b'We now may have the highest retail inventories weve had in quite some time. This is an indication that while our supply chains have a lot of challenges left in front of them, there are signs that theyre loosening and beginning to correct themselves.Allan GrayInflation Reaches Far into Society As for demand of different products in the supply chainInflation has reached the highest rate in more than 30 years,demand is on the rise and causing price increases. The easiest Gray says. 8.6 is an incredibly high inflation relative, and most ofexample to see this in is the grocery store.us dont know about inflation. Good prices are clearly rising, Gray says. In fact, theyre at In response, the federal government raised interest rates their highest level since the 1970s. More importantlyfood infla-but realistically, the funds were raised by .75 basis points.tion is a really big deal in the rest of the world, which fuels real Were a long way from where we could be with respect toconcerns about hunger and additional food insecurity.interest ratesand thats an important thing to keep in mind,In the U.S. alone, food-at-home prices, including grocery store Gray says.or supermarket food prices, increased 1.3% from April to May Wages are continuing to rise. According to the U.S. Bureau2022, and was 11.9% high than May 2021. The USDA Economic of Economic Analysis, wages in the U.S. increased 11% from MayResearch Service reports that in 2022, food-at-home prices are 2021-22.predicted to increase between 8.5% to 9.5%. Granted, increases in wages arent necessarily a reason toThis is the problem with inflation, Gray says. In agriculture, raise an alarm. Wages are always rising, Gray says.we tend to think inflation isnt a terrible thingbut it is a terrible, The bigger issue, he notes, is the statistics around employ- terrible thing. We see what the Russia-Ukraine crisis has done ment data.for us. Wait until that crisis gets wider, because theres too many Right when the pandemic hit, we had a whole bunch ofpeople hungry in the world and they want to rise up. It creates a people who arent employed anymore relative to the size of thelot of instability. population, Gray says. Thats been rising back up, but not asThe Center for Food Demand Analysis and Sustainability at fast as we thought.Purdue University recently asked consumers: what are you doing As of June 2022, the U.S. Department of Labor and Bureau ofabout inflation and how is it affecting your demand for food? Labor Statistics report that unemployment rate is sitting at 3.6%Thirty-one percent said its not doing much at all to their foodof 5.9 million people in the U.S. To compare, unemployment indemand, while 24% are seeking out more sales or discounts. April 2020 was at its largest spike, at 14.7%.Increases in food prices dont affect everybody equally, Is inflation having an impact on wages? Perhaps, but the twoGray says. Its something that we need to make sure were slopes are relatively the same, Gray says. Theres a good argu- paying close attention toeveryone is supposed to have a ment for saying wag raises may have more to do with the greatchance to eat affordable, safe and accessible food.resignation than inflation. I dont have a solid answer whether wages are rising as a result of inflationit seems to be maybeSupply Chains on the Right Trajectorynot yet. After learning so much about the inflation in the U.S.its time If increased wages were the result of inflation, Gray saysto answer the question everyones been asking Will supply he would expect wages to be rising at a faster rate due to thechains ever correct themselves?supply problem associated with the great resignation. That, byWell, the answer is looking positive. definition, is going to cause wages to rise faster, he says.A number of things here indicate substantial problems still As of right now, theres no clear indication of it.exist for our supply chains, at least as of March 2022, Gray says. 40/ SEEDWORLD.COMSEPTEMBER 2022'