Supply shortage for UC Davis economics professors in California


The two university professors said recent supply chain delays in the state could last until the first half of 2022.

DAVIS, Calif .– At a UC Davis roundtable on Thursday on the state’s unique supply and labor shortage, international trade expert and professor Kadee Russ said the strong disproportionate demand for goods rather than services fuels the supply chain.

“Some issues have persisted since the start of the pandemic, such as sporadic shutdowns and reduced capacity of factories for reasons related to the pandemic,” Russ said.

Factories and other companies in the labor industry have sent workers home, but the same pandemic precautions have sent millions more across the country as well. Coupled with the current labor shortage that many industries face, the tendency to pay for more goods and need fewer services means that supply delays are prolonged.

Nonetheless, Russ describes the current shortage in the supply chain as more “idiosyncratic” than the larger shortage at the start of the pandemic.

“I mean we all remember empty shelves of key products,” Russ said. “Every now and then we see critical goods like some medical supplies affected and it could be serious, but for the most part these shortages are not that drastic phenomenon as we saw at the start of the pandemic with the big lockdowns. . “

Agricultural and resource economics professor Dan Sumner said gas prices have risen the most in terms of commodities, with major consequences for farmers using fertilizers made from natural gas. But even once it’s time to harvest the crop and export it to out-of-state customers, shipping containers are also running low on supplies.

According to Russ, the average shipping time from China to the United States is 40 days, but this fall saw a maximum wait time of 73 days.

“Empty containers normally full of California product end up returning to Asia empty so they can start the cycle again,” Sumner said. “It saves the inventory. “

Supply chain issues largely related to demand are expected to continue until at least the first half of 2022, Russ said. But as long as the threat of pandemic shutdowns continues to hang over the markets, “we’re going to be plagued by these sporadic shortages.”

Click here to watch UC Davis’ full feed on Supply Chains and Food Procurement.


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