How Coronavirus Could Disrupt The Supply Chain For Food

ARI SHAPIRO, HOST:

In normal times, it's rare to see empty grocery store shelves in a major American city. These days, those scenes are common. Millie Munshi is an agriculture editor for Bloomberg News, and she is here to talk about how the food supply chain is holding up under the strain of this pandemic.

Welcome.

MILLIE MUNSHI: Hi. Thanks for having me.

SHAPIRO: Are the empty shelves just a sign that people are hoarding and buying more than they should, or are there actual shortages of important food products?

MUNSHI: At this time, there's no shortage of food in the United States. Warehouses are pretty full. There's a lot of things of - supplies of things like frozen cuts of pork, wheels of cheese.

The reason you're seeing the empty shelves is because of how much frenzied buying there has been. And with that huge spike in demand, retailers, suppliers, the whole supply chain really has had a hard time refilling and restocking. So that's really what's causing the empty shelves right now.

SHAPIRO: Has the pandemic caused any logistical challenges in the supply chain that gets stuff onto the shelves?

MUNSHI: Yes, definitely. We're starting to see real evidence of constraints coming onto the supply chain. I mean, there's things - for example, like, there's a finite number of trucks that can actually load up at a warehouse to bring chicken or ice cream, toilet paper, that kind of thing into the grocery stores. There's finite numbers of hours that people can spend on stocking shelves, stocking rail cars and all of that.

Then there's other kinds of knock-on effects from the virus. In China a couple of months ago, when they were really at the peak of their virus, the exports from China slowed down into places like Canada. And - so that created a shortage of containers coming in from China into Canada. And so now Canadian pea companies, for example, are having a harder time exporting because they don't have the empty containers to fill.

SHAPIRO: Interesting. I know you've been talking with people in various points of the supply chain. Give us an example of somebody who's experience you think reflects the larger story of what's happening today. I understand you talked with an almond farmer who has a good story.

MUNSHI: That's right. I spoke with Matt Billings. He's a fourth-generation farmer in California. He actually operates all the way from grove to spoon. He grows almonds. He processes them. He manufactures them into AYO almond milk yogurt. And what he told me is that basically every step of that process right now is impacted from the virus and its ripple effects in various ways.

For example, the farmers that work on his almond groves, they can't get access to the kinds of masks that they need to protect against dust and the sprays that they use. In his processing facilities, people are starting to call in sick a little bit because the virus is starting to spread. There's probably going to be more issues down the road with workers calling in sick both in places like manufacturing and processing facilities but also at places like beef plants and slaughterhouses. There was actually a beef plant in Canada that closed today because of a virus case.

SHAPIRO: And I imagine that could set off a chain of dominos.

MUNSHI: That's exactly right. We could see a situation where there are production bottlenecks. There is probably not going to be major shortages, but there definitely could be hiccups and bottlenecks as you see more and more of this labor crunch showing up in different places around the world.

SHAPIRO: And we've mostly been talking about food production in the U.S. You briefly mentioned Chinese exports. There is a lot of international trade in produce and food products. Given that this is a global pandemic, is international shipping and food importation at serious risk?

MUNSHI: Yes. This is a big question right now. The whole global food system is very interconnected. The U.S. happens to be a major exporter, but there are a lot of countries in the world that are big importers. And they could see access to those imports cut off.

You could also have a situation where countries are moving to secure their own domestic supplies and therefore not exporting as much as usual. In the last week, we've seen Kazakhstan, which is actually one of the world's biggest wheat flour shippers, put bans on their exports. And so there's some concern now that what if more countries around the world take that kind of protectionist stand.

SHAPIRO: And so...

MUNSHI: And that could have a serious impact.

SHAPIRO: Given concerns that something might in the future happen with the food supply as this pandemic grows and spreads, what would you say to consumers who are concerned about not being able to get products that they need?

MUNSHI: At the current moment, especially in the United States, there's not going to be shortages. So the kinds of mega-hoarding that we've seen is really not necessary, and it actually contributes to more of the empty shelves that you see in the grocery stores.

At the same time, I think consumers in the United States and especially around the world should be prepared to see a little bit of food inflation. Almost everyone that I've talked to, and reporters as well, have said that they are starting to see some increases in prices. In the U.S., for example, we've already seen egg prices shot up.

SHAPIRO: Millie Munshi is an agriculture editor for Bloomberg News.

Thank you for sharing your reporting with us.

MUNSHI: Thanks very much. Thanks for having me.

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