For anyone who thinks it’s all going to end in a few months, consider the somewhat obscure U.S. economic indicator known as the Logistics Managers’ Index. The gauge is built on a monthly survey of corporate supply chiefs that asks where they see inventory, transportation and warehouse expenses — the three key components of managing supply chains — now and in 12 months. The current index is at its second-highest level in records dating back to 2016, and the future gauge shows little respite a year from now. The index has proven unnervingly accurate in the past, matching up with actual costs about 90% of the time.As an example of this trickle down effect, Axios reports on spiking corn prices and the reason for it. Key quotes below: • The price of corn is surging at a record pace. Prices have risen by 16% so far this month, the largest monthly gain since May 2019, and have risen every month since July, unleashing a 43.7% gain so far this year, per FactSet. • As commodities like lumber and copper see prices sky higher and global food prices continue to soar, the price of corn is especially important because it is a major input for everything from gasoline to meat to industrial products like wallboard and insulation used in houses. • Major corn and soy producers like Brazil and Argentina have been experiencing labor shortages as a result of the coronavirus pandemic and unseasonably bad weather has hurt crop yields, resulting in a shortage of supply at precisely the same time as the spike in demand. The kicker is that American crops may not be able to fill the void.
The big picture: If American crops aren't able to fill the void, prices could well jump further out of control, Shelby Myers, an economist at the American Farm Bureau, tells Axios. U.S. farmers are in a prime position to benefit from the situation but cold weather in the Midwest that has been followed by drought conditions is making planting an uncertain proposition.At this point we are recommending to stock up on freeze dried corn, with a long shelf life. A handful can be used at a time to add to soups, stews, or use as a side dish. Read more at: AllNewsPipeline.com
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