The global food supply is a very delicate balancing act. By far the vast majority of the population will get their groceries weekly from a local supermarket. The local supermarket does not want to store large amounts of perishable goods, or even non-perishable goods. Their IT systems keep track of products on the shelves and arranges delivery so that everyday new products arrive and those that are low in stock are replenished. In this way the Supermarkets do not have too much cash tied up in products but they have a daily flow of cash as products get bought by customers daily and the stores purchase new supplies daily. This means that within a couple of days without a fresh supply, the shelves would be empty.
The daily supply of goods to the Supermarkets is therefore crucial in order for the customers to get their groceries. No deliveries, leads to no groceries, which means no food for the customers. What could disrupt this process?
Change in Demand
Usually changes in customer demand happens very gradually and then Supermarkets can adjust their supplies accordingly. For example if more and more customers start buying Avocadoes and the store’s IT system recognizes increased demand then more Avocadoes will be ordered from the suppliers and subsequently delivered to the stores. The suppliers will also recognize this increased demand from all the stores that they supply and then they in turn will order more from their growers. However, growers cannot magically produce additional avocadoes. Cultivating the ground, planting the trees, giving the trees time to grow, it’s going to take a few years. Ironically, avocadoes do grow on trees, but not in the abundance that that phrase would have us believe. Other non-tree crops can be produced a little quicker, cereal crops have a yearly harvest and so an additional field can be cultivated and planted and then the crop will be available within 12 months time. Salad crops have a shorter growing time, and can be cultivated in greenhouses, year round in some parts of the world. And finally, there are crops that can be kept in storage, grains and cereals, dried beans and so on. When demand changes then the storage facilities are accessed and the goods shipped to the destination store taking anywhere from a day to a few weeks depending on the origin.
Where demand increases quickly, as was noticed at the start of 2020 as people quickly went to the stores to stock up on certain items. Of particular notice was the lack of toilet paper in the stores which continued for many weeks. It wasn’t being consumed any faster, it was simply being stored in people’s cellars and the usually very predictable demand spiked and supplies ran out. A few weeks later the demand either reduced because everyone had plenty stored up, or the factories had managed to increase their manufacturing to overcome this bump.
A change in demand is not usually a problem that we need to be concerned about. What we need to remember is to be prepared in advance so that we’re not caught out. We don’t want to be panic buyers. When a deadly virus is spreading among the population, the last place you want to be is the grocery store.
Change in Supply
A change in demand is not what we are preparing for ultimately. A disruption in supply is much harder to predict. Or it is seemingly so rare that we overlook the warning signs. Let’s look at the causes of supply chain disruption:
- Supplier Bankruptcy or other issue
- Severe weather or natural disaster
- Protests / Riots / Blockades
- Regulatory changes
These could be defined as follows:
- Supplier disruption
- Geological disruption
- Consumer disruption
- Governmental disruption
A problem at the supplier can conceivably be bankruptcy, strikes, a large fire, or perhaps a cyber-hack. Something that potentially could have been foreseen and prevented by the supplier themselves but was not. The closer the supermarket chain, or distributer works with the supplier, the easier it is to spot these problems in advance and have a contingency plan in place. Being somewhat pessimistic, we could easily foresee that this is not done. Probably it will only affect one particular item for a short amount of time, before the supply chain gets reorganised.
An event originating through severe weather such as snow or flooding, hurricanes, tsunamis, earthquakes and volcanoes are much harder to predict and to avoid. They could directly affect the supplier or our local store, and the most obvious would be adverse weather causing crops to fail or truck deliveries to be delayed, or our local store to fail to open. This will either cause prices to rise in the short term, or a temporary shortage or items whilst the condition is resolved. The preparation for this is simply to have a small stock at home to see you through the disruption, two weeks supply should fix this sort of issue. Fresh water is probably the most important to have in case of floods or power related issues. Warm clothes and blankets is also a good idea.
The thing is these are not common events but they do occur. Being prepared for them is just sensible.
Riots and protests can block lorries from making deliveries to stores, or can result in looting that will also see products removed from shelves, and possibly stores being closed for a number of days. This could extend up to weeks for some products if there is maybe action happening in another country causing the problem. In the West we are not used to seeing such disruption but in recent times there is an increasing likelihood of such disruptions happening.
Governmental disruption is the one that we may need to be more prepared for. I will use this heading to cover all the major scenarios. This includes War and Hyperinflation, as well as pandemic mandates – something I would never have considered just a few short years ago. War with China or Russia, particularly in Europe would disrupt the financial markets and the energy markets. The cost of fuel would rise astronomically and the value of currencies like the Euro and the Dollar would be certainly questionable. Other articles will be written on these subjects, but suffice to say having food in storage, having knowledge of basic medicine and scavenging, and having alternative means for cooking and heating and all going to be important for such catastrophic occurrences.
My advice then is this:
Expect the unexpected. Prepare for disruption. If you expect 1 week of disruption then prepare for 2; if you expect 1 month of disruption then prepare for 2. Read other articles here to find out some practical ways to prepare for a dark winter.