During the pandemic, processed foods and other essential products frequently ran out at retail stores while disruptions in production and the supply chain lead to weakness in their underlying spot commodities markets causing negatively related consumer and producer price inflation. In addition, the correlation between retail stockouts of processed goods and the futures basis of the raw material input commodities was positive for most of 2020, while the theory of storage predicts a negative relationship. To understand these findings, we provide a theoretical model in which severe labor shortages lead to contango in the futures market for raw materials, which in turn, influences consumers’ hoarding decisions. Our model exhibits an efficient ‘no hoarding’ equilibrium as well as an inefficient ‘hoarding equilibrium’, depending on the commodity futures’ slope. The hoarding equilibrium can arise in a period of dropping wholesale prices, and exhibits rising consumer prices.