Add to the mix a variety of different rules, restrictions and regulations imposed on some jurisdictions like the recent ban on unvaccinated truck drivers bringing goods across the US border from Mexico and Canada. This move alone has already caused significant disruption to cross-border trade.
"According to the Canadian Trucking Alliance (CTA), the vaccine mandate could prohibit an estimated 12,000 unvaccinated Canadian truck drivers from entering the United States. The American Trucking Associations (ATA) believes 10 to 15 percent of its truckers that handle cross-border freight may leave as a result of the mandates."
After speaking with several business owners these last few weeks I can report there are some shortages of critically important, basic materials which we should all watch carefully for signals about what's to come.
Number one is Fertilizer:
"It’s no secret farmers are faced with a fertilizer crisis. Prices for phosphorus-based and potassium-based (potash) fertilizers have more than doubled in Kansas while Nitrogen-based fertilizers have more than quadrupled. Fertilizer is vital to feeding not only the country, but the world. It contains essential nutrients for plant life, and without it, American agricultural yields will quickly suffer as well as food prices in local grocery stores."
Number two is Computer Chips:
"The RFI showed that median inventory held by chips consumers (including automakers or medical device manufacturers, as examples) has fallen from 40 days in 2019 to less than 5 days in 2021. If a COVID outbreak, a natural disaster, or political instability disrupts a foreign semiconductor facility for even just a few weeks, it has the potential to shut down a manufacturing facility in the U.S., putting American workers and their families at risk."
Shortages in one industry have ripple effects on others and now, vital industries like trucking and energy production are reeling from nagging shortages which risk fundamental cascading breakdowns all the way down the supply daisy-chain. For example reduction in hog production due to lack of available workers has caused 39% price hikes in bacon, omg...not bacon!!
This is where I remind my reader(s) that having additional working capital on hand or making extra purchases of materials has been a winning strategy for over a year now.
The funding I provide had fixed cost while all the supplies and materials you purchase are moving higher, sometime much higher! My capital is way cheaper than the price increase of just bacon over the last nine months. If someone I funded purchased bacon last February and still has it in their freezer, they earned a better profit on the funding I gave them than I did lol!!