The argument I have seen is that since restaurants closed, demand for food is down. I understand how demand being suddenly lower could disrupt supply. What I don't understand is why demand is down. I mean, people still need to eat just as much as they did before the coronavirus. What is going on here?
This question is too open-ended, as it does not even specify a country. There are a number of issues that have shown up. These comments are based on my reading of news stories, and arguably not authoritative.
- Logistics have been disrupted, putting shipping, planting, and harvesting at risk. This is a worry for countries that are dependent upon food imports.
- Some countries have put into place export restrictions (as a results of the previous concern).
- In the developed countries, a significant portion of eating is at restaurants. The supply chain for restaurants is different than grocery stores. There are two issues: people eat different foods at home than restaurants (The example I heard was that most fish is eaten at restaurants in the United States, so there is a surplus of fish.) People have more time, and are baking more now than even during the seasonal peak at Christmas. In addition to the supply chains being different, the sizing and labelling is different (e.g. nutritional information must be displayed on grocery store food, and so a waiver had to be given to allow food without such labels to be sold). Flour is sold in 80 pound bags to restaurants, and households cannot work with such bags. (At my store in Canada, flour is being sold in small generic plastic bags.)