Money

Don’t Panic. We’re Not Running Out of Food

If you're worried about meat rationing, here's what's really going on.

by Mike Pearl
May 4 2020, 11:00am

 JOSEPH PREZIOSO/AFP via Getty Images

Food is your absolute, non-negotiable, bare minimum, primal need. A lot of news has been scary lately, but when you get right down to it, recent headlines like “Tyson Foods chairman warns 'the food supply chain is breaking',” are about as scary as it gets. Losing something like the internet or the power grid could lead to civil unrest and societal breakdown, but if there’s no food, that’s the ballgame. Civilization is done. I regret to inform you that you’re a cannibal now.

So it’s a good thing that’s not what Tyson meant. Their full-page newspaper ads from April 27 were a warning that supplies of Tyson chicken and pork are about to get a little spotty because their slaughterhouse workers are starting to experience outbreaks of COVID-19, like the one in Indiana that affected an eye-popping 900 employees.

So how bad is this really going to get in the U.S.? Are stores going to run dangerously low on essential items? Are people at the margins of society going to have access to food? And what happens if we get desperate?

First of all, you can live without chicken and pork from the good folks at Tyson (for the record, I’ve gotten by without either one for years), but I don’t need to tell you that after more than 100 days and 60,000 COVID-19 fatalities, there are still, somehow, empty shelves all over America’s grocery stores, and thus, there are still scary social media posts about said empty shelves.

“The empty shelves will continue for a while,” said Christopher Mejía Argueta, a research scientist at the MIT Center for Transportation and Logistics. “But if I have someone in front of me who is going to start panicking about the empty shelves, what I would tell that person is, you don't need to worry. Food is still going to arrive.” You might just have to settle for your second or third choice for a bit.

The funny thing about empty shelves on social media is that the phenomenon predates the panic. The first positive test result in the U.S. was on January 20, almost two weeks before the Iowa caucus (remember that?), back when the main news story in the U.S. was Trump's impeachment trial. In one interesting early example of empty-shelf scaremongering, on January 22, City Paper in Washington, D.C. published an article complaining about poorly-stocked Whole Foods stores in the area—with complaints running as far back as Thanksgiving of 2019, and a Twitter user responded to City Paper with this eerie half-joke: “Yes, of all the things happening now, global warming, emerging viruses, the impeachment, etc., the thing I find most distressing are the poorly stocked shelves at Whole Foods. Really.”

Coincidence? Yes, clearly, but it’s also a sign that in our modern economy, empty store shelves are caused by something other than panic-buying. First of all, there’s the issue you’ve probably read about wherein certain grocery store items—most famously toilet paper—are manufactured for commercial distribution, like for schools, restaurants, and hospitals, and it’s not easy to transition them into a grocery store-ready version when they’re needed.

But even if all those commercial goods could be turned into grocery store inventory, there would still be a larger systemic problem: grocery stores hate inventory, and that’s more or less why there was no canned tomato sauce last time you went to Kroger.

“Inventories have generally been way too lean,” said Rich Weissman, a part-time teacher of supply chain management at Northeastern University, who worked in direct procurement for 25 years, and writes for the trade publication Supply Chain Dive. “It will take awhile to get those replenished, and then adjusted for higher inventory levels. Pressure on small suppliers will be intense,” Weissman said.

Back to those pre-crisis empty shelves at Whole Foods. According to Business Insider, they came about because the Amazon-owned company had adopted a too-clever-by-half inventory policy called “Order-to-shelf,” or OTS, described by Insider as “a tightly controlled system,” in which “employees largely bypass stock rooms and carry products directly from delivery trucks to store shelves.” Basically, if customers were even a little bit exuberant about stocking up on one particular item, there would be no backup and shelves would go empty.

As Mejía Argueta explained to me, “if you own inventory, this is money that you have stopped there. It's piling up, and you don't know if this is going to expire. It's costly to have inventory on hand.” This kind of ruthless efficiency is related to the “just-in-time” or “kanban” manufacturing insight that capitalists all over the world learned from Toyota in the 1980s—if they move stuff from where it’s made to where it’s needed just in time for someone to buy or use it, companies “do not have to tie up expensive capital in idle inventories,” according to a 1983 New York Times article. And their shareholders will, therefore, be richer.

To the shareholders of grocery stores, owning a bunch of food and having it lying around can only mean possible spoilage, theft, and just generally less profit. That’s why, whenever possible, companies like Kroger try not to own the food in their stores at all, and instead let their vendors own the food in their stores, so they can be in charge of stocking it just in time.

Not having reliable access to some of the foods you want is inconvenient and sorta, well, alarming for customers, but for the grocery stores themselves, this is the most profitable system. They’ll adjust the way they order so they can keep shelves better stocked wherever possible, but no matter what effects the pandemic has on the retail business, this system is probably here to stay at least in some areas of the grocery store, according to Mejía Argueta.

“It’s not that the just in time era is gonna come to an end—I don't think so. I think that what we will see now is a little bit more thinking about where to implement these types of strategies, and which type of [products] we should not.”

Therefore, if you want to see fuller shelves, Mejía Argueta, told me, “go early in the morning, right after age-65-and-over time, when everything has just been stocked.” Every expert I consulted said the same, by the way.

In terms of the calories you need to live through this crisis, there are no indications that stores will face anything even close to a shortage.

“Transition will have to happen much faster than it ever has before,” said Alexis H. Bateman, also a researcher at the MIT Center for Transportation and Logistics. She’s optimistic that even the arch capitalists who design supply chains now have a goal beyond maximizing profit. “When every player in the supply chain is hurting [there’s] sort of a new responsibility—a new value base that's being generated,” she told me.

But that doesn’t mean everyone will have access to all that food. Again, there were food accessibility problems before this crisis—there was even malnutrition in the U.S., because food costs money, and a lot of Americans don’t have very much of that, particularly now that at least 30 million people are newly unemployed.

Food insecurity can hit anyone at any time, according to Michael Halligan, CEO of God's Pantry Food Bank in Lexington, Kentucky, one of the parts of America with the highest prevalence of food insecurity, even in non-COVID times. According to Halligan, food insecurity strikes people whenever an “unexpected change in the availability of resources, in order to feed their family or to feed their household, or to feed their spouse, or to feed themselves.” In other words, if you’re now unemployed, or working less because you’re caring for someone with, say, a horrible respiratory virus, or you can’t work right now because you have a horrible respiratory virus yourself, you might need a food bank.

“What we've seen in the last few weeks,” he continued, “are those same kinds of issues magnified by the fact that it is happening to the entire country at the same time.”

I reached out to the anti-poverty non-profit Oxfam for this article, and while they said they couldn’t grant me an interview, their PR representative told me they were “extremely concerned about a rise in global hunger as a result of the pandemic.” The United Nations is similarly concerned. There are reports of U.S. food banks closing under the added strain of extra demand, and haunting photos of miles-long lines of cars and masked people waiting hours for food.

Halligan has noticed the problem. “We typically spend a little less than $2 million a year on food. Last month, we ordered $800,000,” meaning they’re spending at about five times their normal rate. But Halligan’s organization, which also supplies food to shelters and soup kitchens, is still going strong, he says. “On the fundraising side, what we have seen is an amazing amount of generosity.”

According to an April 17 story in The Guardian, many food banks are over-budget, and handling the added demand by going into debt. They’re also running into the same food supply issues as grocery stores—because the food they stock is the same stuff as what’s in your local store. The Guardian quotes the president of a Pittsburgh food bank as saying her organization only has enough money on hand for one month of operations.

For what it’s worth, Mejía Argueta, whose research involves more creative ways to get food into marginalized communities, told me that a food relief program that forms part of his research is still receiving plenty of locally-sourced produce, and delivering it directly to marginalized communities in the Boston area. A truck full of fruits and vegetables stops in a neighborhood, and residents fill boxes with their preferred items. “I think that we are doing a great job,” he said.

His worry, however, is delivery. “I think that there is not enough capacity in terms of drivers, to continue moving all the cargo around, if you consider that COVID-19 is extremely contagious, some of the drivers could call in sick. So moving these produce items is what worries me the most.”

For someone in his line of work, Halligan was sanguine about the problems food-relief programs are facing. “How we're using resources today looks different and it's because the need is up,” he told me. “We're dealing with a short period of time where those adjustments are occurring, and they're occurring on the fly.”

In fact, his main worry was that someone experiencing food insecurity—maybe even someone reading this—might not seek the services of a food bank, or would believe stereotypes about people who need food relief. His message: “Please don't allow the stereotypes to influence your need to ask for help. Go to the food bank website. See what the resources are that are available for help. Seek that help.”

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Tagged:
grocery stores
food banks
Coronavirus
food shortages
supply chains
meat processing
Panic Buying