Why are Warehouses loosing storage?

This affects food and fuel. Your troops will consume food and fuel (fuel for vehicles and food for the others) and when you have lots of them they will consume more than you can produce. So you will have negative production.

But the game will set a minimum that you will not drop below so you do not run out. below this point the consumption stops. Just keep your food and fuel rewards in the items store until you need to use them and use up any excess food and fuel in the warehouses for upgrades, training and research when you have it.