Omicron's spread means more food outages at US grocery stores

US supermarkets have been struggling to keep shelves fully stocked throughout the pandemic. PHOTO: AFP

WASHINGTON (BLOOMBERG) - The highly contagious Omicron virus variant is disrupting already stressed food supply chains, sickening so many workers that more shortages at grocery stores are all but certain.

Supermarkets have been struggling to keep food fully stocked throughout the pandemic as a result of labour shortfalls in every part of the food system, from farms to manufacturers to distributors.

Now Omicron is taking the problem to a new level. The variant is raging across the United States and raising health concerns that many thought vaccines had put to rest.

Schools and day care facilities are seeing closures again, keeping more Americans from work. All of that will help fuel wage increases and price surges for consumers, as well as 2020-style food outages.

"We're already seeing bare shelves," said Ms Bindiya Vakil, chief executive officer of supply chain consultant Resilinc. "Labour shortages due to Omicron are going to exacerbate the issue."

Grand Rapids, Michigan-based grocery distributor and store operator SpartanNash is seeing a tripling of cases in recent weeks among its staff. About 1 per cent of its 18,000-strong workforce reported having the virus in recent weeks, compared with about one-third of a per cent a couple of months ago.

The company has been able to fulfil orders, but with delays. The employees who are available are working more.

"It is harder because we're asking people to work overtime," chief executive Tony Sarsam said in an interview. "We're stretching ourselves."

On the receiving side, the company is having trouble getting supplies from food manufacturers, especially processed items such as cereal and soup, Mr Sarsam said. "The manufacturers can't get labour," he added. 

Meat companies are in focus because major outbreaks at plants in 2020 led to shortages and spikes in prices. Currently, beef and pork producers are not reporting significant operations issues, but there are signs of declining productivity.

For instance, the number of hogs slaughtered so far this week was down 5.5 per cent from a year ago, and cattle slaughter was down 3.6 per cent, according to US Department of Agriculture data on Thursday.

More food inspectors are calling in sick, too, said Ms Paula Soldner, chair of the National Joint Council of Food Inspections Locals.

"The Delta variant didn't have a whole lot of impact on the workforce," she said, but "Omicron is nailing us."

This comes at a time when inspectors are already in short supply throughout the country. In central Nebraska, for example, vacancies are as high as 35 per cent, she said.

Inspectors are integral in meat plants, where they look at every processed animal by law.

Foodmakers Conagra Brands and Campbell Soup are seeing upticks in Covid-driven absenteeism among workers. Both companies are framing it as another disruption among many and have been aggressively hiring for some time now.

"If people are out or people are quarantined as they've been since the beginning of Covid, we've got backup plans," said Mr Sean Connolly, chief executive officer of Conagra Brands.

When it comes to farms, the story is the same: Omicron is making it harder to produce food.

Egg Innovations, one of the biggest US producers of free-range eggs, has been short-staffed for a year due to the pandemic, according to chief executive John Brunnquell.

Now, Omicron is making it even more difficult to keep workers both in his business and across the industry.

There is seemingly no solution. Mr Brunnquell said he cannot mandate vaccinations without taking a hit to his operations.

"Because it is such a tight labour market, and because we're already short of people, I don't feel I have the ability to mandate it without losing a couple more," he said.

Join ST's Telegram channel and get the latest breaking news delivered to you.