American Farm Bureau Federation Chief Economist Dr. Roger Cryan says supply chain problems abound in America and around the world. He says the issues began when COVID-19 shut down dining and entertainment and changed consumer spending habits.
“All our demand shifted to stuff and that demand for a lot of stuff clogged up ocean shipping, which we’re still dealing with. That’s created problems at the ports, shortages of containers, and our ag exporters have had a hard time moving product back across to Asia, and our farmers have had hard time getting inputs and our equipment manufacturers have had a hard time getting inputs, and there’s all kinds of things that are hard to get.”
Cryan says it’s unfortunate that some of these supply problems are going to stick around for a while yet. “Again, we’ve pumped up the economy so much, pumped up demand so much, that it’s going to take time for supply to catch up, and that’s going to take time and investment. Congress passed an infrastructure bill that should help the U.S. check off a lot of those overdue projects that will help the economy grow. The economy cooling off a little bit will be important to really getting things sort of straight again.”
Cryan says these supply chain issues are also impacting inflation. “Well, inflation is too much money chasing too little supply. The economy is running hot again. There’s a lot of demand. Given the scale of the oversupply of money right now, the only practical solution for inflation is for the Federal Reserve Bank to rein in their lending.”