How Will the Economic Boom Impact U.S. Agricultural Businesses?
By Jennifer Shike, FarmJournal's Pork
July 16, 2021
The economic boom continues as U.S. consumers are getting out and about spending on services once again. Jobs are abundantly available, but workers are scarce as the labor market is healing slower than many economists expected, according to the latest Quarterly report from CoBank’s Knowledge Exchange.
CoBank says labor challenges felt during the pandemic and continuing still today will incentivize businesses throughout the food supply chain to rapidly increase automation within their operations.
“The most significant and lasting impact from COVID-19 will be an acceleration in automation,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange division, in the report. “And it will affect the entire supply chain from field to grocery and restaurants. It won’t be an overnight transformation, but much larger investments in technology now will lead to a much more automated supply chain over the next few years.”
Although commodity price inflation has been a boon to many ag producers over the past year, CoBank says increases in raw material and transportation costs, combined with higher wages, are causing retailers to pass those higher costs on to consumers.
Grocers and restaurants are trying to discern how this will impact consumer buying habits. CoBank adds, “The coming adjustments will look quite different for each segment of the food supply chain. But the acceleration in change will be meaningful, and strategic steps to build more resilient businesses are coming sooner than previously believed.”
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