Hopefully the advanced information CTH provided on the food supply-chain has helped to understand the issues, challenges and demands many are seeing.  Inside the food manufacturing industry the impacts of COVID-19 are stunning; crazy increases in business; and there are going to be interim shortages on popular products.

To understand the ongoing issues with empty shelves, and also prepare for future shortages on specific products (hint: buy extra pet food now), here’s some interesting background:

Champaign, Illinois – […] “We can’t make enough mac and cheese right now,” said Dilton “Dee” Gibbs, plant manager at the facility that makes half of the Kraft Macaroni & Cheese sold in the U.S., as well as A-1 steak sauce, mayonnaise and salad dressings.

The packaged food giant, along with many of its peers, has had to ramp up production amid an abrupt reversal in consumer trends. Shoppers who in recent years shunned processed foods in favor of fresher, healthier and more premium products are now loading up on shelf-stable standbys as shelter-in-place orders force vast swaths of the nation’s population to prepare for a long stretch of cooking at home.

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Comrades, the administrative state will take care of all your food needs.  There is no reason to be self-sufficient in the production of food products.  As a result Vermont has designated the selling of seeds as “non-essential” and blocked from purchase:

It is more than a little alarming to see state officials now beginning to drill down into products that stores will be permitted to sell, or not sell, within businesses that are permitted to remain open during the COVID-19 mitigation effort.

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Oh, this is almost too much winning.  Almost…  President Trump has appointed White House Manufacturing Advisor Peter Navarro to lead all U.S. coordination of the Defense Production Act.   Just like that… presto… Navarro becomes a bazillion times more powerful than CoC President Tom Donohue.   Delicious.

WASHNGTON – President Trump announced Friday he is appointing his trade adviser Peter Navarro to serve as his national Defense Production Act policy coordinator after using the act to force General Motors to begin making ventilators to treat coronavirus patients.

“He’s a tremendous guy and he will do a fantastic job,” the president said during a press briefing with his coronavirus taskforce at the White House. He said Navarro will serve as the national Defense Production Act coordinator for the federal government. (link)

Peter Navarro has been a long-term China hawk warning about the risk of U.S. multinationals doing critical supply-chain manufacturing overseas.  Navarro, working closely with U.S. Trade Representative Robert Lighthizer, has been the tip of the spear in the execution of America First policy and jobs.

This appointment, and these additional responsibilities, is a recognition for his efforts.

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• Phase One was retail. • Phase two was distribution. • Phase three was the space between manufacturing and distribution. • Phase four is raw material supply to manufacturing. U.S. food processing, and manufacturing is now operating at full capacity.

By now the majority of protein manufacturing has caught up. Beef and pork should be solid at your local market; however, chicken, while available, will lag to full replenishment capacity in the protein sector. The reason is: “chicken” is an ingredient component in many shelf stable items (soup etc.), that are still short as the manufacturing sector runs at capacity.

We enter a phase where grain commodities are now arriving at manufacturing.

♦ Between the Appalachian mountain range and the Colorado mountain range there is a massive amount of grain, meal, and derivative (farming) product generated. Thin component inventories, now exhausted at processing, are the cause of the current manufacturing supply chain stress… This lag will take a little longer.

There are train-loads of grain products heading both East and West daily; but there is a process of background prioritization taking place within the grain (total), flour, meal, rice and dried beans sector. The downstream ingredient system has a long-term and short-term priority schedule.

Example: total flour is prioritized to industrial bakeries for the production of bread. Nationally retail or consumer flour shortages are caused by prioritization in this part of the supply-chain.

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Thank you Greg Abbott.  This is the first smart move by a state leader recognizing the realities of the system at hand.  Texas Governor Greg Abbott has signed a waiver allowing restaurants to sell their bulk food directly to retail customers.

Amid all of the reactionary decisions by elected officials, this is a smart, and temporary move that can take pressure off the retail supply chain.  Hopefully others will follow.

Leadership is often about recognizing the unique landscape and taking ‘outside the box’ action in response to current conditions.  Greg Abbott recognizes there are two distinctly different supply-chains, and this modification can open one distribution valve.

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To understand the purpose and specific need of the latest Executive Order CTH can share a familiar analogy to help better conceptualize the issues.

There are several supply chains that are being affected by the coronavirus mitigation effort; two specific sectors involve healthcare products and food distribution. Today’s executive order targets both.

As a network of U.S. manufacturing continues to increase the production of healthcare products, masks, shields, ventilators and medicines; any hoarding or pricing opportunism around those items is obviously a matter of great interest for overall public health.

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There are many people, many voters, simply stunned at how the Democrats are trying to use the COVID-19 economic emergency to add unrelated ideological elements to the Coronavirus Aid, Relief, and Economic Security Act.

Senator Tom Cotton walks through some of the items the Democrats are demanding before they will allow economic relief to U.S. companies and workers. MUST WATCH:

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White House Trade and Manufacturing Policy Advisor Peter Navarro discusses some of the more granular details behind the COVID-19 mitigation strategy.   The policies are designed to counter the economic impacts, and then use a tactical approach toward the challenges in the supply chain for medical supply needs.

Navarro discusses some of the private sector shifts in production and manufacturing to generate medical supply needs as an outcome of the defense production act.

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Math is math. It doesn’t take a rocket scientist to do the math, understand the logistics of the current extreme demand, recognize that fixed assets are limited, and realize if you shut down essential services for truckers the total supply-chain will suffer.

On March 17th Pennsylvania officially shuttered all Turnpike service plazas in response to coronavirus concerns. However, the decision was ridiculously short-sighted as long-haul and regional Truckers depend on fuel stations, bathrooms and restaurants along the route. Thankfully PA officials realized their error and reopened the service stations yesterday.

PA Authority – The Pennsylvania Turnpike Commission has agreed to reopen all of service plazas that they shuttered earlier this week for Coronavirus.

All 17 closed service plazas are set to reopen at 7 a.m. on Friday, March 20, according to a news release from the Pennsylvania Turnpike Commission.

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Agriculture Secretary Sonny Perdue has an important message about the U.S. food sector. With shortages in the retail food (grocer) sector the last part is key…. “don’t take more than you would normally use in a week or two.”  WATCH:

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The aspect that most models are missing, is the pressure on the supply-chain will not soon end.  The restaurant sector (‘food away from home’) appears to be operating at far less than half capacity (perhaps as low as 25%) due to coronavirus restrictions.  As long as those food consumers remain shifted into the retail supply chain (food at home), there are going to be long-term shortages due to capacity constraints and distribution limits.

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