Boredom at Ports Could Mean Crisis for Family Farms


Ontario is just 60 miles from California’s El Dorado Dairy to the country’s largest container port in Los Angeles. But the farm has little chance of getting its produce on a ship to foreign markets so important to its business.

The farm is part of California Dairies Inc., one of the nation’s largest cooperatives that produces powdered milk for factories in Southeast Asia and Mexico and uses it to make candy, baby food and other foods. The company typically ships 50 million pounds of powdered milk and butter from ports each month. But in recent months, roughly 60 percent of the company’s bookings for outbound ships have been canceled or delayed, resulting in about $45 million in lost revenue per month.

“It’s not just a problem, it’s not just an inconvenience, it’s a disaster,” said Brad Anderson, CEO of California Dairies.

A supply chain crisis It made national headlines for the import and caught the attention of the Biden administration, as shoppers were concerned. securing gifts in time for the holidays and strong consumer demand inflation for sofas, electronics, toys and clothing highest level in thirty years.

Another crisis is brewing for American farm exports.

The same congestion at US ports and lack of truck drivers This has brought the flow of some goods to a standstill, leaving farmers struggling to get their cargo abroad and fulfill contracts before food stocks run out. Unloading ships at ports now takes weeks instead of days, and backed up shippers are so desperate to return to Asia to pick up more goods that they often leave the US with empty containers rather than wait for American farmers to fill them. them up.

The National Dairy Producers Federation estimates that shipping cuts cost the U.S. dairy industry nearly $1 billion in the first half of the year in terms of higher shipping and inventory costs, lost export volume and price reductions.

“Exports are a big issue for the US right now,” said Jason Parker, head of global trucking and intermodal at Flexport, a logistics company. “Exports are harder to get out of the country than imports into.”

Agriculture accounts for about one-tenth of America’s goods exports, and roughly 20 percent of what U.S. farmers and ranchers produce is shipped abroad. The industry depends on a complex choreography of refrigerated trucks, railcars, cargo ships and warehouses that often move fresh produce around the world smoothly and unnoticed.

U.S. farm exports have risen strongly this year as the industry rebounds from the pandemic and benefits agriculture. trade agreement with China It required the purchase of American agricultural products. Strong global demand for food and rising commodity prices increased the value of U.S. agricultural exports by more than 20 percent from last year.

Still, exporters say they’re leaving a significant amount of money on the table as a result of supply chain issues. And many farmers are now struggling to keep up with the rising costs of materials like fertilizer, air filters, pallets and packaging, as well as finding farmers and drivers to move their wares.

A survey by the Agricultural Transport Coalition, which represents exporters, found that an average of 22 percent of foreign agricultural sales are lost due to transportation difficulties.

Delays in ports are particularly damaging to products moving in corrugated metal containers such as cheese, butter, meat, walnuts and cotton.

Talmera USA Inc., a company that exports dairy products such as powdered milk, cheese, and lactose, delayed its shipment so much that its cargo was loaded onto the original vessel it was assigned after leaving the port of Seattle. , traveled through Asia and returned weeks later.

Mr. Anderson said his company’s customers began to look for suppliers in Europe, New Zealand and other countries for their purchases, even though the US dairy industry is renowned for high quality. “Obviously, none of this matters to the customer if we don’t get there,” he said.

Part of the problem is that shipping companies can charge much more for ferrying goods from Asia to the United States than vice versa, so they don’t want to waste time waiting for a less lucrative freight from the West Coast.

According to data from Freightos, an online freight marketplace, the cost of shipping a 40-foot container from Asia to the US West Coast rose to $18,730 in November – more than 17 times the cost of traveling backwards.

As a result, more than 80 percent of the 434,000 20-foot containers exported from the Port of Los Angeles in September were empty – nearly two-thirds empty in September 2020 and September 2019.

Mario Cordero, managing director of the Port of Long Beach, said the price difference encourages shipping companies to “get their containers back to Asia as soon as possible so you can load them with import goods.”

“And unfortunately the American exporter is affected by this approach,” he said.

A supply shortage in the truck industry It also impresses farmers, as truckers find better wages and hours to deliver holiday gifts than hauling soybeans and pigs.

Tony Clayton, president of Clayton Agri-Marketing Inc. in Jefferson City, Mo exports livestock to the world for breeding. He said the company competes for dairy heifers, pigs and goats at both ports and airports. And many livestock truckers have found that they can earn more from hauling dry cargo.

“It’s a challenge,” said Mr. Clayton. “We are all fighting and racing for the people who will sit behind the wheel.”

infrastructure bill that Congress passed On November 5, it aims to fix delays in the supply chain by investing $17 billion in American ports, most rank It is among the least productive in the world.

The bill also includes a provision for financing to improve railways, roads and waterways, as well as to finance container yards that open outside. Savannah Harbor, to ease congestion in Georgia. It will also lower the minimum age for truckers to cross state lines to 18, in an effort to attract more workers to a profession. a major bottleneck in supply chains.

In September, the U.S. Department of Agriculture announced It would distribute $500 million to help farmers cope with transportation difficulties and rising material costs.

The Biden administration’s port ambassador, John D. Porcari, said farm exports were “a primary focus” for the administration, and the White House was trying to encourage private sector companies, including ocean liners, to activate the supply chain.

The White House held a roundtable with agricultural exporters on Friday, and Mr. Porcari plans to visit one of agriculture’s biggest export destinations, the Port of Oakland in California this week.

“We know that some industries are having more problems than others and we are working to eliminate these bottlenecks,” Porcari said in an interview.

While agricultural exporters welcome long-term infrastructure investments, they continue to be concerned about more immediate losses.

Mr. Anderson, whose company is responsible for about 10 percent of America’s milk supply and one-fifth of American butter production, said he was frustrated that much of the public dialogue from government and media was focused more on consumer imports.

“Are we going to buy toys for Christmas? Will we buy chips for cars? We think these are real concerns and need to be talked about,” he said.

Agricultural exporters had to get creative to bypass congested ports and warehouses. Mr. Anderson said his company is considering rerouting some shipments over a thousand miles to the port in Vancouver.

Mike Durkin, CEO of Leprino Foods Company, the world’s largest producer of mozzarella cheese, He told parliamentarians This month, he said, nearly all of the company’s 2021 ocean shipments have been canceled and rebooked for a later date. Mr. Durkin said the company has canceled more than 100 reservations and rebooked 17 times this year, equating to a five-month delay in the delivery of its cheeses.

Meanwhile, Leprino Foods has had to pay to keep its cheese in refrigerated containers in shipping yards, and has received an additional $25 million in fees this year.



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