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Philadelphia, PA (CNN) The free food delivery that arrives at Beth Greenlee’s door each week is much more than an endpoint of the US supply chain. It’s her lifeline.

The 61-year-old has Stage 4 endometrial cancer and little income. For eight months, she’s been relying on food from MANNA, a non-profit that provides free meals to more than 1,200 of the sickest people in Philadelphia.

“I’ve even gained a few pounds in spite of my illness,” Greenlee said. “God only knows how thankful I am for the meals.”

But a crisis looms at MANNA. Their food costs are up 40%, they say, and by December they’ll likely have to stop taking on new clients — maybe hundreds of them.

“That will break our hearts,” MANNA CEO Sue Daugherty said. “But we could not have planned for this in a million years.”

As families across the country deal with wide ranging impacts of the congested supply chain — from delayed furniture to rising car prices — others are facing a more acute problem: finding enough to eat.

A survey published in September by Impact Genome and The Associated Press-NORC Center for Public Affairs Research found 23% of Americans experienced food challenges in the past year, with 37% receiving some type of food assistance from non-profits or the government.

Right now, schools and non-profits are dealing with food supply price hikes and shortages.

Experts say there’s plenty of food out there, but with cargo ships backed up, manufacturers are missing materials. And shortages of labor and truckers are making it harder and more expensive to package food products and transport them where they need to go.

Consumer prices are rising at the fastest 12-month pace since 2008. The amount of products that were out of stock online is up by 172% when compared with January 2020, according to Adobe Analytics.

Food banks nationwide are facing a drop in donations.

“What we see is our food banks having to increase purchasing, which of course costs them a whole lot of money to get the food that they need for their communities,” Feeding America COO Katie Fitzgerald said. “Even donated food is being reduced because of the increased cost of food. So, for instance, manufacturers are able to give us less because they can sell that food on the secondary market, because of its increased value.”

At El Pasoans Fighting Hunger, a large food bank in El Paso, Texas, demand has quadrupled since the start of the pandemic. Now, truckloads of food just aren’t showing up to their desert community.

“We are struggling every day to find adequate supply,” CEO Susan Goodell said. “We are entirely dependent on manufacturers, suppliers, brokers, retailers, etcetera. So at the end of the day, we do not control our destiny when it comes to how much food is actually available.”

The Texas food bank is already dealing with a labor shortage, which forced it to close three of its five locations, making some families drive long distances to get their food.

In Philadelphia, the supply at the Mission House is the lowest it’s been during Annette Glover’s 27 years running the food pantry. Her concern is shifting to Thanksgiving, with the price of turkeys spiking and donations stalling.

“The biggest fear is that we [don’t] have enough food to feed the people,” she said. “If they don’t come in, I’ll use my money to buy them turkeys to have a good Thanksgiving and Christmas.”

Supply chain problems have hit schools too, with food deliveries constantly delayed or canceled.

In June, the grocery vendor for the School District of Philadelphia abandoned them, citing the supply chain and a worker shortage. The district’s orders have been unpredictable all year.

“It’s actually vendors not producing products,” said Amy Virus, the district’s Manager of Administrative and Support Services. “We are really working behind the scenes to make sure we have something for the menu for students to have.”

Their schools are missing different items each week. Right now, they’re running out of paper trays. The district is making daily menu changes, even with their food staff down more than 20 percent.

The district insists the quality and quantity of their meals has not changed. But Stefanie Marrero started packing lunch for her four kids over concerns about their nutrition.

“They’d come home every single day hungry and wanting a full meal as soon as they walked in the door,” Marrero said, adding that the lunch packs have become a financial burden for her family.

A nationwide school problem

School districts nationwide are facing the same supply problems.

“Our vendors don’t have enough labor to produce all the food and supplies we’ve ordered, and distributors don’t have enough truck drivers to get the goods to us,” School Nutrition Association President Beth Wallace said. “So our school nutrition professionals are having to go to great lengths to get healthy food on the tray for all of our students each day.”

Cincinnati public schools are missing up to 20 food items each week. Schools in Denver can’t find enough milk. And Dallas public schools are adding more finger foods, like chicken tenders, because they can’t get enough utensils.

In Prince George’s County, Maryland, the public school district, citing the supply chain, canceled take-home suppers, which largely benefit children from low-income families.

Oscar Rivera has two sons in the district, and he’s currently unemployed. His family is now spending more on groceries and turning to food banks to put dinner on the table.

“We can no longer say ‘we’re going out to have fun’ because we need to buy food first,” Rivera said through an interpreter. “Food is the most important thing there can be in a home. Toys don’t matter, going out doesn’t matter, but food does matter.”

The US Department of Agriculture is sending $1.5 billion to schools to combat the food shortages. The government is also granting waivers allowing schools to find quick substitutes when more nutritious food products are not available.

Still, districts are reporting increased food budgets. That includes Philadelphia, where the added spending hasn’t bought stability.

“I do have a few sayings in my office and that’s one of them: ‘what is the crisis this week’,” said Amy Virus, of the Philadelphia school district. “We’re getting good at it, but it’s really a grind and we need some stability in the supply chain.”

CNN’s Matt Egan contributed to this report.

Source: https://www.google.com/amp/s/amp.cnn.com/cnn/2021/10/28/politics/supply-chain-foodbanks-schools-hungry/index.html


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By Anneken Tappe, CNN Business
Updated 1056 GMT (1856 HKT) October 27, 2021

New York (CNN Business)From supply chain chaos to worker shortages, America’s economic recovery ran into some serious challenges in the third quarter of the year.

Economists polled by Refinitiv expect that between July and September America’s economy grew at the slowest pace since the recovery began — an annualized rate of 2.7% — and a massive step down from the 6.7% rate in the spring.
At 2.7%, the pace of US gross domestic product growth, the broadest measure of economic activity, would pretty much be where it was before the pandemic. The growth rate in the third quarter of 2019, for example, was 2.8%.
So it’s not … terrible. It’s just bad news by recovery standards.
But the Federal Reserve Bank of Atlanta’s GDPNow model looks even more dire, projecting an annualized growth rate of only 0.5% in the third quarter.
“Supply chain bottlenecks sharply curtailed activity last quarter despite the massive stimulus spending,” said economists at Action Economics.
For the Biden administration, it means the White House and lawmakers have their work cut out for them to get the recovery back on track.
Washington said it will work with ports to resolve shipping backlogs, which sounds promising, but right now some $24 billion worth of goods are still floating on container ships outside the ports of Los Angeles and Long Beach.
Shortages everywhere you look
The supply chain crisis is a problem everywhere. Factories are waiting for materials and parts and consumers are standing by for finished products as prices continue to soar. US industrial production declined in September by 1.3% as manufacturers struggled with shortages of materials and qualified workers.
Over time, the supply chain gridlock should ease — or at least that’s the hope. But there is also a labor shortage holding companies back.
US job openings spiked to a record 11.1 million in July as companies across sectors were looking for staff to help meet the surge in consumer demand. Restaurants, many of which had to furlough their staffs, have had a hard time getting enough workers back, while manufacturers in particular are complaining of a lack of skilled laborers.
America’s workers are in hot demand, but many are still struggling with care responsibilities of their own and the risk of contracting the virus. Those millions of unfilled jobs also mean that workers can afford to wait until they find a good opportunity. In response, many companies are raising wages to attract potential employees.
Nervous consumers
Rising wages are definitely good for consumers, but Americans still had lots of other things to worry about in the third quarter.
For one, the more infectious Delta variant of the coronavirus hurt consumer sentiment, sending the indicator to its lowest level since December 2011. The renewed rise in infections temporarily hurt customer’s willingness to be around strangers at restaurants or in airplanes.
Meanwhile, inflation kept hitting new highs. In June, July and September, consumer price inflation stood at 5.4% year-over-year, a 13-year high. Another inflation measure, the price index that tracks consumer spending, rose to 4.3% year-over-year in August — a 30-year high.
Rising prices haven’t deterred consumers — at least so far. But there is worry that prices could eventually rise high enough that Americans would start closing their wallets.
Tuesday’s consumer confidence data for October suggests this still hasn’t happened and consumers are still happy to spend — good news for the fourth quarter.
“We expect a return to form for the American consumer in the final quarter of the year,” said Joe Brusuelas, chief economist at RSM US.
In fact, the hope for a robust holiday shopping season might already have helped with GDP growth in the third quarter: “The major catalyst for growth during the third quarter will almost certainly be a strong period of inventory building ahead of the traditional holiday shopping season,” Brusuelas said.


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PUBLISHED MON, OCT 18 20216:28 AM EDTUPDATED TUE, OCT 19 20213:18 PM EDT
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Thanks to the rollout of coronavirus vaccines, the global economy is slowly starting to emerge from the pandemic.

But Covid-19 has left one very destructive economic issue in its wake: disruption to global supply chains.

The rapid spread of the virus in 2020 prompted shutdowns of industries around the world and, while most of us were in lockdown, there was lower consumer demand and reduced industrial activity.

As lockdowns have lifted, demand has rocketed. And supply chains that were disrupted during the global health crisis are still facing huge challenges and are struggling to bounce back.

This has led to chaos for the manufacturers and distributors of goods who cannot produce or supply as much as they did pre-pandemic for a variety of reasons, including worker shortages and a lack of key components and raw materials.

 

Different parts of the world have experienced supply chain issues that have been exacerbated for different reasons, too. For instance, power shortages in China have affected production in recent months, while in the U.K., Brexit has been a big factor around a shortage of truck drivers. The U.S. is also battling a shortage of truckers, as is Germany, with the former also experiencing large backlogs at its ports.

Read more: As the U.K. battles food, fuel and labor crises, Boris Johnson promises change

Situation ‘will get worse’

Unfortunately, experts like Tim Uy of Moody’s Analytics say that supply chain problems “will get worse before they get better.”

“As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner,” Uy said in a report last Monday.

“Border controls and mobility restrictions, unavailability of a global vaccine pass, and pent-up demand from being stuck at home have combined for a perfect storm where global production will be hampered because deliveries are not made in time, costs and prices will rise, and GDP growth worldwide will not be as robust as a result,” he said.

“Supply will likely play catch up for some time, particularly as there are bottlenecks in every link of the supply chain—labor certainly, as mentioned above, but also containers, shipping, ports, trucks, railroads, air and warehouses.”

Supply chain bottlenecks — congestion and blockages in the production system — have affected a variety of sectors, services and goods ranging from shortages of electronics and autos (with problems exacerbated by the well-known semiconductor chip shortage) to difficulties in the supplies of meat, medicines and household products.

Amid higher consumer demand for goods that have been in short supply, freight rates for merchandise coming from China to the U.S. and Europe have soared, while a shortage of truck drivers across both the latter regions has exacerbated the problem of getting goods to their final destinations, and has led to high prices once those products hit store shelves.

The pandemic has only served to highlight how interconnected, and how easily destabilized, global supply chains can be.

At their best, global supply chains lower costs for businesses, often due to reduced labor and operating costs linked to the manufacturer of the products they want, and can spur innovation and competition.

But the pandemic has highlighted deep fragilities in these networks, with disruption in one part of the chain having a ripple-down effect on all parts of the chain, from manufacturers to suppliers and distributors with disruptions ultimately affecting consumers and economic growth.

Supply chain crisis hits growth

As economies get back on their feet, the supply chain crisis has come to the fore as one of the biggest challenges governments now face. Covid-weary citizens are eager to spend again but are finding goods either absent or much more expensive.

The issue is now looming large ahead of Christmas, too, and last week, White House officials told Reuters that Americans could face higher prices and sparser shelves this festive season with the Biden administration trying to alleviate blockages at ports.

Read more: White House plan aims to help key West Coast ports stay open 24/7 to ease supply chain bottlenecks

China and Europe are also experiencing growth problems on the back of supply chain issues. On Monday, China reported its third-quarter GDP grew a disappointing 4.9% from the previous quarter, as industrial activity rose less than expected in September (increasing by 3.1% below the 4.5% expected by Reuters)— with supply chain issues contributing to the slowdown in activity.

“Manufacturing was hit hard by supply chain disruptions due to Covid as some port operations were hit in the third quarter of 2021, and chip shortages continued in the quarter,” Iris Pang, chief economist of Greater China at ING, noted Monday.

She said that “supply chain disruptions are expected to last as freight rates are still high and chip shortages are still a critical issue for industries like equipment, automobiles and telecommunication devices.”

Last week, Germany’s top economists warned that “supply bottlenecks will continue to weigh on manufacturing production for the time being” and were likely to hamper growth in export-oriented Germany, Europe’s biggest economy.

Earnings impacted

Experts note that earnings are already starting to show the impact of the supply chain crisis. Invesco’s chief global market strategist, Kristina Hooper, noted last week that “supply chain fears are brewing with a number of U.S. companies flagging up warnings about rising costs related to supply chain disruptions and potentially lower earnings.

Hooper believed some of the factors contributing to supply chain issues, such as the labor shortage, will be worked out sooner than others. But she said the problem could have longer-lasting effects on some sectors.

“No matter where companies are, they are likely experiencing supply chain disruptions, higher input costs and some issues sourcing labor,” she said in a note last Thursday.

“However, some companies will be far more impacted than others. … A rise in cost will generally have the greatest impact on low-margin companies, which tend to be found in sectors such as transportation, general retail, construction and autos. Companies that should be least impacted are those with wide profit margins, limited raw material costs and small workforces. That should include growth sectors such as tech and health care,” she said, adding that “unfortunately, those sectors’ stock prices may temporarily suffer as bond yields rise.”

“Financials may be the standouts in this environment, especially as these companies would welcome higher yields. Another differentiating factor may be how much investment companies have made in technology to increase productivity.”

Hooper noted that some shortages, of semiconductors in particular, could improve soon, with projections for a return to normal levels of production by the second quarter of 2022. “However, more general supply chain disruptions are likely to continue in the shorter term, especially if there are additional Covid waves,” she added.

“In general, supply chain disruptions and higher input costs seem likely to be relatively transitory. … And so, for me, I’ll be paying close attention to this quarter’s earnings season, but I’ll be most concerned about companies’ guidance for the fourth quarter and beyond — especially how long they expect these conditions to last,” she said.

Source: https://www.cnbc.com/2021/10/18/supply-chain-chaos-is-hitting-global-growth-and-could-get-worse.html