- The coronavirus has certainly affected food production, with consumers encountering price increases and shortages.
- quarantines, supply chain disruptions, trade disputes, labor shortages, and border closures restrict access to getting the food.
- USA Today reported food price spikes in April
Global food prices are always in a state of flux, and can change depending on poor weather conditions, supply chain issues, animal diseases, and other factors. A recent example is African swine fever, which decimated more than 25 percent of the world’s pig population in 2020. This caused food prices in China to soar by 15 to 22 percent. In East Africa, locusts destroyed crops, which led maize prices in Kenya to increase by 60 percent in 2019.
The coronavirus has certainly affected food production, with consumers encountering price increases and shortages. The long-term effects are not clear yet, but they are sure to have global implications.
The Supply Chain
According to the Food and Agriculture Organization of the United Nations (FAO), the world has “enough food for everyone.” However, quarantines, supply chain disruptions, trade disputes, labor shortages, and border closures restrict access to getting the food. This makes getting products and goods from Point A to Point B more difficult.
FAO feels that there may be continued supply chain issues, especially for items like meat, milk, fish, fruit, and vegetables. As agricultural products are being produced in farms and factories, workers have become sickened with the virus. They now must work under new conditions that involve restricted movement. Other workers may be afraid to return to work, at least temporarily; there have also been stories of farmers abandoning crop fields and dumping milk.
USA Today reported food price spikes in April, with the highest monthly increase in half a century. Even though the Consumer Price Index dropped by 0.8 percent, consumers spent about 2.6 percent more groceries. These higher numbers reflect meat processing plant slowdowns and closures, and the shift from restaurants to retail stores and institutions. Panic-buying did not help the situation, either. This was classic supply-and-demand economics in action; demand went up, supply went down, prices went up.
That swine flu (it hit before the pandemic) is also part of the picture, and grocery pork prices were up in April. There is also a shortage of certain kinds of pork cuts. Here is USA Today’s list of price increases that month:
- Apples: 4.9%
- Bread 3.7%
- Hot dogs: 5.7%
- Pork chops: 7.4%
- Poultry: 5.8%
The New Normal
COVID-19 has laid out the weaknesses and woes of the world’s food production system, and experts are sharing their opinions on how these can be addressed. In the United States before COVID-19, approximately half of food spending was in restaurants and other places where people go to eat out. This is much smaller now, closer to 10 percent of people eating out.
Grocery stores have reacted quickly, and are more up to speed after the initial hysteria. Smaller farmers with significant amounts of storage crops like cheese and yogurt have seen increased demand, but may struggle with the delivery infrastructure. Now, many are unsure about when to start planning and how much. It is hard to predict how consumer demand will change once people are out of lockdown. New eating and spending habits may arise, as people have become used to eating at home and spending less money on dining out. Home food delivery could be another habit that sticks with people, too.