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If there are some items missing on your stockpile, you should try to get them as fast as you can because things in the global supply chains are about to get really crazy. On top of the ongoing shortages, rising prices, transportation problems, and the threat of a 70s-like inflationary spike, companies are also having to deal with external offenses, as a different group of hackers just attacked the system of the largest meatpacker in the entire world, forcing the company to halt all operations across numerous plants, many of them based in the U.S. Just yesterday, the White House revealed that JBS SA, a Brazilian meatpacking company that has several meat processing plants in North America and Australia, has fallen victim to a ransomware attack conducted by a criminal organization likely based in Russia. The attack resulted in severe disruptions in production and forced the company to entirely shut down Australian operations and stop cattle slaughter at all its U.S. plants on Tuesday, according to union officials.
The company’s North American operations are headquartered in Greeley, Colorado, but there are four other huge beef plants across the U.S., which altogether handle 22,500 cattle a day. According to Bloomberg, the outage has already wiped out nearly a fifth of the U.S. production as JBS controls about 20% of the nation’s slaughtering capacity for cattle and hogs. Analysts are warning that until this crisis is finally put under control, meat and pork will become harder to find at the stores and prices will likely tick up.
Supply chain specialists have been arguing that the coming meat shortage is just the tip of the iceberg. But last year’s chaotic events highlighted to the global industry how paring inventories can leave supply chains extremely vulnerable to external disruptions. A single systemic failure can trigger persistent shortages of a wide variety of goods and exacerbate inflation pressures for both businesses and consumers, which leads to bigger losses and tighter profits.
The worldwide shortage of raw materials in addition to container shipping shortages has been severely aggravating supply chain problems, but as consumers have been more eager than ever to buy what they want, prices have nowhere to go but up, that’s why economists have started to alert the whole world may be at risk of seeing inflation levels spiral out of control.
Recently, even Costco executives have been stressing that inflation has become a serious issue across their chains and they said to be seeing accelerating prices across a range of products, from raw materials to containers as well as a 20% spike in meat prices over the past month.“Inflationary factors abound,” CFO Richard Galanti exclaimed on the company’s fiscal third-quarter earnings call last Thursday.
Galanti mentioned price increases as high as 8% across several goods, including pulp and paper, an assortment of plastic products as well as soda and cheese. Those increases are pushing the company to pass on price hikes of 3% to 10% to consumers. So if your pantry is running low on some items, try to find what you’ll need in the months ahead and buy it if you can because just by analyzing how the current trends have been unfolding, there’s a good chance U.S. consumers will have to deal with even acuter shortages and they’ll be paying much higher prices for the supplies they want if they wait. In the meantime, pay attention to the packaging of the products you’re going to buy because some companies have been masking inflation by shrinking package sizes.
The phenomenon called “shrinkflation” is a form of retail camouflage, in which people end up paying more for their household staples in ways that actually don’t show up on receipts – thinner rolls, lighter bags, and smaller cans. The “technique” is a way companies found not to scare off customers in face of rising costs. We’re about to witness the inflationary nightmare so many experts have relentlessly tried to warn us about. And it’s safe to say that many other “unpleasant surprises” will come along the way and trigger a lot more chaos. Don’t waste your time and start getting ready for the challenges lying ahead before it’s either too late or too expensive to do so.