A quarterly report from CoBank suggests that while the U.S. economy is still very much in the grips of the pandemic. 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. Persistent supply chain disruptions and labor shortages are adding significant costs to businesses and consumers.
A CoBank researcher suggests, “Supply chain snarls are likely to persist well into 2022, and so will elevated inflation.” Rapidly rising input costs and product shortages are hitting agriculture, as commodity prices have flattened, and inflation compresses margins. However, robust exports have kept much of agriculture in the black. CoBank says corn, soybean and wheat prices declined from their third-quarter highs, but will likely rebound due to tight supplies and improving demand. Returning demand from foodservice led to strength to U.S. meat and poultry. However, inflation is expected to test consumers’ appetite for meat during the fourth quarter.