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Post-pandemic inflation and the need for on-farm financial management

April 26, 2023 – AgriResponse released their analysis on post-pandemic inflation data as it relates to the impacts of inflation, disruptions in global supply chains, and reprioritization of government spending.

The analysis states that “inflation has been made more complex by the emergence of new price drivers, such as fossilflation, greenflation, and climateflation, which had already begun to impact economies around the world amidst the urgency of ensuring an effective and timely net-zero transition.”

Inflation has caused high prices for customers, as many businesses raise their prices. The analysis found that food and energy have been observed as the two primary drivers of current inflation.

Labour shortages are also increasing pressure on farmers and their operations, performance and mental health, states AgriResponse.

Consumers’ changes in purchasing behaviours due to “economic and financial concerns,” and supply chains are “changing in response to geopolitical disruptions and the urgency for climate change.”

However, the analysis states that “investors note that the current conditions could be beneficial for farmers to boost production.” Investment watchdogs note that current factors indicate agriculture is a good long-term investment.

In terms of inflation, “climateflation, greenflation and fossilflation will all contribute to making the price of agricultural inputs and commodities very volatile over the transition to a new energy system.” This considers the volatility of both expenses and revenues.

The analysis notes that “improving productivity remains a key risk mitigation strategy in the current inflationary environment. Yet, the latter may affect investment planning.” This could result in a delay in upgrades and transitions.

AgriResponse suggests staying informed about market insights, supply costs and pricing, climate change policies and consumer habits.

Source: AgriResponse