Is There Going to Be a Food Shortage in the U.S. in 2021?

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Oct. 14 2021, Published 1:22 p.m. ET

If you visit a local grocery store, you might notice that several items including toilet paper and diapers are in short supply. Many people wonder if there will be a food shortage in the U.S. in 2021.

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First, the global supply chain is broken, which impacts a lot of manufactured products. To make things worse, COVID-19 outbreaks in parts of Asia have led to broken supply chains. China’s power crisis isn't making things any better.

Why is the global supply chain broken?

The demand for most goods has spiked as the global economy recovers from the 2020 lows. This is coming at a time when the supply for many goods is short. The inventory restocking ahead of the upcoming holiday season is also impacting the demand-supply balance.

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Add the logistics issues including jammed ports, a container shortage, and a driver shortage for inland travel, and we have a perfect storm brewing.

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Is there going to be a food shortage?

There have been reports of some food product shortages. Butterball, which is among the leading turkey producers in the U.S., has warned of a shortage of small turkeys ahead of Thanksgiving.

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Food shortages at schools

There has also been a food shortage at several schools across the U.S. Some schools are even contemplating shifting back to remote schooling in a bid to escape the food shortage. While the USDA (U.S. Department of Agriculture) said that there are “currently no nationwide shortages of food,” it has alluded to a shortage of some products at grocery stores related to inventory stocking.

Is there a food shortage in the U.S?

There are credible reports of localized shortages of some food products in the U.S. The common thread in most of these is the shortage of labor at food producers and logistics issues related to transporting food products from warehouses to grocery stores. A packaging material shortage is also leading to production bottlenecks for some food producers.

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Will the food shortage situation get worse in 2021?

The USDA thinks that the U.S. food market will be well supplied. It expects food prices to remain stable or even decline in some cases. It added, “USDA is monitoring the situation closely in collaboration with our federal and state partners.” Meanwhile, U.S. food price inflation is at elevated levels.

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Higher food prices combined with the steep rise in gas prices have hit the monthly budgets of many low-income households in the U.S. The Food and Agriculture Organization of the United Nations has said its FFPI (FAO Food Price Index) rose to a decade high in September. The index measures the month-over-month changes in prices of a basket of food products.

The labor shortage and supply chain issues are contributing to the shortage of some food products in the U.S. Also, many people are concerned about a possible food shortage. They buy more groceries than normal to stock up, which amplifies the problem.

While the prospects of a nationwide food shortage are negligible, herd buying ahead of the holiday season would put more pressure on the already strained food supply chain in the U.S.

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