Travel restrictions for workers in China related to coronavirus (COVID-19), along with work stoppages, have resulted in supply chain disruptions there and in the U.S.

The good news is that those close to the situation say the resulting disturbances are beginning to show signs of easing.

COVID-19 emerged in China at a time when factories there were shut down for the Lunar New Year. As a result, stockpiled products were already in limited supply.

Compounding that was the fact that U.S. buyers had cut back or held off on placing orders in late 2019 due to what was anticipated to be declining prices in the first quarter of the new year.

China's Wuhan province, where COVID-19 was first detected, is home to a number of chemical plants that manufacture the world's supply of animal and human vitamins as well as some amino acids. It also is a major hub for rail and barge traffic into and out of China. With factory workers not able to report to work, production, warehousing/distribution and shipping quickly came to an unexpected halt.

In late January, suppliers in the U.S. started notifying customers that product supplies were tightening and unknowns emerging around future supply availability. For the U.S. feed and feeding industries, the last four to six weeks have meant limited supplies of certain vitamins and amino acids, with many having to tap reserves.

In order to determine the extent of the supply disruption and where things currently sit, Feedstuffs surveyed nearly a dozen feed manufacturers, premix manufacturers, feed ingredient companies, nutritionists/consultants and livestock/poultry producers. The companies were representative of all species.

Reporting the most disruption from the COVID-19 stoppages were U.S. premix manufacturers. In an effort to ensure continued product availability, they reported limiting sales to only their existing customers and allocating product based on previous sales volumes.

Feed manufacturers and livestock/poultry producers indicated that they have not yet had to make significant ration adjustments on their end. One feed manufacturer did note, though, that price adjustments may be needed if the situation lasts much longer.

Predictions from premix manufacturers are that supply channels are starting to loosen, for the most part, and that product is starting to flow out of China.

On average, it takes two-and-a-half to three weeks for shipment between China and the U.S. The earliest delivery times given by survey respondents were the end of March/early April. Still, others said they thought it would more likely be May before vitamins and amino acids out of China start arriving. In terms of when things will get back to normal, the general estimate given was June/July.

Like feed manufacturers, several livestock/poultry producers contacted said they had largely not experienced any shortages or cutbacks in vitamins or amino acids during February. Adjusting formulations downward to stretch the supply of vitamins and amino acids was noted as a recommendation to reduce their use or lower input costs.

Supply contracts did seem to be a benefit when securing needed product/inputs. Those with contracts in place indicated that they had little difficulty securing product, while several without supply contracts did report sporadic problems. There also has been quite a bit of monitoring on the part of suppliers to keep buyers from stockpiling or securing product for others.

One livestock/poultry producer noted that his supply co-op membership has been greatly beneficial at this point in time.

Those products seeing the greatest supply situations are vitamins A and E, biotin, thiamine, folic acid and calcium d-pantothenate. In regard to amino acids, lysine and threonine supplies have been affected, in some cases.

From a price standpoint, the reports varied widely, with prices doubling or tripling for some vitamins. One report had vitamin B up tenfold and vitamin A up two-and-a-half-fold.

Even with the indication that supplies are likely starting to flow out of China, a concern remains in the U.S. that if more cases of COVID-19 surface, similar challenges related to moving product could result. If the situation becomes severe enough, it was suggested that feed mills and packing plants could be shut down.

Higher prices also are a concern, given the low margins of the feed industry. “Some feed companies are not able to take on more debt,” one respondent said.

If COVID-19 cases and deaths continue to mount domestically, a possible rationing of dust masks, antibiotics, amino acids and vitamins could become a reality, it was noted.

A ban on U.S. exports as a result of COVID-19 stoppages domestically could also have negative ramifications, as it has in China.

“Hopefully, from all of this, the U.S. will become more self-sufficient,” one producer said.