In late 2019, a novel coronavirus emerged in China that changed the world in a few short months. The global pandemic sparked by the worldwide spread of COVID-19 has led to devastating economic impact. Many countries, attempting to protect the health of their citizens, instituted nationwide lockdowns that affected industries and how people relate to one another and conduct business. In the United States, the health crisis exposed serious flaws in the U.S. supply chain,[i] but it is worth reviewing how this pandemic originated and actions taken to contain it to better understand supply-and-demand and supply chain issues.
In simplest terms, a coronavirus is a respiratory virus that affects birds and mammals. The resultant disease from a coronavirus has ranged from a large percentage of people being asymptomatic, to those who are symptomatic with mild to severe respiratory infections. The latter was illustrated by the devasting epidemic of 2002-2003, called the severe acute respiratory syndrome (SARS) epidemic, and the epidemic of 2015, called the Middle East respiratory syndrome (MERS) epidemic. The novel coronavirus first identified in December 2019 came to be known as SARS-CoV-2 or, but wrongly referred to as COVID-19.[ii] It is worth noting that SARS-CoV-2 is the “virus” and COVID-19 is the resultant disease or “COronaVIrus Disease – 2019”; coronavirus and COVID-19 are wrongly used interchangeably by media and the general population.
One of the first indications of how seriously China viewed COVID-19 came in January 2020, when Chinese authorities announced the first death from COVID-19 and made the decision to block most of the travel into and out of Wuhan, China, the city at the epicenter of the outbreak. By January 23, 2020 China began imposing strict lockdown measures in Wuhan. Although the World Health Organization (WHO) and many public health officials from countries around the world questioned the need for such drastic measures, many officials in late February 2020 came to accept that China’s actions may have given the rest of the world days or weeks to prepare as the outbreak spread.[iii] Sadly, the U.S. Department of Homeland Security stated in May 2020 that China likely engaged in an active coverup of the disease’s severity during the January 2020 timeframe to hoard as much personal protective equipment (e.g. gloves, masks, gowns, face shields, etc.) as possible.[iv] Around the same January 2020 timeframe, the first case of COVID-19 was confirmed in the U.S.[v] On January 31, 2020, President Trump declared a lifesaving Public Health Emergency under the provisions of the Public Health Service Act.[vi]
Europe was the next place to feel severe effects from COVID-19. In particular, Northern Italy experienced a rapid increase in cases and fatalities. By mid-March, COVID-19-related deaths in Italy surpassed 4,000 victims. Within the next week, Spain was experiencing similar numbers.[vii]
At the same time, COVID-19 was starting to spread across the U.S. and on March 13, 2020, the president upgraded the Public Health Emergency to a National Emergency under the Stafford Act and the National Emergencies Act. The upgraded emergency declaration authorized billions of dollars of funding to be used for emergency response and activated Federal Emergency Management Agency (FEMA) offices across the country to directly support their states and regions.[viii]
By the end of March 2020, COVID-19 cases spread to most of the world, causing a global pandemic. The international health crisis forced well over 100 countries to institute either full or partial lockdowns, and many more made national recommendations for travel restrictions.[ix] Most health experts agreed that the worldwide reaction worked in slowing, but not stopping, the spread of COVID-19. However, in addition to slowing the spread of the disease, international lockdowns and restrictions had an unintended impact on many aspects of society. As of July 2020, the world is still dealing with many of the unintentional consequences of decisions made based on recommendations by international health experts.
One of the first major industries to feel the impact of COVID-19 was the airline industry. During the last half of March 2020, the same period that lockdowns became widespread globally and many countries closed their borders to international travel, global airline traffic plummeted. During the final week of that month, air traffic was 63 percent lower than during the same period the previous year.[x] As a result of decreased demand and corresponding drop in ticket prices, the U.S. airline industry is expected to lose more than $113 billion over the next six years.[xi]
In order to assist global health authorities in slowing the spread of the virus, many companies around the world implemented work-from-home policies in mid-March 2020. Companies like JPMorgan, Twitter, Amazon, Google, and many others began encouraging, if not forcing, most of their employees to work from home.[xii] Colleges and universities sent students home. Bars, gyms, and other non-essential businesses were shuttered. Millions of workers now spent all day working, and eating, from home. Restaurant patronage plummeted and data from OpenTable, an online restaurant reservation service, suggests that during the first month of the pandemic, restaurant reservations in the U.S. dropped by more than 50 percent.[xiii] In the months since, those numbers have only become more grim for the restaurant industry.
The airline and food service industries are just two of the industries that have been tested due to the COVID-19 pandemic. The retail industry ground to a halt as stores were forced to close to protect public health. The global entertainment industry has ceased as movie theaters shut their doors and movie studios shut down film and television production. Professional sports leagues around the world stopped, many mid-season, and the International Olympic Committee made the decision to postpone the planned 2020 Summer Olympics in Tokyo. As people were staying home and fearful of the close confines of airline travel, airlines were forced to dramatically reduce flights, which caused global tourism and the countless support services to become virtually nonexistent.[xiv]
As corporations and industries around the world worried about uncertain futures, the supply chain within the U.S. was surprisingly exposed by a huge demand for toilet paper, as people feared lockdown orders would cut off their access to this commodity. This was particularly interesting because COVID-19 is a respiratory illness that affects the lungs, chest, and lower respiratory system. Like other coronaviruses, the most common symptoms of COVID-19 are fever and dry cough and other, less common, symptoms include shortness of breath, rapid breathing, or chest pain;[xv] none of which require toilet paper. Even as scientists were learning more about the effects of COVID-19, intestinal issues were never among the symptoms during the hoarding.[xvi] And yet in mid-March 2020, as the number of COVID-19 cases in U.S. continued to increase, and the threat of lockdowns started to become more real, there was a run on toilet paper.
As Americans began stocking their cupboards and pantries to prepare for whatever lockdowns their states were planning to establish, they bought toilet paper in record quantities. In fact, on March 12, 2020, the day before President Trump officially declared a national emergency,[xvii] toilet paper sales in the United States were 734 percent higher than the same day the previous year.[xviii] Some people weren’t concerned by the impending emergency; a Wall Street Journal editorial from March 22, 2020, scoffed at the idea that the United States was running out of toilet paper. However, by March 23, 2020, only 10 days after the president’s emergency declaration, toilet paper was completely out of stock at 70 percent of U.S. grocery stores, including online retailers.[xix] To a certain extent, it makes sense that people anticipated a higher need for home toilet paper because lockdowns meant more people would be at home more. Expectations were a 40 percent increase, but the U.S. population bought excessively more than they needed. During the nine-week period leading up to May 2, 2020, the U.S. population bought 71 percent more toilet paper than they had during the same period the previous year.[xx] This extreme uptick forced manufacturers into overdrive and yet Amazon (just one of the retailers attempting to deal with this problem) was left months behind on orders of toilet paper.[xxi] A couple of months into the pandemic, as the toilet paper supply chain struggled to right itself, another, potentially far more dangerous, supply-chain issue was starting to emerge.
By mid-March 2020, many companies around the world that had the ability to allow workers to work from home began to do so. Tech companies such as Apple led the way in allowing workers to work from home. Nearly a week before the U.S. president announced the national emergency, Apple’s leadership decided to transition most of its worldwide retail operations to online sales, and most of its worldwide office employees to begin working from home.[xxii] That strategy was fine for industries whose missions could be executed by employees working from home, but many industries didn’t have that ability.
For most consumers, grocery stores had to remain open to supply basic daily necessities. In order for those grocery stores to remain open, food processing facilities had to continue operations in order to keep grocery shelves stocked. On April 27, 2020, John H. Tyson, president of Tyson Foods, one of the largest suppliers of processed chicken and pork in the United States, took out an unprecedented full-page advertisement in The Washington Post. In the advertisement, Tyson wrote, “The food supply chain is breaking. We have a responsibility to feed our country. It is as essential as healthcare. This is a challenge that should not be ignored. Our plants must remain operational so that we can supply food to our families in America. This is a delicate balance because Tyson Foods places team member safety as our top priority.”[xxiii] For many who had been paying attention, Tyson’s declaration became an admission of something they feared had been coming. Between March and the publishing of Tyson’s letter, at least 13 food processing plants belonging to Tyson, Smithfield Foods, and others across the U.S. were closed as a result of workers testing positive for COVID-19.[xxiv] By June 9, 2020, 62 meat processing facilities across the U.S. had to either temporarily close or limit their operating capacity (although six had reopened) as a result of COVID-19.[xxv] Although these 62 facilities only represent a fraction[xxvi] of the processing plants in the United States, the problem Tyson warned about in his letter from mid-April started to become more clear.
The challenge of providing food to the country while trying to protect the health of your workers in the midst of a pandemic is a challenge for which the U.S. supply chain was unprepared. Even as Tyson defended his company’s response to COVID-19 and assured his workers and customers that they were doing everything they could to protect the workers, and by extension the food supply chain, he begged the government for help.[xxvii] The day after Tyson’s letter, President Trump invoked the Defense Production Act of 1950 and issued an executive order to keep the meat processing plants open to prevent shortages of meat.[xxviii] Under the executive order, the president affirmed that the meat processing industry is part of our critical infrastructure and closing plants could “quickly have an impact on the nation’s food supply chain.”[xxix]
Following a short period in June 2020 when much of the U.S. began to ease restrictions and reopen public venues like bars, restaurants, and gyms, the U.S. meat processing plants still remained under strain to maintain production levels, even as some of their factories were closing. Now by early July 2020, states like California and others have reacted to greater COVID-19 case rates by re-imposing restrictions and re-closing bars and other nonessential establishments. With these changing conditions as a backdrop, overall, the number of meat processing plants that have closed or reduced production is less than 1 percent of the total number of meat processing plants in the U.S. This implies the rest of the plants should only have to pick up the 1 percent of the slack, but that is not necessarily true. The problem is that not all meat processing plants are created equal. According to Jayson Lusk of Purdue University, 60 percent of all hogs go through the top 15 plants and 60 percent of all cattle go through just 10 plants.[xxx] Of the 62 processing plants closed by COVID-19, if just four of them had been among these top 25 plants, that could represent as much as a 25 percent reduction in beef processing or a 16 percent reduction in pork processing. In fact, one of the plants closed on April 12, 2020, due to COVID-19, was the Smithfield Foods Inc. in Sioux City, S.D. This single plant, which is one of the largest in the country, processes nearly 18 million servings of pork per day, representing 4-5 percent of U.S. pork production.[xxxi]
The problem isn’t a lack of cattle, hogs, and chickens. The problem is getting the animals processed and packaged for market, and as such the processing facilities represent a bottleneck. There is an ideal point during the lifespan of livestock where it must be sent to a processing plant and turned into packaged cuts of beef, pork, or chicken, as seen in the market. If that point is missed because of a shortage in processing plants, then the resultant meat will be less desirable by consumers due to subtle changes in taste, texture, and toughness based on the older animals or change in feed.[xxxii] One option to prevent this is for the processing facilities to perhaps package larger cuts of meat, which would allow them to process the same amount of livestock with fewer workers or using fewer plants. Such an action would force customers to accept what they find in the market aisles such as larger packages and/or larger cuts of meat.[xxxiii] Processing facilities’ ability to adjust their operations and the U.S. population’s ability to be flexible with their expectations will help ensure that current issues with the food supply chain will remain only a disruption and not a complete shutdown.
Seemingly in an attempt to reassure the public, while at the same time confirming the supply chain is experiencing issues, the U.S. Department of Agriculture (USDA) posted on their website: “There are no nationwide shortages of food, although in some cases the inventory of certain foods at your grocery store might be temporarily low before stores can restock.”[xxxiv] Other experts outside the government sector agree that the United States is probably not going to run out of meat, but that doesn’t mean we shouldn’t be concerned.[xxxv]
From toilet paper to meat, the COVID-19 pandemic has revealed the delicate balance between supply and demand, and the fragility of the U.S. supply chain. This revelation leaves the U.S. with both lessons learned and ways to better prepare for future threats to our supply chain, threats as imminent as second or third waves of the COVID-19 pandemic, which are possible in the months ahead.
The authors are responsible for the content of this article. The views expressed do not reflect the official policy or position of the National Intelligence University, the Department of Defense, the U.S. Intelligence Community, or the U.S. Government.
About the Authors:
Scott C. Hetzel, Major, United States Army, is an active duty Intelligence Officer and recent graduate of the National Intelligence University in Bethesda, Maryland. MAJ Hetzel has 17 years of experience in the United States Intelligence Community having served as a Human Intelligence Collector, an All-Source Intelligence Officer, and an Imagery Officer. As an Intelligence Officer, he has supported military units in Iraq, the Philippines, Japan, and across Europe. MAJ Hetzel holds a Bachelor of Arts in Education from the University of West Florida and a Master of Science in Strategic Intelligence from the National Intelligence University.
Mitchell E. Simmons Ph.D. MSA MSME, Lieutenant Colonel, United States Air Force (Retired) is the Associate Dean for Academic Affairs & Program Director in the School of Science and Technology Intelligence at the National Intelligence University in Bethesda, Maryland. Dr. Simmons teaches courses in Intelligence Collection, National Security Policy and Intelligence, and Infrastructure Assessment Vulnerability. He has over 25 years of experience in acquisition, engineering, and infrastructure vulnerability within and supporting the Intelligence Community. His expertise includes physical and functional vulnerability of hardened and deeply buried targets and critical infrastructure from traditional and asymmetric threats such as infectious diseases. Dr. Simmons holds a Bachelor and Master of Science in Mechanical Engineering from Ohio University, a Master of Science in Administration from Central Michigan University, and a Doctorate in Engineering Management from The Union Institute and University.