The CEO of Cargill has revoked his membership at team “transitory,” and has now conceded that inflation will persist well past the temporary phase, bringing with it significantly higher food prices in 2022.
During an interview with Bloomberg, the CEO pointed to worsening labour shortages, global supply chain disruptions, and climate change as the main drivers of elevated food prices. “I thought inflation in ags and food was transitory. I feel less so now because of continued shortages in labour markets,” he admitted, adding that the demand for meat processors, truckers, and warehouse operators is exceptionally high.
Global food prices have skyrocketed to the highest in over a decade last month, forcing consumers to pay even more for their groceries during a time of already-elevated prices for housing, energy, and transportation. To make matters worse, adverse weather conditions have dampened harvests and further limiting food supplies, meanwhile the worsening energy crisis has sent fertilizer costs to record-highs around the world.
Back in September, MacLennan insisted that accelerating food costs will only be temporary, and will abate in the short run. However, it turns out that the ongoing supply chain constraints and recent rallies in energy prices have made markets significantly tighter. “When you have limited supply, that can lead to higher prices,” he added.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
