The CEO of Cargill believes that inflation is “transitory” despite many “issues in the supply chain,” he said during an interview for Bloomberg Markets.
“There’s been a lot of pressure on the supply chain in food, but what I’ve been really struck by in the last 18 months since the beginning of COVID is the resilience of the supply chain,” said Cargill CEO Dave MacLennan. “I’m optimistic that supply-chain issues will clear up over time.”
MacLennan said Hurricane Ida severely impacted two of Cargill’s grain-handling facilities in Louisiana, but they’re recovering. “Climate change is going to continue to have a big impact on the growth of agricultural products, not just the production of them, but also how they get transported,” he said.
He said Cargill’s size and diversity is helping it deal with adverse weather and other challenges. “One of the benefits of having a large, diverse company is the ability to shift supply chains when necessary, and we’ve really seen that in the last 18 months,” he said.
MacLennan addressed the impending deal for Cargill and Continental Grain Co. to acquire poultry producer Sanderson Farms and merge it with Continental’s Wayne Farms poultry unit. He noted that Cargill has been in the poultry business outside the U.S. for years.
“We, with our partner Wayne Farms, thought this was an opportunity to fill a consumer demand. Our customers and also consumers – they want to eat more chicken.” He said he expects the deal to close sometime next year.
He said that labor shortages are forcing Cargill to run a turkey processing plant in Virginia at 70% of capacity because of labor shortages. “We’ve increased wages, we’ve offered signing bonuses, we’ve offered enhanced 401(k) benefits, onsite health care, day care – but the fact is, we’re still short of labor,” he said.
