Shipping Container Shortage May Drive Up Food Prices And Extend Delivery Delays
Image Source: Coley Brown
The pandemic has been great for the shipping business. But a container shortage is now wreaking havoc on the global supply chain. Shipping container factories are scrambling to keep up with demand, causing delays in shipping everything from US soybeans to Thai rice. China is also paying huge premiums for containers, making it more profitable for shippers to return the containers to China empty instead of refilling them for the return trip as usual. That means the US is stuck with tons of grains and India can't ship its mountains of sugar. As a result, white sugar prices recently surged to a three-year high, and delays in US soybean shipments could mean higher tofu and soy milk costs for Asian consumers. Analysts expect shipping containers to remain scarce through the end of 2021. At least the giant Ever Given cargo ship was finally freed from the Suez Canal Monday, easing tensions in the frantic shipping industry.
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Grapefruit Prices Expected To Rise As Texas Citrus Industry Faces $300 Million Loss
Image Source: Dale Murden
In the aftermath of an unusual winter storm, Texas faces crop losses of at least $300 million, according to industry association Texas Citrus Mutual. "It was turning fruit on the trees into slush," said association president Dale Murden. Texas is the No. 2 producer of US grapefruit, and market analysts expect prices to jump 10% over the course of the next month. Grapefruit prices were already up 7.7% from this time last year, according to research firm Nielsen.
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Tyson And Pilgrim's Pride To Pay Nearly $300 Million To Settle Chicken Price Fixing Claims
Image Source: Richard B. Levine/Sipa
Tyson Foods and Pilgrim's Pride Corporation have settled price-fixing litigation over alleged collusion in the $65 billion chicken industry. Tyson will pay $221.5 million and Pilgrim's $75 million to so-called “end-user” consumers, commercial purchasers, and purchasers that bought chickens directly from the companies. While the payments will resolve all class claims against Tyson, the company still faces price-fixing claims by restaurant chains, supermarkets, and food distributors, including Chick-fil-A, Kroger, Walmart, and Sysco Corp. Meanwhile, US chicken wing supplies remain strained and prices will be high again this season according to a Food Market report due to increased demand throughout the Super Bowl and March Madness.
Millions Of Hungry Americans Turn To Food Banks For First Time
Image Source: AP Photo
During the worst of the pandemic, U.S. unemployment skyrocketed to 14.7%, a rate not seen in almost a century. Millions turned to food banks to feed their families, and in late March, 20% of the country's food banks almost ran out of food, according to Feeding America, the nation’s largest anti-hunger organization. The supply problem has since subsided but demand has not. The organization handed out 4.2 billion meals from March through October, more than ever in its 40-year history. It also found that 4 in 10 visitors are first timers. The Food Research & Action Center, another an anti-hunger organization, also found that 40% of visitors had annual incomes above $50,000 before the outbreak. Many relatively well-off Americans have sought hunger relief this year. As the pandemic continues, Feeding America anticipates the number of those going hungry to swell to at least 50 million Americans.
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Hershey Upends Cocoa Market By Sourcing Beans From Futures Market Instead Of From Traders
Image Source: Whole Foods Market
Back in April, the USDA tested a pilot program making it easier for food stamp recipients to buy groceries online during the pandemic. Now 1.1 million households use the service each month, a boon to everyone adhering to social distancing guidelines. It's also been a huge payday for e-commerce giants Amazon and Walmart, the only two grocery retailers to participate in the program in most states. Given that food stamp recipients spent a whopping $55 billion on groceries in 2019, the USDA's pilot program has taken a big bite out of revenue at regional and local grocery stores. Some market analysts say that's a solid reason to end the program when the pandemic ends.
