So I read today that the Biden administration is cracking down on the meat industry to address rising prices in protein. While it is certainly not my job to go out and defend the meat industry, I couldn’t help but feel that that the situation was being grossly mischaracterized. Imagine that from politicians!
Yes, I know the prices have gone up. In fact, this past weekend I went to the supermarket with my son who asked me the reason for this. Now that he’s out on his own, he’s come to realize what things really cost. Ha!
My explanation did not go to big, bad corporate America squeezing the little guy. No, I talked about the boring supply chain and the many issues that I have heard about not just in the processing plant but also among OEMs. Can you say labor?
As I have written in this blog, there are many reasons why we’re seeing this labor shortage. Demographic trends? Unemployment benefits? Gas prices? Competition from other unrelated industries for the same limited number of workers? As you know, I could go on and on about this. And while my pieces have been tended to focus more on the long term and how automation will help us release the “labor pressure valve”, that does not help processors who need to get product out the door today.
Casey Laughman of Food Engineering Magazine recently summed up this issue very well. Sure enough, it is about the supply chain, in some cases going all the way upstream to the farmer who hasn’t seen his food service business come back anywhere near pre-COVID levels. As such, they have cut back, putting less product into the marketplace. At the same time, many of these consumers who in previous years might eat that product in their favorite restaurant, have now cut back drastically on eating out, replacing it with product at the supermarket and cooking at home. Added demand, tight supply. Prices rise. I didn’t need to study Economics to figure that one out.
Obviously, I am simplifying this terribly. There are many other factors affecting prices. I just don’t see us getting anywhere by painting companies as the bad guys.
No, this problem requires a variety of solutions from players in all links in the supply chain. You’ll find many of these solutions among the exhibitors at Process Expo in November. If you haven’t yet signed up, now is the time to do so!