Coronavirus Creates U.S. Food Supply Shortages

Here is today’s Foreign Policy brief: Coronavirus begins to shock U.S. meat supply chains, the United Kingdom records Europe’s highest coronavirus death toll, and a German court challenges the European Central Bank’s quantitative easing policies.

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Retailers across the United States are limiting meat purchases as fallout from the coronavirus begins to be felt in the U.S. food supply chain. Warehouse retailer Costco, along with grocery chains Kroger and Wegmans, have all enacted purchasing limits to stop customers panic buying. The fast-food chain Wendy’s is sold out of meat in one out of every five stores.

No country for vegetarians. The United States consumes the most meat per capita of any country, so any long-term meat shortage isn’t likely to pass quietly.

The White House invoked the Defense Production Act last week to ensure the availability of meat during the crisis, as processing facilities have become outbreak clusters and led to closures nationwide.

On April 28, the United Food and Commercial Workers International Union (UFCW), America’s largest meatpacking union, said that 20 of its workers had died from COVID-19 and that 5,000 workers were either hospitalized or showing symptoms. UFCW said plant closures during the pandemic have led to a 25 percent reduction in pork slaughter capacity and a 10 percent reduction in beef slaughter capacity.

Weak links in the supply chain. Unlike its counterparts in Europe, the U.S. meat processing industry is highly consolidated. In beef production, for example, just three companies account for two-thirds of the market. This consolidation also takes place at the factory level: closing one large beef processing plant results in the loss of over 10 million beef servings in a single day, according to a White House fact sheet.

“This is 100% a symptom of consolidation,” Christopher Leonard, author of The Meat Racket, told Bloomberg. “We don’t have a crisis of supply right now. We have a crisis in processing.”

How does Europe compare? In Europe, the continent hit worst by the coronavirus pandemic, there is no such consolidation; there, the top 15 companies only account for just 28 percent of meat production. Outside those companies, the EU tends toward smaller slaughter companies that “operate locally, traditionally and are fiercely independent” according to a report by the European Federation of Food, Agriculture and Tourism Trade Unions.

As the coronavirus pandemic stretches health care workforces, it’s worth looking at how well placed each country is to handle it. Some countries with high caseloads appear more vulnerable than others. The United States, for example, has the oldest nursing workforce on the list (and nursing groups had declared a nursing shortage long before the pandemic). In Italy, more than 50 percent of physicians are over 55 years old. For a deeper look at how different countries’ health care workforces compare, read FP’s analysis here.

United Kingdom now Europe’s worst hit country. The United Kingdom now has the highest coronavirus death toll in Europe with approximately 32,000 deaths. It has overtaken Italy (29,315 deaths) and now has the world’s second highest death toll after the United States.

Although Britain has seen a reduction in new coronavirus cases per day over the past week, the total number of new cases per day is about the same as it was at the beginning of the month. This could be due to testing, as it recently pushed past a goal of 100,000 tests per day. British Foreign Minister Dominic Raab said it’s too soon to draw comparisons between other countries. “I don’t think we will get a real verdict on how well countries have done until the pandemic is over,” Raab said.

White House to disband coronavirus task force. The Trump administration is set to wind down a task force dedicated to handling the country’s coronavirus epidemic, even as the number of weekly cases has changed little since the beginning of April and appears to be rising in some states. Although Vice President Mike Pence said the group will transition accountability from the task force back to the federal agencies by late May, infectious disease experts Anthony Fauci and Deborah Birx will still retain a daily White House presence.

It’s unclear whether disbanding the task force will have much of an impact on the U.S. coronavirus response. The White House has been largely sidelined while state governors carry most of the operational responsibility for handling the outbreak. Dozens of states have already entered into regional pacts to secure personal protective equipment and other medical supplies. Although the White House has issued its own guidelines for easing lockdowns, it ultimately left the responsibility with individual states.

German court threatens to block ECB program. A German constitutional court ruling could stop the purchase of German bonds through the European Central Bank’s Asset Purchase Program (APP) if the ECB cannot show that the “economic and fiscal policy effects” of the program is within the bank’s remit. The court said the German government has “a duty to take active steps against” such quantitative easing “in its current form.” The ruling does not affect the $750 billion pandemic response program already set up by the ECB. Heinrik Enderlein, president of the Hertie School of Governance in Berlin, argues that the court’s decision is “economically naïve.”

“The problem is that the border between monetary policy and its economic implications can’t be defined,” he wrote on Twitter. The broader worry is that the German court is setting a precedent for other countries to pick and choose which EU laws to obey.

Ivorian leader staying in France. Ivory Coast’s prime minister, Amadou Gon Coulibaly, will be spending the next few weeks in France for medical reasons after undergoing a heart exam, according to a statement from the country’s presidency. He has a history of heart troubles and had heart surgery in 2012. Defense Minister Hamed Bakayoko will serve as interim prime minister until Coulibaly’s return. The prime minister has a busy year ahead; he is the ruling RHDP party’s candidate in the October presidential election.

China’s space plans. Chinese state media reported the successful launch of a new rocket and prototype spacecraft as Beijing’s ambitions expand outside the earth’s atmosphere. The rocket carried a cargo module that China hopes will one day be used to bring a crew to the moon, something Beijing plans to complete in the next decade.

An Italian summer vacation seems out of the question at the moment as the coronavirus is still keeping millions under lockdown. That hasn’t stopped the island of Sicily from launching a daring campaign to entice travelers to come visit. Sicily’s regional government is offering subsidized accommodation, discounted activities, and is even considering paying for flights in a bid to kickstart its tourism industry in time for summer. Italy’s tourism agency is forecasting a 20 billion euro drop in tourism revenues compared to last year.

That’s it for today.

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