U.S. grocery shortages are growing as the pandemic dries up supplies

January 14 (Reuters) – High demand for groceries combined with sky-high shipping costs and Omicron-related labor shortages create a new round of backlogs in processed foods and fresh produce, leading to empty supermarket shelves at major retailers across the United States.

Growers of perishable produce across the west coast pay almost triple pre-pandemic truck prices to ship things like lettuce and berries before they spoil. Shay Myers, CEO of Owyhee Produce, which grows onions, watermelons and asparagus along the border with Idaho and Oregon, said he has endured the supply of onions to retail distributors until shipping costs have dropped.

Myers said transportation disruptions in the past three weeks, caused by a shortage of truck drivers and recent highway blocking storms, have led to a doubling of shipping costs for fruit and vegetable producers on top of already rising pandemic prices. “We would typically ship from east coast to west coast – we used to do that for about $ 7,000,” he said. “Today it’s somewhere between $ 18,000 and $ 22,000.”

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Birds Eye Frozen Vegetables Manufacturer Conagra Brands’ (CAG.N) CEO Sean Connolly told investors last week that supplies from its U.S. factories could be limited for at least the next month due to Omicron-related absences.

Earlier this week, Albertsons (ACI.N) CEO Vivek Sankaran said he expects the supermarket chain to face more challenges in the supply chain over the next four to six weeks as Omicron has put a notch in its efforts to close gaps in the supply chain.

Shoppers on social media complained about empty pasta and meat aisles at some Walmart (WMT.N) shops; a Meijer store in Indianapolis was swept bare of chicken; a Publix in Palm Beach, Florida was out of bath paper and hygiene products for the home, while Costco (COST.O) reintroduced purchase limits on toilet paper in some stores in the state of Washington.

The situation is not expected to abate for at least a few more weeks, said Katie Denis, vice president of communications and research at the Consumer Brands Association, blaming the lack of manpower.

The consumer-packed goods industry is missing about 120,000 workers, of which only 1,500 jobs were added last month, she said, while the National Grocer’s Association said many of its grocery members operated with less than 50% of their workforce capacity.

The production shelves are seen almost empty in a Giant Food grocery store as the US continues to experience supply chain disruptions in Washington, USA, on January 9, 2022. REUTERS / Sarah Silbiger

U.S. retailers now face about 12% out of stock levels on food, beverages, household cleaning and personal hygiene products compared to 7-10% in normal times.

The problem is more acute with food, where sold-out inventory levels run at 15%, the Consumer Brands Association said.

SpartanNash, an American grocery distributor, last week said it has become more difficult to obtain supplies from food producers, especially processed goods such as cereals and soups.

Consumers continue to supply themselves with groceries while sneaking down at home to slow down the spread of the Omicron variant. Denis said demand over the past five months has been as high or higher than it had been in March 2020 at the start of the pandemic. Similar problems are seen in other parts of the world.

In Australia, grocery chain operator Woolworths Group said last week that more than 20% of employees at its distribution centers are off work due to COVID-19. In stores, the virus has put at least 10% of staff out of action.

On Thursday, the company reintroduced a limit of two packages per. customer across toilet paper and painkillers nationwide both in-store and online to deal with staff shortages.

In the United States, recent snow and ice storms that caught traffic for hours along the east coast also hampered food deliveries en route to grocery stores and distribution centers. These delays rippled across the country, delaying the shipment of fruits and vegetables with a limited shelf life.

While growers with perishable products are forced to pay too high freight rates to attract limited truck supplies, manufacturers like Myers choose to wait for the backlog to subside.

“The cans, the sodas, the chips – those things sat because they were not willing to pay double, triple the freight, and their stuff does not go bad in four days,” he said.

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

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