The Drive-Thru: Inside America's supply chain struggles, and everything else you need to know about coronavirus, restaurants, and retail

Hello!

Welcome to The Drive-Thru, BI's weekly newsletter covering everything you need to know about restaurants and retail. If you were forwarded this email, you can sign up here to get The Drive-Thru in your inbox every Friday, written by me, Kate Taylor, and my intrepid colleague Shoshy Ciment.

This week, we dug into some of the supply chain issues that are creating shortages. Read on for a three-part explanation for why farmers are killing baby pigs and tossing berries in a ditch as food banks and grocery stores face shortages.

Farmers dump milk and let berries rot as prices plummet

Farms are the first part in the supply chain. Farms are seeing excess products due to lack of demand from typical buyers. And lack of demand contributes to plummeting prices. For example, hog farmers say they are losing $37 on every pig they sell, making euthanizing the hogs a cheaper option.

So, farmers struggling in the face of absent workers, shuttered pork packaging plants, and a loss of buyers are considering killing baby pigs to cut losses. Dairy farmers are dumping milk. Driscoll's president Soren Bjorn told Irene that the company would let 10-15% of its crop "end up in the ditch" if the berry producer doesn't receive government funding.

Many farmers are hoping for funding to redirect excess goods — meant for restaurants, schools, and other bulk commercial buyers — to government food banks. But, even if that happens, other issues remain.

Here's our explainer for why food is being destroyed during a time of shortages.

Meat processing plants are shutting down, as workers catch coronavirus and die

Even if farmers find new buyers, workers throughout the supply chain are dying, forcing employers to make difficult decisions. Workers are the second part of this sad supply chain story.

In the meat industry, hundreds of workers have caught coronavirus. At least five Tyson employees at two different plants have died. A Sioux Falls Smithfield Foods processing plant in South Dakota has been connected to 644 coronavirus cases and one death.

Essential workers are dying across industries and at different points in the supply chain. Amazon internally reported its first warehouse-worker death from COVID-19 this week. At least 30 grocery store workers have died from COVID-19. A lack of a union or organized workers group makes it difficult to tally up the impact of the coronavirus on restaurant workers, but employees in Chicago and Los Angeles have filed OSHA complaints against McDonald's.

Employers have pushed back against calls to shut down businesses.

"The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply," Smithfield CEO Kenneth Sullivan said in a statement after the company closed a major pork plant on Sunday.

PLUS: Lawyers told me it will be close to impossible for most workers to hold employers legally liable if they get sick or die of COVID-19 due to their jobs.

Shortages continue in food banks and grocery stores

The third part of the crumbling supply chain story: shortages.

New York City food pantries have declared a state of emergency as they struggle to meet growing demand, with one-third of the city's food pantries shuttering.

Bethany reports that the New York City Mission Society said the organization needs roughly $1.4 billion in funding, and that food pantries are severely lacking in volunteers during the outbreak. Organizations like the American Farm Bureau and Feeding America are experimenting with ways to transport produce and dairy products to food pantries.

Shortages are also showing up in some stores. Irene has been keep track of where to buy items like meat and toilet paper.

Read about food pantries' state of emergency here.

Post-pandemic reopening plans and everything else you need to know about the coronavirus:

• I did a webinar on the impact of the coronavirus on the restaurant industry!
• Starbucks is preparing to reopen stores closed in coronavirus pandemic, predicting a return to normal operations in June.
• Hobby Lobby CEO said in a leaked letter that stores "will likely reopen gradually."
• Petco furloughs many employees but is still refusing to close grooming centers.
• McDonald's is asking franchisees to paid sick leave and a 10% 'hero' raise for workers, as franchisees ask for more financial assistance.
• Liquor stores are essential and business is booming, but workers are uneasy.
• Kroger pushes to classify its employees as first responders.
• Gold's Gym is closing more than 30 locations for good. Madeline has the list.
• Nearly 4,000 American breweries could be forced to permanently close in the next 3 months.
• Grocery and food delivery apps are increasingly crucial amid coronavirus, but these may be out of reach for the most vulnerable Americans.
• Analysts think new rules preventing Costco, Walmart, and Target from selling nonessential items are stupid.

A few happy stories

Congrats! You made it to the slightly less depressing side of coronavirus coverage.

• Americans are now panic-buying 'hair color' and grooming supplies at Walmart.
• People are wearing T-Rex suits to shop safely.