There seems to be a concern that we will run out of food. How can grocery stores keep shelves stocked?
Once the novelty of hoarding toilet paper is overcome by good sense (and civil courtesy), we should be fine.
They (grocery stores) have a strong incentive to keep stocked up on high-demand items, and to set to one side the frivolous stuff. My sense is that our distribution system—one of the finest anywhere—is up to the challenge. Everyone in the supply chain has a strong incentive to step up their “game.” After all, that is “what they do.” We already see some re-deployment of workers into the distribution network.
Remember, the meat system (and grain) is a deep and highly articulated system with much “inventory” always in the pipeline (on the hoof or in storage). We heard this morning that dairy prices might fall somewhat, which will encourage some culling of herds. That will bring beef into the supply chain—though not tenderloin and other top cuts. I look forward to a drop in the price of hamburger (ground chuck, etc.).
Planting season is just around the corner. Reuter’s reports a surge in grain futures which should encourage substantial spring plantings:
CBOT soft red winter wheat futures were on track for their fourth straight day of gains and hit their highest since Feb. 24. Wheat has risen 7.4% this week, which would be its biggest weekly gain since May, as demand for pasta and bread was expected to rise due to the coronavirus pandemic.
“Wheat has got sort of an interesting relationship with the coronavirus,” said Ted Seifried, chief market strategist for Zaner Ag Hedge. “During the run on the grocery stores, a lot of people forgot about being gluten free.”
At 10:18 a.m. CDT (1618 GMT), CBOT May soft red winter wheat futures were up 8 cents at $5.43 a bushel. CBOT May corn was up 2 cents at $3.47- 1/2 a bushel and CBOT May soybeans were up 15-3/4 cents at $8.59 a bushel.
Chinese importers signed deals to buy U.S. corn and wheat in their first round of major purchases since Washington and Beijing signed a Phase 1 trade deal in January, the U.S. Agriculture Department said.
USDA also said that unknown buyers booked deals for 110,000 tonnes of
U.S. soybeans. On Thursday, two trade sources with knowledge of the deal said that exporters sold soybeans to China.
The 756,000-tonne corn sale, announced on Friday morning, was China’s biggest purchase of U.S. corn since July 2013. But corn futures retreated from their overnight highs after the crude oil market turned lower.
So the food system is responding to price signals, as we would expect.
Dr. Daniel Bromley can be contact at dbromley@wisc.edu.
