Monday, May 27, 2024

Why are store shelves empty? AgCenter experts explain

by BIZ Magazine

Walk into any grocery store in February and there were aisles of well-stocked shelves with dizzying choices of packaged meats, vegetables, grains, fruits, snacks and treats. The hardest part was deciding which food and which brand to buy.

Contrast that to grocery shopping now. Customers wearing homemade cloth masks are finding those same grocery aisles depleted.

Food shortages at the retail level and mile-long lines of cars at local food banks occurred at the same time as news of plowed-under vegetable and fruit crops in Florida and California and dumping of milk in Wisconsin. How did we get to the point of dumping food in the glare of food insecurity for 37 million Americans and an estimated increase of 17.1 million unemployed due to the coronavirus?

Scarcity in grocery stores despite an abundant food supply can be attributed primarily to distribution challenges. This is because COVID-19 has caused major changes in the American food supply and how Americans purchase food.

Most American consumers are not connected to agricultural production, processing and cooking of foods. Restaurants and other specialty outlets such as bakeries and butcher shops account for more than half of food expenses. Less than 13% of food dollars was spent at the retail level, which includes grocery stores.

In the last three weeks of April, dining at restaurants declined by more than 77%, according to the Institute of Food Technologists. The shuttering of restaurants and nonessential businesses has catapulted consumers back to the kitchen to prepare meals at home.

Some early retail shortages were related to panic buying — similar to hurricane buying, a well-known event in Louisiana. After the initial panic of COVID-19, the types of foods that were sold pivoted from prepared and served items to those bought to be prepared at home.

In recent history, the American food industry has become highly specialized and efficient. Just-in-time delivery, strategically placed distribution centers, computerized algorithms to estimate demand and supply, and tracking technology to record inventory ensured a steady supply of products.

COVID-19 exposed this complex network of interconnected variables in the American food system. The logistics of the supply chain had to be reconfigured and shift from food service to retail in a very short period of time.

As food service outlets closed or reduced operations, they suddenly had to cancel orders from farmers who provide items like tomatoes for sandwiches and potatoes for french fries in restaurants.

A tomato cultivar is grown for a particular end use. This could be as a freshly sliced hamburger topping, a salad component or for canned tomato paste, juice or salsa. With the high labor costs of harvesting — and no immediate alternative market for this extremely perishable product — tomato farmers had few options. Crops remained in the field to be plowed into the soil.

Russet potatoes are used primarily for french fries in fast-serve restaurants. The high starch content and low moisture of this potato ensures a crisp, golden french fry. Because potatoes have a longer shelf life than tomatoes, some Idaho farmers were able to make much-needed food donations.

Fluid milk saw a similar decline in demand. About 50% of fluid milk sales are in food service, which was suddenly closed. Yet dairy herds must be milked whether there is demand or not; hence, farmers dumped milk.

There was an unexpected increase in demand for yeast and flour. Many people are working from home, alternating conference calls with the many steps needed to bake bread and enjoy the aroma of homemade yeast-raised bread hot from the oven.

Another unexpected increase was demand for eggs at the grocery store. Eggs are a versatile food that is a great source of protein, contribute to satiety and last a long time in the refrigerator. While average consumers are accustomed to buying eggs by the dozen, restaurants, schools and other institutions often purchase them in 30-dozen cases and in an array of other forms, including cartons of cracked, pasteurized whole eggs. When many of these institutions closed, there suddenly was little market for eggs packaged in such large quantities.

As a result of this shift in demand, expect to see some cooperation between the Food and Drug Administration, the food industry and your local grocery store. For example, the FDA has temporarily relaxed some of the nutritional labelling regulations to allow eggs intended for wholesale markets to be sold in grocery stores. Nutritional information will be posted on the store shelf instead of on individual packages. Also expect to see flour repackaged from the 50- or 100-pound food service packages into 5-pound bags.

At food banks, staffers are figuring out how best to operate under stay-at-home measures, which complicated the logistics of accepting, storing and distributing donations. There recently has been an uptick in food banks’ ability to accept and store donations and to buy supply from local farmers. Federal programs are providing direct support to farmers, and the U.S. Department of Agriculture is purchasing and distributing fresh produce, dairy and meat to food banks and other nonprofits.

There is no doubt that COVID-19 has changed — and continues to change — the food industry and Americans. The industry and governmental agencies are working steadfastly to pivot production, manufacturing and distribution systems to meet the changing needs of markets and consumers throughout the country. American food production remains high, and domestic products, imports and food in storage exceeds demand.

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