Pressure surrounds the US food supply chain

 Pressure surrounds the US food supply chain

Consecutively infected workers with Covid-19 make food production and transportation in the US increasingly stressful, and store shelves are difficult to fill.

The US food supply chain is under new strain, as the Omicron variant causes workforce shortages in both processing plants and grocery stores, leaving gaps on supermarket shelves.

Omicron has impacted the company's workforce more than any previous wave of outbreaks, said Eddie Quezada, Product Manager at Stop & Shop in Northport, New York. Year-to-date, one-fifth of employees have quit. On the supply side, earlier this month he received only 17 out of 48 boxes of strawberries ordered. "The domino effect is happening," he said.

At a Piggly Wiggly franchise in Alabama and Georgia, about a third of the grocery chain's distribution center workers took sick leave during the first week of January 2022.

The company's operations supervisor, Keith Milligan, said it has struggled to get food to stores on time due to driver shortages and unresolved staffing issues. This caused Piggly Wiggly to change its daily ordering and stocking plans in some cases. "Frozen vegetables and canned biscuits are on the low side," he said.

Workers at Channel Fish. Photo: WSJ

Workers at Channel Fish. Photo: WSJ

According to data from market research firm IRI, stock levels of food products at US retailers reached 86% in the week ending January 16. This is lower than last summer and pre-pandemic levels were more than 90%. Sports drinks, frozen biscuits and chilled powders are particularly low, with only about 60% to 70% in stock. IRI data shows that stockpiling rates are quite low in states like Alaska and West Virginia.

"We expected the supply issues to be resolved when we got to this point. But Omicron caused a bit of a problem," said Vivek Sankaran, CEO of Albertsons Cos. The Boise (Idaho)-based retailer expects supply to remain challenging over the next month or so.

Similar challenges at packaged food plants mean shortages could linger, analysts and food industry officials say. The Ministry of Agriculture said that cattle and beef slaughter output in the week of January 14 decreased by about 5% compared to the same period in 2021. Pig slaughtering alone decreased by 9%. Chicken production is down about 4% from the week ending Jan. 8. According to the agency, the labor shortage is also affecting milk processing and cheese production.

It usually takes several weeks for meat from the factory to reach the shelves, so labor issues related to Omicrons at the production site, says Christine McCracken, director of meat research at agricultural lender Rabobank. could prolong the supply problem. "This means less meat for a longer period of time," she says.

Lamb Weston Holdings, North America's leading frozen potato producer, expects labor challenges to continue to affect output at its plants, as staff shortages disrupt operations. Conagra Brands, which makes Birds Eye frozen vegetables and Slim Jim meat snacks, said many of its employees have tested positive for Covid-19 at a time when consumer demand is outstripping available supply. company.

In Massachusetts, Tom Zaffiro is struggling to deliver fish to grocery stores and restaurants. Mr. Zaffiro, President of Channel Fish Processing, said the company can only run at 80% capacity on days when key workers are off. Along with that, shortages in trucking companies and bread suppliers make it more difficult to prepare goods and transport them. Channels have tripled delivery times for customers, and channels that don't meet the minimum order may not be able to guarantee delivery.

Vegetable suppliers in the West, which supply the majority of America's greens during the winter, also face production challenges. Steve Church, Co-President of California-based Church Brothers Farms, said about 10% of employees at his Arizona vegetable processing and distribution facility became ill earlier this month.

That number dropped last week, and the company is still able to fulfill orders. But he worries about increasing overtime pay for the rest of the employees, who ensure orders for fresh vegetables and packaged salads can still be delivered to grocery stores, Walmart supermarkets or the Chipotle restaurant chain. Mexican Grill. "Those people are tired and they want a day off. It's a vicious cycle," he said.