And in the starkest warning yet that high food prices could last for a long time, Tyson Foods warned in a full-page ad in the New York Times on Sunday that the "
"As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain," wrote Tyson Chairman John Tyson, patriarch of the company's founding family, in a Tyson Foods website post that also ran as a full-page ad in several newspapers. "The food supply chain is breaking."
Confirming the worst fears of American pork and bacon consumers, Tyson wrote that the company has been forced to close plants, and that federal, state and local government officials needed to coordinate to allow plants to operate safely, "without fear, panic or worry" among employees. He warned that supply shortages of its products will be seen at grocery stores, as at least a dozen major meatpacking plants close operations for virus-related issues.
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.
The distress in the agricultural space has not been limited to just livestock. Dairy and produce farmers have had to dump or throw out spoiled products due to a collapse in demand for bulk products, mostly because of shifting supply chains with the closure of restaurants, cruise ships, hotels, resorts, education systems, and anyone else who is not deemed essential in a lockdown.
What this means is that farmers who generally sell bulk products do not have the means at the moment to convert product lines into individual items for direct to consumer selling. This will take time for the conversion. So, in the meantime, with no customers, farmers have to dump.
Days after President Trump floated the idea that the US government could purchase five years of airline tickets in bulk as part of a stimulus package for crippled airline carriers, Boeing CEO's Dave Calhoun has warned that air travel growth might not return to pre-corona levels for years.
Calhoun said the new reality in a post-corona world is a depressing one for airlines: "...they are making difficult decisions that result in grounding fleets, deferring airplane orders, postponing acceptance of completed orders, and slowing down or stopping payments."
This is more bad news for Boeing, who has drawn down on revolvers as it struggles to survive, requesting a government bailout as it's faced with a wave of cancellation orders for its planes.