In many parts of the country, Canadians are now reporting a growing number of empty grocery store shelves. It’s happening here, in the United States, and in many other parts of the industrialized world; it’s not just a Canadian phenomenon.
Before Omicron, empty shelves were already visible, but few noticed. They were sporadic in the fall as supply chain woes continued, and our food industry was essentially experiencing supply chain fatigue. After many months of dealing with public health protocols, labour issues, and higher input costs (which tends to create more tension across the supply chain), something had to give.
But due to its viral viciousness, Omicron just made matters worse. Most food companies, from farm to store, have been operating with 20 to 30 percent fewer people available to handle the work. And most of the time, the labour involves perishable goods. For many farmers, processors and retailers, waiting is just not an option.
The storyline for January 2022 at the grocery store is not the same as it was in March 2020. Far from it. Most concerningly, supply chain issues are the driving factor behind food shortages and rising costs—not consumer demand. Shortages of both toilet paper and food were the result of consumer panic coupled with a collapsing food service industry. This time around, supply chain challenges are Omicron, the winter weather, and (of course) public health measures at the border, which may have compromised its fluidity.
Nevertheless, while Omicron was a “gut punch” to the food industry, vaccine mandates for truckers are robbing the industry of the oxygen it desperately needs right now.
Canadians are likely underappreciating how the border is so critical to North America’s food security. Whether you are for or against global trade, Canada has an unforgiving northern climate, along with a moderate population size living in one of the world’s largest geographic areas. Unless a sector builds a significant competitive advantage, and some have, it is difficult to produce food in Canada while keeping affordability for consumers in check. The vaccine mandate disqualified anywhere between 8,000 to 16,000 Canadian truckers from crossing the border; on the American side, about 125,000 drivers. With such a high absence of people, food access will undoubtedly become an issue.
Additionally, if food continues to cross the border, and it probably will, expect that food to be more costly. To motivate truckers to cover the Canadian market will likely come at a price. Reports suggest that getting a truck to cover the Canadian market is 25% more expensive compared to just a few days ago. Higher logistical costs, like anything else involving the supply chain, will catch up to consumers. That’s the reality of supply chain economics. And with fewer people driving around, major buyers will be prioritized over smaller ones. Many processors will have a harder time getting the ingredients they need to manufacturer the food we buy every day, on both sides of the border.
With food distribution, short-sighted government interference can generate market failures, more disruptions and, yes, more empty shelves at the grocery store.
However, the food industry has been able to deal with a lot over the past several decades. The pandemic has been nothing if not challenging, but it has continued to execute and deliver the goods, despite some government-level lack of forethought. The regulatory environment has always been a pain for the food industry, and always will be. The pandemic is no different. Canadians should not underestimate how resilient our food industry is. Consumers may not always find what they want at times, but they will always find what they need at the grocery store. This is due to the work and effort of companies, and people willing to deal with whatever is thrown at them.
Now, a trucker convoy against vaccine mandates at the border has raised almost $800,000. The convoy will continue into next week. It blames news outlets for the collective “COVID-19 hysteria”, as it’s called. Truckers have every right to protest, but transporting goods is what we need them to do. The convoy itself is not likely to make much of a difference.
Meanwhile, Canadian consumers should know they will be fine. Operations across the supply chain are incredibly choppy right now, but they will continue to find what they need, albeit with fewer choices. Some of the choppiness is policy-induced, but it is what it is. Still, expecting perfection at the grocery store for the next little while would be unreasonable.