Transportation and labor seeing largest bullwhip
On ag economist believes the current chaos in ag supply chains can be attributed to the bullwhip effect from the pandemic.
Trey Malone with Michigan State University tells Brownfield unexpected consumer demand changes since the start of the pandemic have created ripple effects throughout supply chains
“What we’re seeing as it relates to the bullwhip effect are these massive jumps in transportation costs as well as these big increases in labor costs,” he explains.
Malone says some emerging crops like hemp and hops without longer-term contracts have a more difficult time navigating cost increases.
“Those producers were even more affected by that unexpected demand shock on the consumer side,” he says.
He says there is some hope for the labor situation as college surveys are finding students are more interested in agriculture and experiential learning from the industry as they feel that’s been lacking the past two years. He believes students today are more willing to consider internships and careers in the industry than prior to the pandemic.
Malone spoke with Brownfield during the Michigan Ag Credit Conference.