Focus Management Group: December Month in Review
Each month we post an overview article that covers our recent company articles, announcements, and insights. Below is for the month of December.
The Dairy Sector Requires Attention
The dairy sector is being impacted by a combination of issues right now – the milk and corn price relationship, water availability in certain Western States, trucking and supply chain issues, labor shortages, and overall inflation.
Dairy farming has always required producers to have a positive outlook while faced with seemingly insurmountable obstacles and tremendous levels of unknown risks. Today, that optimism is running thin for many producers, with good reason.
What options do dairy producers have?
Trends of 2021 Are Here to Stay: Inflation, Labor Issues, Commodity Price Changes, Supply Chain
As companies and lenders evaluate performance risk and expectations for 2022, the trends previously considered to be emerging need to be considered a permanent part of the 2022 business environment. At this point, it is unrealistic to consider inflation transitory, or to believe there is a magic switch that will eliminate labor and supply chain issues.
The statistics show inflation, commodity price changes, labor issues and supply chain disruptions are no longer emerging trends. These are trends businesses need to be prepared to effectively manage through to ensure successful operating performance during 2022, and possibly beyond.
What should you be doing to prepare?
New USDA Loan Program: Food Supply Chain Guaranteed Loan Program
On December 9, 2021 the U.S. Department of Agriculture (“USDA”) announced that the USDA, through its Rural Development (“RD”) program, is deploying $100 million under the new Food Supply Chain Guaranteed Loan Program.
These programs will make available nearly $1 billion in loan guarantees to back private investment in processing and food supply infrastructure. The program is available to meat and poultry processors, and any other companies that will strengthen the US food supply chain.
Click below to learn more.
A Christmas Take on Inflation
Over the past year, FMG has provided many articles addressing inflation, commodity price changes and other trends that are impacting the financial performance and the liquidity of businesses. We have discussed the Consumer Price Index (“CPI”), the Producer Price Index (“PPI”), and the Personal Consumption Expenditure (“PCE”) index.
But, here is a new one for us all to consider...
The PNC Christmas Price Index
(trademarked as PNC CPI®)
Who knew that for 38 years PNC bank has been publishing the PNC Christmas Price Index!
The 2021 PNC Christmas Price Index shows an inflation rate of 5.7% over 2020, with the total purchase price of the 12 days of Christmas gifts at $41,205.58.
We also take a look at some of the other issues making it tough on Santa's Workshop this year... Give it a read below!
Is There an Update on California’s Proposition 12 and the Impact on Pork Producers?
Earlier this year, FMG summarized the issues pork producers were facing as a result of the passage of California’s Proposition 12. With January 1, 2022 around the corner, it is important to consider an update on the status of implementing Proposition 12 for pork producers.