Food supplies in the United States are under pressure, from plants to store shelves
The US food system is under renewed strain as Covid-19’s Omicron variant stretches the workforce from processing plants to grocery stores, leaving holes in supermarket shelves.
In Arizona, one in ten processing plants and distribution workers at a large manufacturing company was recently on sick leave. In Massachusetts, employee illness has slowed the flow of fish to supermarkets and restaurants. A grocery chain in Southeast America had to hire temps after about a third of the employees at the distribution centers became ill.
Leaders and analysts in the food industry warn that the situation could persist for weeks or months, even as the current wave of Covid-19 infections subsides. Recent virus-related absenteeism among workers has contributed to persistent supply and transport disruptions, which has kept some foods scarce.
Almost two years ago, the Covid-1[ads1]9 lock led to an increase in grocery purchases that cleared store shelves for products such as meat, baking ingredients and stationery.
Now some leaders say the supply challenges are worse than ever. The shortage of workers leaves a wider range of products in short supply, said food industry leaders, with availability that sometimes changes daily.
The shortage of workers results in product shortages, leaving holes in supermarket shelves.
Photo:
frederik j. brun / Agence France-Presse / Getty Images
Supermarket operators and food producers say that the total supply is plentiful, despite persistent labor shortages and difficulties in transporting goods. They say that shoppers will find what they are looking for, but that they may have to choose different brands.
Eddie Quezada, production manager at a Stop & Shop store in Northport, NY, said Omicron has stretched its department more than any previous wave of the pandemic, with one in five of its employees receiving Covid-19 in early January. The deliveries have also suffered a setback, he said: Earlier this month, he received only 17 of the 48 boxes of strawberries he had ordered.
“There’s a domino effect in operations,” said Mr. Quezada.
At a Piggly Wiggly franchisee in Alabama and Georgia, about a third of the pickers who needed to organize products and load trucks at grocery chain distribution centers were sick the first week of January, said Keith Milligan, the inspector. The company has struggled to get food to the stores on time due to driver shortages and staffing problems that have not improved, said Mr. Milligan, and let Piggly Wiggly change his ordering and warehousing plans daily in some cases. Frozen vegetables and canned biscuits are starting to run low, he said.
The stock level of food at US retailers reached 86% for the week ending January 16, according to data from market research firm IRI. It is lower than last summer and pre-pandemic levels of more than 90%. Sports drinks, frozen biscuits and refrigerated dough are particularly low, with stock levels in the range of 60% to 70%. Stock prices are lower in states such as Alaska and West Virginia, IRI data show.
“We expected supply problems to be resolved as we enter this period right now. Omicron has put some effort into that,” Vivek Sankaran, CEO of Albertsons Cos., Said in an interview with analysts on January 11. He said that the Boise , Idaho-based supermarket giant expects more supply challenges over the next month or so.
Similar challenges at packaging and meat packaging factories mean that the shortage may persist, said industry officials and analysts. The Department of Agriculture showed that slaughter of cattle and beef production during the week of 14 January decreased by approx. 5% from the previous year, with 9% slaughter of pigs. The chicken treatment was about 4% lower during the week ending January 8, the USDA said. Lack of labor also affects milk processing and cheese production, according to the agency.
Because it often takes weeks before meat reaches the store shelves from the plants, the current Omicron-related work problems at producers can prolong supply problems, said Christine McCracken, CEO of meat research at agricultural lender Rabobank. “This could mean less meat for longer,” she said.
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Lamb Weston Holdings Inc.,
The North American top seller of frozen potato products, said in January that they expect work challenges to continue to affect production rates and throughput in the factories, 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 several of its employees have tested positive for Covid-19 at a time when increased demand from consumers is already exceeding the company’s available supplies.
In Massachusetts, Tom Zaffiro is struggling to move fish to grocery stores and restaurants. Mr. Zaffiro, president of Channel Fish Processing Co., said the company can only run at 80% capacity on days when key workers are out, while short-handedness at trucking companies and breading vendors makes it even more difficult to prepare and transport the company’s fish. Channel has tripled lead times for customers, he said, and those who do not meet a minimum order are not guaranteed supplies at all.
Vegetable suppliers in the West, which deliver most of America’s leafy greens in the winter, are also facing production challenges.
Steve Church, co-chairman of Church Brothers Farms, a California-based manufacturing company, said about 10 percent of employees at his Arizona vegetable processing and distribution facility were on sick leave on a given day earlier this month. This number dropped last week, and Mr. Church said he has still been able to fill orders, but he worries about the strain the extra work puts on the Church’s remaining staff, who work overtime to keep fresh chopped vegetables and salads i pose. to grocery stores and restaurants like Walmart Inc.
and Chipotle Mexican Grill Inc.
“These people are tired and they want days off,” Mr. Church said. “It’s a vicious circle.”
Channel Fish Processing can run with only 80% capacity on days when key workers are out.
Food businesses and supermarket chains are increasing as they struggle to operate with fewer employees. In Northport, Stop & Shop has offered unionized overtime pay to cover shifts for sick employees and asked part-time employees to work longer hours, said Mr. Quezada, production manager, adding that staffing and deliveries will be better in his department.
Stop & Shop said they are experiencing the impact of the recent increase in Covid-19 cases as other businesses across the country. The company said that it does not expect disruptions in customers’ shopping experience and that it has plans to continue operations.
Midwest-based Angelo Caputo’s Fresh Markets has run out of frozen breakfast cereals, canned beans and other items, and has bought what they can get to keep the shelves in stock, said Dan O’Neill, director of the grocery store and fresh produce store.
“We see no relief,” said Mr. O’Neill, adding that the company is trying to secure more inventory from alternative suppliers.
At Channel Fish Processing, the shortage of labor at trucking companies and breading suppliers has made it even more difficult to fulfill orders.
Brandon Johnson, president of Korth Transfer, a Wisconsin-based trucking company that transports goods from vinegar to beer, said the latest wave of Covid-19 cases has hit Korth employees almost as hard as the earliest phase of the pandemic. Mr. Johnson said he has become accustomed to telling customers that he simply has no drivers left to move the cargo.
Mr. Johnson said he spent about 20 days behind the wheel of his own trucks last year, including a 500-mile round trip to ferry a load of soy sauce from the manufacturer to a spice supplier for use in a teriyaki recipe.
“It makes it easy to say that we are intercepted,” said Mr. Johnson, referring to the days he spent as a driver. “I can say, ‘I have nothing more to give.’ We have everyone we can work for you.
– Patrick Thomas contributed to this article.
As the cost of groceries, clothing and electronics has risen in the United States, prices in Japan have remained low. WSJ’s Peter Landers goes shopping in Tokyo to explain why stable prices, even if they are good for the 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 jesse.newman@wsj.com and Jaewon Kang at jaewon.kang@wsj.com
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