Food Shortages After Fake Omicron Hits Stores From U.S. to Australia

New South Wales authorities on Friday reinstated some restrictions to check the tide of infections, and food shortages may continue for some time, according to Woolworths.

“We are seeing impacts across the whole country, and it’s not yet clear how soon the system will come back into balance as we move through the omicron wave,” Woolworths Chief Executive Officer Brad Banducci said in a note to customers.

Aussie shoppers aren’t alone. In the U.S., grocery distributor SpartanNash said it has become harder to get supplies from food manufacturers, especially processed items like cereal and soup. There are signs of declining productivity in the meat sector, while more food inspectors are calling in sick.

Tyson Foods Warns “Food Supply Chain Is Breaking”

News feeds in April have been inundated with food supply chain disruption stories due to coronavirus-related shutdowns. At least a third of US meatpacking facilities handling hogs have shifted offline this month, other plants that process cows and chickens have also shuttered operations, forcing farmers to cull herds and flocks. This is because each plant closure diminishes the ability for a farmer to sell animals at the market, leaves them with overcapacity issues similar to the turmoil facing the oil industry. Only unlike oil where pumped oil must be stored somewhere (as one can’t just dump it in the nearest river) even if that ends up costing producers money as we saw last Monday when oil prices turned negative for the first time ever, food producers have a simpler option: just killing their livestock.

We previously explained what this imbalance has created: crashing live cattle spot prices while finished meat prices are soaring, which doesn’t just affect farmers but also consumers simultaneously and could spark a shortage of meat at grocery stores as soon as the first week of May.

Kroger, the nation's largest supermarket chain, indicated on Friday that it plans to hike prices because of inflation.

Kroger is "passing along higher costs to the customer where it makes sense to do so," CFO Gary Millerchip said at the company's earnings call on Friday.

Last week, Smithfield Foods, one of the top pork producers in the world, closed another operation in Illinois. That news came directly after Hormel Foods closed two of its Jennie-O turkey plants in Minnesota. Then it was reported over the weekend that major poultry plants across Maryland, Delaware, and Virginia had reduced hours because of worker shortages due to virus issues. And then on Sunday, JBS USA closed a large beef production facility in Wisconsin.

“During this pandemic, our entire industry is faced with an impossible choice: continue to operate to sustain our nation’s food supply or shutter in an attempt to entirely insulate our employees from risk,” Smithfield said in a statement Friday. “It’s an awful choice; it’s not one we wish on anyone.”

Bloomberg’s map shows the latest closures of meatpacking plants:

Even before the Tyson warnings, last week we cautioned that it was appropriate to label virus outbreaks at meatpacking plants as the “next disaster zones” of the pandemic. This wasn’t just because of workers and USDA inspectors were contracting the virus, and in some cases dying – but because food shortages could also add to social instabilities during a pandemic and economic crisis.