Is There Going to Be a Food Shortage in the U.S. in 2022?

Mohit Oberoi, CFA - Author
By

Feb. 16 2022, Updated 11:36 a.m. ET

If you visit a local grocery store, you might notice that several items including biscuits and meat products are in short supply. Many people wonder if there will be a food shortage in the U.S. in 2022.

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The global supply chain has been broken for over a year now, which impacts a lot of manufactured products as well as food products. While things were getting back on track, the rapid spread of the omicron variant of the COVID-19 virus delayed the process.

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 also put pressure on the already strained demand-supply balance.

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meat shortage
Source: Getty

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

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Is there a food shortage in the U.S.?

There have been reports of some food product shortages. For example, ahead of Thanksgiving in 2021, some turkey sizes were in short supply. Similarly, chicken wings were hard to find for Super Bowl parties in 2022. In general, meat products have been in short supply and hard to find at supermarkets.

There have been food shortages at schools.

There was also a food shortage in some schools across the U.S. in 2021. Some schools even contemplated 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.

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There has been food insecurity in the U.S.

Feeding America estimates that 42 million people suffered food insecurity in 2021, which is way above 35 million people who experienced it in 2019. The organization operates 200 food banks in the country. Food banks have especially borne the brunt of food shortages.

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The steep rise in food prices has been compounding the problems for food banks and low-income families. Food inflation has been running above the headline CPI numbers, which has distorted the monthly budgets of low-income families. They tend to spend a large percentage of their income on food.

Packaged food products have been in short supply as well.

There has been a shortage of CPG (Consumer Packaged Goods) as well, and products ranging from Pillsbury to Hot Cheetos have been hard to find. The Consumer Brands Association estimates that in December 2021, 22 percent of CPG products were out of stock. Historically, the figure has been between 7 percent–10 percent.

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While there has been a shortage of food products for human consumption, pet food has also been in short supply. Some of the popular brands, like Friskies wet cat food, have been hard to find, which made pet owners shift to alternate brands.

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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.

Will the food shortage situation get worse in 2022?

The USDA thinks that the U.S. food market will be well supplied. Food prices are expected to remain stable or even decline in some cases in 2022. It added, “USDA is monitoring the situation closely in collaboration with our federal and state partners.”

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The labor shortage and supply chain issues are contributing to the shortage of some food products in the U.S. Also, many people have been hoarding due to concerns about a possible food shortage. They buy more groceries than normal to stock up, which makes the supply issues worse.

While the prospects of a nationwide food shortage are negligible for now, some popular food products have been hard to find. However, as the omicron wave subsides in the U.S, the supply chain situation should improve.

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The labor market should get better because more people are coming back to the labor force, which is reflected by the rise in the labor force participation rate. Also, companies announced new production lines in 2021, which should lead to increased supply. By the end of 2022, the food shortage problem should have been resolved to a great extent.

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