Food shortages in the US are worsening as supplies are drying up from the pandemic

Jan 14 (Reuters) – High demand for groceries coupled with rising freight costs and Omicron-related labor shortages are causing a new round of backlogs at processed food and fresh produce companies, resulting in empty supermarket shelves at major retailers across the United States.

Before the pandemic, perishable growers on the West Coast were paying almost triple trucking rates to ship things like lettuce and berries before they spoiled. Shay Myers, CEO of Owyhee Produce, which grows onions, watermelons and asparagus along the Idaho-Oregon border, said he has been holding back onions from shipping to retailers until freight costs come down.

Myers said transportation disruptions over the past three weeks caused by a shortage of truck drivers and the recent storms that blocked the freeway have caused freight costs for fruit and vegetable growers to double, adding to those already increasing pandemic prices. “We usually ship from the East Coast to the West Coast — we used to do it for about $7,000,” he said. “Today it’s somewhere between $18,000 and $22,000.”

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Sean Connolly, CEO of birds-eye frozen vegetable maker Conagra Brands (CAG.N), told investors last week that Omicron-related absences could limit shipments from its U.S. plants for at least the next month.

Earlier this week, Albertsons (ACI.N) CEO Vivek Sankaran said he expects the supermarket chain to face more supply chain challenges over the next four to six weeks as Omicron ramps up its efforts to close supply chain gaps. have strengthened.

Shoppers on social media complained about empty pasta and meat aisles at some Walmart stores (WMT.N); a Meijer store in Indianapolis was emptied by chickens; A Publix in Palm Beach, Fla., ran out of bath towels and household hygiene products, while Costco (COST.O) reinstated toilet paper purchase restrictions at some Washington state stores.

The situation isn’t expected to ease in the next few weeks, said Katie Denis, vice president of communications and research at the Consumer Brands Association, blaming labor shortages for the shortage.

The consumer goods industry is short of about 120,000 workers, of which just 1,500 were added last month, she said, while the National Grocer’s Association said many of its members work in grocery stores at less than 50% of their labor capacity.

Shelves are nearly empty at a Giant Food grocery store as the U.S. continues to experience supply chain disruptions on January 9, 2022 in Washington, U.S. REUTERS/Sarah Silbiger

US retailers are currently facing about 12% out-of-stocks for food, beverages, household cleaning and personal care products, compared to 7-10% in normal times.

The problem is more acute with grocery products, which have a 15% sell-out rate, the Consumer Brands Association said.

SpartanNash, a US grocer, said last week it has become more difficult to get supplies from food manufacturers, especially processed items like cereal and soup.

Consumers have continued to stock up on groceries while huddled at home to curb the spread of the Omicron variant. Denis said demand has been as high or higher over the past five months than it was in March 2020, at the start of the pandemic. Similar problems are observed in other parts of the world.

In Australia, grocery chain operator Woolworths Group said last week more than 20% of employees at its distribution centers are out of work because of COVID-19. In the branches, the virus has disabled at least 10% of the employees.

The company reinstated a two-pack per customer limit on toilet paper and painkillers nationwide both in-store and online on Thursday to help cope with staff shortages.

In the US, recent snow and ice storms that blocked traffic along the east coast for hours have also hampered food deliveries for grocery stores and distribution centers. These delays spread across the country, delaying shipments of perishable fruits and vegetables.

While growers with perishable produce are forced to pay inflated shipping costs to attract limited truck shipments, producers like Myers are choosing to wait for the backlog to clear.

“The canned goods, the sodas, the chips — those things got stuck because they weren’t willing to pay double or triple the freight, and their stuff doesn’t go bad in four days,” he said.

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Additional reporting by Praveen Paramasivam; Edited by Vanessa O’Connell and Diane Craft

Our standards: The Thomson Reuters Trust Principles.

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