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ASCM Insights

Food Insecurity Continues Amid Ongoing Disruption

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We’ve all experienced the rising costs of essentials over the past year. Grocery store receipts are bigger than ever, the joy of summer travel was dampened by the cost of filling our gas tanks, and people have rushed back to restaurants only to find that their bills significantly top previous years. Of course, every price increase comes from somewhere. The war in Ukraine has reduced the amount of grain the country can harvest and export; sanctions on Russia continue to increase demand and contribute to higher gas and oil prices; and many countries are experiencing record-setting inflation. Interestingly, through all of this, consumers are shelling out even more for one food staple in particular: eggs.

In California, the average price for a dozen eggs this past week was a jaw-dropping $7.37, three times that of a year ago, the Washington Post reports. The average price for a carton across the nation was $3.59, up from $1.72 last year. It’s no surprise #eggs is trending on Twitter. And experts say egg prices will likely continue to rise throughout the first quarter of 2023.

Part of this is being fueled by extremely high demand, as more and more people scramble to replace beef and pork with healthier and cheaper forms of protein. Plus, eggs are hard to beat around the holidays and in the winter, with so many families cooking and baking. Meanwhile, supply is down in many parts of the world. For instance, new regulations on humane conditions for chickens in New Zealand have significantly reduced supply. Large numbers of residents have taken matters into their own hands and bought backyard chicken coops. The reaction is so pervasive that the government is pleading with New Zealanders to lay off buying chickens for their eggs, noting that the cages are detrimental to bird health and remarking that chickens are not “egg machines.”

Most devastatingly, a particularly bad strain of the avian flu has led to the deaths of approximately 58 million birds in the United States alone, 43 million of which were egg-producing. Japan is also facing an avian flu; so far, the country has culled more than 10 million chickens, ducks and ostriches. To put this in perspective, the previous largest avian flu outbreak, in 2015, was described by the USDA as “arguably the most significant animal health event in U.S. history,” but it killed 10 million fewer chickens. The restocking and lost future production for that event ended up costing approximately $3.3 billion.

Getting food to those who need it

Everyone has the right to healthy, consistently available and affordable food. The price of eggs isn’t just a budget problem; it’s a sign of how tightly connected our supply chains are with the people we serve. Even though there’s enough food on the planet for everyone, 10% of people are food insecure, according to the humanitarian organization Action Against Hunger.

The solutions to these supply chain problems are out there; they just need to be identified via research, innovation and ongoing learning. This is a critical time to keep up with both your team’s and your own supply chain expertise. Find out how your network rates against industry peers with the Resilient Supply Chain Benchmark, created by The Economist Intelligence Unit and sponsored by ASCM, and assess your own resilience-building capabilities.

Additionally, effective supply chain planning — including for a sustainable food supply — hinges on accurate measurement and understanding of the stresses that exist within a network. The KPMG Supply Chain Stability Index, in association with ASCM, illuminates challenges and where they originate, helping users predict supply chain fragility up to three months ahead. Access these ASCM resources today and begin hatching a plan to prevent major food crises before they start.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted at abe@ascm.org.

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