COVID19 update, April 27, 2020: Israel and Europe progress; worrisome signs in the US food supply chain; Bastiat and “non-urgent” healthcare

(1) Let’s have a quick roundup of the latest active cases data from worldometers (I’ll leave Israel to the last):

Germany’s active cases 39,794 are down to 55% of the peak value on April 4, 72,865. Switzerland is doing better still — 5,651 down from a peak of 14349 on March 31, or down to 39% of peak. Austria stands at 2,401, or down to 26% of its April 3 peak of 9,334. Norway’s graph has no info on recoveries (hence no useful info on active cases), but daily new cases are a fraction of their peak. Total dead are clearly nearing the top of the sigmoid at 201. Finland’s graph looks like a wild zigzag owing to intermittent reporting of recoveries — but seems to be trending the right way. Active case graphs in Spain, Italy, and France seem to indicate these countries are turning the corner — if they can prevent a second flare-up.

Belgium, however, is not out of the woods yet, nor are the Netherlands and the UK. Sweden looks murky, with active case numbers still climbing about linearly, but total deaths seemingly starting to level off. The US — overall looks pretty grim still, but if greater New York City were taking out of the equation, the rest of the country looks rather rosier.

As for Israel: our active cases have been dropping steadily since April 15, from a high of 9,808 to the present 8,511. Recoveries have exceeded new cases since April 16. The total number of dead has crossed the 200 mark, but the curve over time shows a clear sigmoid that appears to be close to leveling off. With 15,443 documented infections since the beginning of the crisis (of which 6,731 documented recoveries), our apparent “case fatality rate”, at 201/15,443*100% = 1.3%. However, keep in mind that Israel counts everybody who tests positive, whether they develop symptoms or not. Guesstimating about half of these to be asymptomatic, the true CFR may be closer to double that, while the true IFR (infection fatality rate) is certainly lower than 1.3%, as despite increased testing capability the country is sure to have a significant Dunkelziffer/stealth infection rate. (Do keep in mind Israel has a much younger population pyramid than the major developed countries — this alone accounts for our low number of severe cases. The stories of young and healthy people without pre-existing conditions getting severe COVID19 are “man bites dog” news, not significant shares of the patient population.)

Israel indeed has done something today that I can only hope the US is wise to do soonest: opened its hospitals and HMO policlinics for elective procedures. (A lot of “gray area” care is technically elective in that it doesn’t have to happen right this second — but any unnecessary delay will cause complications later.)

Finally, in India lockdown is to end May 3, but it’s getting rolled back already in some less-stricken locations.

(2) Rather more worrisome news from the US, with twin posts (here and here) reporting about food supply chain disruptions from the agricultural side of things. I reached out to a few people informed about goings-on, and the problems are basically threefold:

  • Choke points in the distribution chain were created by COVID19 outbreaks at meat processing plants (like Smithfield’s in South Dakota), which necessitated closure, sanitation, and reopening at reduced capacity. (At some processing plants, workers are also reluctant to show up.) Hence, farmers are stuck with hogs etc. and no place to have them processed.
  • Farmers whose chief outlet was to the large food service companies and institutional customers are now stuck with product they cannot unload, except at a loss. Their operational cash headroom is limited at the best of times;
  • Meanwhile, those who supply to the grocery chains see shifting demand. Dairy, for instance, is down. This has caused prices paid to farmers to drop to “below cost” levels.

There are second-order effects: corn growers who primarily supply pig farmers etc… And with oil prices down to historical lows, selling corn for ethanol is not practical. (Incidentally, while some farmer supplies (e.g., fuel) are cheaper, others go up in price because imported from, you guessed it…)

I doubt dire predictions of famine in the USA will come to pass (and dearly hope and pray they won’t). However, remember the USA is a major food exporter — and that it is likely to apply the maxim “the poor of my own city come first” in a serious food crisis. So major shortages in countries that are dependent on US food imports are increasingly likely. 

“Just-in-time” supply chains can normally respond smoothly to ordinary shifts in demand, and thus keep prices down for the end consumer. However, they are fragile to major disruptive events like COVID19. The old engineer’s maxim “better, cheaper, faster — pick any two” seems to have a supply chain counterpart: “cheap, just in time, robust: pick any two”. 

The social distancing measures in the USA (outside greater NYC,  and perhaps a few other congested metropolitan areas) have crossed the line from diminishing returns territory into doing more damage than they prevent — it is high time to return no normality. Scott Atlas MD definitely agrees.

(3) On a final note: Dr. Paul Hsieh quotes Bastiat about “the seen vs. the unseen [costs]” in the context of emergency care. (Bastiat’s classic essay expounding the concept of hidden costs and consequences should be required reading, not just for any economics student, but for every public servant and every elected official.) The number of COVID-19 deaths are in the public eye. The number of people dying from cardiac complications or ruptured appendicitis because they were unwilling to come to the ER for fear of contracting COVID19 (a phenomenon seen in Europe as well as the US) are not so obvious — but they are still there. This is without going into the urgency level one step below: cancer surgeries, non-emergency bypass surgeries,…

UPDATE: John Tyson, chairman of the board of Tyson Foods, weighs in on the company’s blog: “Feeding the nation and keeping our employees healthy”.

UPDATE 2: more about the MIT study on the NYC subway as “the mother of all super-spreader events”.

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