing daily.

Lack of labor leads to product shortages, leaving holes in supermarket shelves.


Photo:

Frédéric J. Brown/Agence France-Presse/Getty Images

Eddie Quezada, product manager at a Stop & Shop store in Northport, NY, said Omicron had stretched its department more than any previous wave of the pandemic, with one in five of its staff contracting Covid-19 in early January. . Deliveries also took a hit, he said: Earlier in the month, he only received 17 of the 48 cases of strawberries he ordered.

“There is a domino effect in operations,” Mr. Quezada said.

At a Piggly Wiggly franchisee in Alabama and Georgia, about a third of the pickers needed to organize produce and load trucks at the grocery chain’s distribution centers were sick the first week of January, said Keith Milligan, his controller. The company is struggling to get food to stores on time due to driver shortages and staffing issues that have not improved, Mr Milligan said, leaving Piggly Wiggly to change its ordering and delivery plans on a daily basis. storage in some cases. Frozen vegetables and canned cookies are running out, he said.

Food inventory levels at U.S. retailers hit 86% for the week ended Jan. 16, according to data from market research firm IRI. This is less than last summer and pre-pandemic levels of over 90%. Sports drinks, frozen cookies and chilled dough are particularly low, with inventory levels in the 60% to 70% range. Stockpile rates are lower in states such as Alaska and West Virginia, according to IRI data.

“We expected the supply issues to be resolved as we enter this period at this time. Omicron has put the brakes on that a bit,” Vivek Sankaran, general manager of Albertsons Cos., said in a Jan. 11 call with analysts. He said the Boise, Idaho-based supermarket giant expects more supply issues over the next month.

Similar challenges at packaged food and meatpacking plants mean shortages could persist, industry officials and analysts said. The Ministry of Agriculture showed that cattle slaughter and beef production in the week to January 14 was down around 5% from a year earlier, with pig slaughter down by 9%. Chicken processing was down about 4% in the week ending Jan. 8, the USDA said. Labor shortages are also affecting milk processing and cheese production, according to the agency.

Because it often takes weeks for meat to reach store shelves from factories, current Omicron-related labor issues at producers could prolong supply issues, said Christine McCracken, director meat research executive at agricultural lender Rabobank. “That could mean less meat for longer,” she said.

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Lamb Weston Holdings Inc.,

North America’s largest seller of frozen potato products, said in January that it expects labor issues to continue to affect production rates and throughput at its plants, where staff shortages have already disrupted operations. Conagra Brands Inc.,

which makes Birds Eye frozen vegetables and Slim Jim meat snacks, said earlier this month that more of its employees had tested positive for Covid-19 at a time when high consumer demand is already exceeding Company supplies available.

In Massachusetts, Tom Zaffiro is struggling to get fish to grocery stores and restaurants. Mr. Zaffiro, president of Channel Fish Processing Co., said the company can only operate at 80% capacity on days when key workers are absent, while labor shortages in trucking companies and breadcrumb suppliers makes preparation and transportation even more difficult. the company’s fish. Channel has tripled delivery times for customers, he said, and those who don’t meet a minimum order are not guaranteed at all.

Western vegetable suppliers, which supply the bulk of U.S. leafy greens during the winter, are also facing production issues.

Steve Church, co-chairman of Church Brothers Farms, a California-based production company, said about 10% of employees at its vegetable processing plant and distribution facility in Arizona were sick on any given day earlier this month. . That number dropped last week, and Mr Church said he was still able to fill orders, but he worries about the impact the extra work is taking on the remaining Church employees, who work hours extra to keep fresh cut vegetables and bagged salads moving. at grocery stores and restaurants such as Walmart Inc.

and Mexican Chipotle Grills Inc.

“These people are tired and they want days off,” Mr Church said. “It’s a vicious circle.”

Channel Fish Processing can only operate at 80% capacity on days when key workers are absent.

Costs for food companies and supermarket chains are rising as they struggle to operate with fewer employees. In Northport, Stop & Shop offered unionized employees overtime pay to cover shifts for sick staff and asked part-timers to work longer hours, product manager Mr. Quezada said, adding that staffing and deliveries were improving in his department.

Stop & Shop said it was feeling the impact of the latest rise in Covid-19 cases like other businesses across the country. The company said it does not anticipate any disruptions to customers’ shopping experience and has plans in place to continue operating.

Midwest-based Angelo Caputo’s Fresh Markets is running out of frozen breakfast items, canned beans and other items, and is buying whatever it can to keep its shelves stocked, Dan O’Neill said. , director of the central store and perishable goods at the grocer.

“We don’t see any sort of relief,” O’Neill said, adding that the company is trying to secure more inventory from alternative suppliers.

At Channel Fish Processing, labor shortages at trucking companies and breadcrumb suppliers have made it even more difficult to fulfill orders.

Brandon Johnson, president of Korth Transfer, a Wisconsin-based trucking company that hauls goods ranging from vinegar to beer, said the latest wave of Covid-19 cases has hit Korth employees almost as hard as the first. phase of the pandemic. Mr Johnson said he had become used to telling customers he simply had no more drivers to move their loads.

Mr Johnson said he spent around 20 days driving his own trucks last year, including a 500-mile round trip to haul a load of soy sauce from his manufacturer to a supplier of condiments for use in a teriyaki recipe.

“It’s easy to say we’re bugged,” Mr Johnson said, referring to his days as a back-up driver. “I can say, ‘I have nothing more to give. We have everyone we can work for you.

While the cost of groceries, clothing and electronics rose in the United States, prices in Japan remained low. The WSJ’s Peter Landers goes shopping in Tokyo to explain why stable prices, while good for your wallet, can be a sign of a slow-growing economy. Photo: Richard B. Levine/Zuma Press; Kim Kyung Hoon/Reuters

Write to Jesse Newman at [email protected] and Jaewon Kang at [email protected]

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