Tuesday, October 13, 2020

econlife - The Great Lid Shortage of 2020 by Elaine Schwartz

Perhaps reflecting its necessity, wartime canning was most mentioned in books during 1942. But because this Google Ngram end date is 2019, we cannot see what surely would be an upswing for 2020:

Stuck at home because of the pandemic, people have been planting their own gardens and then pickling the peppers and preserving the peaches. They are canning tomatoes and making blackberry jam.

However, canning’s recent popularity has created a problem.

The Lid Shortage

Soaring seed orders were the first clue that a canning surge was imminent. Ball, the go-to company for canning supplies, says a lot of its items are on back order. A hardware firm in Kidron, Ohio reports a 600 percent pop in canning category sales.

Canners know that jars can be repeatedly refilled. But, since lids cannot be reused, in 1975 and now, there have been shortages.

Forty-five years ago, shoppers responded to rising food prices by doing more canning. In many parts of the country canning kits were available. However, in rural areas like Fayetteville, Arkansas and Whiteville, North Carolina, women wanted to reuse their old jars. That meant they only needed the lids that local stores had run out of. A 1975 NY Times article reports that the House Small Business Committee even scheduled hearings and concluded that there was no hoarding conspiracy.

Instead, the problem was and is supply inelasticity.

Our Bottom Line: Supply Elasticity

In 1975, even with 24/7 production churning out 6.2 million lids a day from 3 major suppliers, there was a lid shortage. I suspect we have the same phenomenon today.

Given short notice, supply cannot stretch. Called supply inelasticity, producers are constrained by their land, labor, and capital. For all three factors of production to increase within weeks is usually impossible. The quantity supplied responds minimally to more demand and even higher prices because in the short run, supply is inelastic. It takes time to add more land, labor, and capital.

I’ve copied this illustration of supply inelasticity from my textbook, Understanding Our Economy:

So, if someone you know needs a lid, just explain he will have to wait a bit for supply to become elastic.

My sources and more: Thanks to NPR’s “Weekend Edition” for alerting me to the lid shortage. From there, I discovered more in The Washington Post and in this 1975 NY Times article.

Our featured image is from The Washington Post.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.