The numbers do not quite match up fairly for consumers!
Today’s blog is by Margaret Stewart, Director of HR, and Administration at SafeSourcing Inc
Since the beginning of the Pandemic, we have seen drastic changes in our world. We have seen death tolls rise, then fear and doubt seeping into society. Then came the lockdowns and the switch to work from home, with essential workers still braving the frontline. Over the course of two years, we have gradually adapted to new situations and a changed world.
One of the biggest changes we have seen has been the rise of corporate profits. The need for essential workers forced companies to compete for employees, which then triggered rising wages. These wages have ultimately been passed on to the consumer through increase in goods. The problem is that overall, the increase in wages does not account for the high rate of inflation that we have seen in multiple industries, primarily the meat industry. This notion is confirmed when we see some meat companies have seen record profits in 2021 after setting record high prices.
So how did it happen? First, during the pandemic, many meat companies had to shut down their operations. There were people getting sick and unable to work, while others feared going to work and getting sick. The companies were forced into a labor shortage that turned into a product shortage, raising prices for the consumer. Then there were federally mandated safety measures that had to be implemented, which was supposed to reduce the number of people exposed, but the spread continued, continuing to affect the industry workforce.
In addition, those in the meat industry were facing additional costs themselves in feed, transportation, and labor. All these factors have affected the costs of meat to rise drastically, which most of us have noticed at the grocery store. But the numbers do not quite match up. The inflation costs associated with the meat industry are higher than expected. This has led to record profits in many corporations, including those in the meat industry. According to one source, profits have been up to 40% higher than in previous years, while their costs have gone up but far less than the prices they are charging. In addition, the largest companies have been the only ones to make it through the pandemic mostly unscathed, making smaller companies shut down. In fact, this even has gained the attention of President Biden, who called out the largest companies for their “market domination, which he said is driving up prices and hurting consumers.”
While the costs going up are affecting everyone, there are some things you can do to help. By using a procurement partner, like SafeSourcing, you can get your organization’s costs under control, possible even locked in for a contracted term. We can help you find the products you need in the meat industry at the best costs, helping to secure your supply chain, ensuring consistent and timely arrival of the products you need, while avoiding addition cost increases.
For more information on how SafeSourcing can help your organization or on our Risk-Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.