World Grain - December 2021 - 6

FROM THE EDITOR
EDITORIAL STAFF
Editor
Supply chain woes
weigh on grain industry
s the world slowly regains some
sense of normalcy with the number
of COVID-19 vaccinations rising
and cases and deaths declining, the fallout
from this once-in-a-century pandemic on the
global grain industry continues to linger, and
in some cases, worsen.
Although the grain, flour and feed
industries have demonstrated a remarkable
ability to maintain, and in some
cases, increase production during the
pandemic, the bigger challenge has
been transporting grain and grain-based
products in a timely manner through a
global supply chain that has descended
into dysfunction.
The pandemic has produced a perfect
A
storm that conspires against the efficient
movement of all goods, including
agricultural products. That storm
includes a labor shortage affecting all
modes of grain transportation, temporary
shutdowns of some of the world's
largest ports - particularly in China -
in an attempt to prevent the virus from
spreading, and a massive hurricane that
halted traffic at the Port of New Orleans
for several weeks in September.
Couple these supply-side issues with
soaring consumer demand for all types
of products as the world emerges from
the worst days of the pandemic, and
it's easy to see how demand is outstripping
supply.
Shortages are being felt at every link
in the agricultural global supply chain.
Grain producers are unable to get inputs
for their planted crops. Grain handlers
are struggling to transport grain to end
users due to a shortage of truck drivers
and rail and port workers. Feed millers
are struggling to keep enough feed ingredients
in stock to fortify their products,
and frustrated consumers often
can't find bread and other grain-based
products on the grocery shelves due to
supply chain bottlenecks.
6
The pandemic has exposed the global
supply chain as more susceptible to dysfunction
than anyone could have imagined
two years ago. It also has demonstrated
that supply chains are only as
strong as their weakest link and, even
in this increasingly automated world,
cannot function properly without a full
complement of workers.
The result of the sputtering supply
chain in the face of high demand is, of
course, surging prices for every product
imaginable. A silver lining for the grain
industry, particularly those who produce
and merchandise grains and oilseeds,
has been that skyrocketing prices have
meant a chance to finally cash in after a
seven-year stretch of depressed prices.
The world's major agribusiness companies
are taking advantage of grain marketing
opportunities and strong demand
for their products in this volatile market
to produce consistently positive quarterly
earnings reports for the first time
in several years. But unless the global
logistics nightmare is remedied soon
(some analysts
predict
the problems
will persist well into 2022), product
shortages and rampant inflation will far
outweigh any advantage linked to high
grain prices.
Reaching herd immunity by vaccinating
as much of the global population as
possible is part of the solution, but it's
equally important that
governments and private
industry provide
incentives
that
will
draw potential workers
off the sideline and
into the workforce.
Until that missing link is addressed,
the supply chain will remain weakened
and inefficient.
Arvin Donley
Editor
Managing Editor
Associate Editor
European Correspondent
China Consultant
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World Grain - December 2021

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