DENVER, CO – Concerns over demand-destruction due to the coronavirus pandemic and corresponding economic shutdown, are now giving way to worries over the global supply chain bottlenecks affecting almost every industry both in the United States and abroad.
According to a quarterly update from CoBank, “supply chains are arguably in the most dire condition since the start of the pandemic, as lead times for manufacturing inputs recently reached record highs.” In addition, “persistent supply chain disruptions and labor shortages are adding significant costs to business operations, and consumers will feel these effects through higher prices for months to come.”
Dan Kowalski, Vice President of CoBank’s Knowledge Exchange Division explains that even though the latest producer price index data was 20 percent higher in August and the consumer price index is also 5.2 percent higher, higher costs related to the bottlenecks will lead many businesses to increase prices on store shelves.
Not everything has to be done at home as exports are expected to remain strong. China is expected to buy more from the U.S, at least in value numbers as USDA projects total purchases by the Chinese to increase by almost 10 percent, year-over-year, to $39 billion.
(SOURCE: All Ag News)
