Pandemic and the Law of Unintended Consequences

If you are like me and have been to the grocery store recently, you may have noticed that some of the shelves are empty, and many more are thin. We have heard about, and probably laughed at, the shortages of toilet paper. But if you look more closely it’s not just the paper goods aisle any more. If you look around, there’s more that you notice isn’t as plentiful as it once was. Maybe noting that would quite count as a shortage but there is more and more space throughout the store that is starting to be more sparse.

As we start to understand more of the impact of the lock down and restrictions put in place to combat the Covid-19 pandemic, we begin to realize that there is a growing list of things we may not have imagined would have come from it. As is often the case, there are a lot of unintended consequences. And one of those is a growing realization of the impact on the food supply chain.

Some of the impacts we could have guessed, such as the closing of meat packing plants due to infections among the workers that may create a shortage of meat.

And some of the impacts are sort of funny (though certainly not to those involved), like the millions of pounds of chicken wings that are sitting in warehouses now because March Madness was canceled. Or the millions of barrels of beer that will go bad because of bars that have closed….and because March Madness was canceled.

But, unfortunately, it doesn’t stop there, and the consequences are spreading. In Wisconsin, dairy farmers are pouring out millions of gallons of milk due to low demand.

Egg distributors normally deliver eggs in liquid form to restaurants and schools. With most restaurants and schools in the country closed, you would think that they could just deliver eggs to stores instead. Yet, processing and packing infrastructure can’t be changed so quickly. The infrastructure is simply not there to put millions more eggs in cartons and re-route transportation to grocery stores instead of restaurants and school districts. As a result, farmers have excess of eggs that they can’t get to consumers. One farm in the Midwest announced it had to slaughter 61,000 egg laying hens. Yet, you may see sparse shelves in your store.

Similar stories come from across America’s heartland. Lettuce farmers plowing under crops, prices plunging for corn and other crops and farmers struggling to make ends meet at the same time restaurants face bankruptcy and grocery stores struggle to keep shelves stocked.

Some restaurant owners, being good capitalists, have tried to sell groceries either early on from their own stock of food items or by just re-selling deliveries that they already had on order. But in addition to the distribution problems, government regulation got in the way. Laws on food labeling and packaging are different for restaurants and for direct to consumer items. And, in Los Angeles among other places, the government was quick to step in and shut down restaurants trying to sell food and bulk toilet paper and other items they had in bulk.

For consumers, all of this  could, in the long run, mean fewer choices and an adjustment in the way we shop and stock our pantries. For farmers and the food supply chain, it could mean plunging margins as they struggle to make adjustments to the quick shock to the system. At a minimum, it will take months before the food supply chain starts to stabilize.

As we work our way through these hard times, we will find more and more how things have changed and we will indeed face a ‘new normal’ in many areas we may never have thought of.  We just don’t know all the places that will happen.

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