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Northeast Iowa | Distribution issue. If people make a run on inventory at retail outlets, you don't just suddenly find 2, 3 or 4x as much of it to bring back on the next load to restock. Think of how many trucking jobs were available before Covid-19. You can't suddenly make haulers work 24 hours a day delivering milk if the store needs three times as much as normal and you didn't get three times as many drivers and trucks on short notice. If the plant can't get product delivered, you can't throw it in a pen with some portable gates and hold onto it a bit longer like you could with livestock.
The other issue is child care. When schools close, not everyone has grandparents they can send their kids to, so the parents can keep working. Both parents work in a lot of families. So maybe the staffing at the milk plant doesn't run 100% when some are at home taking care of kids that would normally be at school. Inventory demand tells them they need 125 or maybe 200% of normal output at the milk plant to keep up. Suddenly they're down to 65% staff, or maybe only drop to 90% and that's still tough to make work. Just-in-time inventory doesn't work with huge surges in demand like we've had the last two weeks. It works itself out eventually, but it's not always pretty in the meantime. | |
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It don’t add up...
