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"Experts Are Warning That Empty Shelves &
Food Shortages Are Going To Continue For Many Weeks To Come"
by Epic Economist
"The talking heads on the mainstream media have been throwing around the term “return to normal” quite a lot these days, but industry experts are telling us that our current problems are likely to persist for a long time. When we really stop to think about it, is it truly possible for things to ever return to the way that they were before the health crisis came along?
From an economic standpoint, an unprecedented amount of damage has been done over the past two years, and the consequences of that are going to stay with us for at least a few more years in the best-case scenario. We actually have an endless list of major problems plaguing our supply chains and making thousands of critical operations a whole lot worse. Our system is in a state of utter chaos, and this is causing some very painful shortages.
For a long time, the media has been insisting that shortages and supply chain problems would soon be gone, but now they’re being forced to admit the truth. Even NPR has recently published a major story about the widespread shortages sweeping across this country. The article says that “grocery store shelves are bare again, conjuring bad memories of spring 2020 for many”. What’s even more concerning is the impact of the new surge of infections on our food supply chain. The highly contagious new variant is undoubtedly one of the biggest stressors on the food industry today.
Across the West Coast, growers of perishable produce are paying almost triple pre-outbreak trucking rates to ship things like lettuce and fruit before they spoil, said Shay Myers, CEO of Owyhee Produce, which grows a wide range of produce, including onions, watermelons, and asparagus along the border of Idaho and Oregon. He revealed that he has been holding off shipping some items to retail distributors until trucking prices go down. On top of that, recent snow and ice storms that snarled traffic for hours also delayed food deliveries destined for grocery stores and distribution hubs. Unfortunately, the problems interrupting the industry’s operations are not going to be cleared up any time soon. One supermarket CEO is warning that supply chain disruptions will continue to be a major headache for his company for at least the next month.
That’s to say when consumers are lucky enough to find the items they need, the prices are simply absurd. Last month, the Bureau of Labor Statistics reported that consumer prices already jumped by 7 percent, the biggest increase since 1982 - with the price of cereal up 6 percent, bacon up 19 percent, steak up 21 percent, and eggs up 11 percent.
This means that if our supply chain problems persist for many months to come, prices will go even higher. Analysts at Deutsche Bank are now projecting bottlenecks to last until the end of the second quarter. “For 2022, we expect supply pressures to likely linger for longer, until the second half of next year before gradually unwinding,” they wrote in a note last Tuesday. But they also seem to be assuming that conditions will “return to normal” eventually.
It would be great if that did happen, but as Wolf Richter highlighted, the industry has desperately been trying to “return to normal” for quite a long time: “Grocery stores have been trying to stock up for 22 months now, to fill the holes and catch up with this historic surge in demand, but every time they make a little headway, new constraints and problems emerge, and they still don’t have enough inventory on hand to get over the hump, and they temporarily and sporadically run out of some items,” he wrote.
What no one is really willing to admit is that our supply chains will never fully return to the way they were in 2019. Many things have changed and this crisis may take decades to be solved. In fact, decades of incredibly foolish decisions have led us to this point, and the utter incompetence of our leaders in Washington is a major indicator that things won’t turn around any time soon. The coming months are not going to be pretty, and we should start to prepare accordingly because no one is coming to save us from this mess."
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