Bloomberg writers Megan Durisin, Kateryna Choursina and Aine Quinn reported yesterday that, "Oleksandr Klepach’s fields in southern Ukraine would normally be teeming with shoots of wheat and rapeseed in spring.…
Port Crunch Hits U.S. Farm Exports- Containers Head Back to Asia ASAP- Often Empty
New York Times writer Ana Swanson reported on the front page of Monday’s paper that, “A supply chain crisis for imports has grabbed national headlines and attracted the attention of the Biden administration, as shoppers fret about securing gifts in time for the holidays and as strong consumer demand for couches, electronics, toys and clothing pushes inflation to its highest level in three decades.
“Yet another crisis is also unfolding for American farm exports.
“The same congestion at U.S. ports and shortage of truck drivers that have brought the flow of some goods to a halt have also left farmers struggling to get their cargo abroad and fulfill contracts before food supplies go bad.
Ships now take weeks, rather than days, to unload at the ports, and backed-up shippers are so desperate to return to Asia to pick up more goods that they often leave the United States with empty containers rather than wait for American farmers to fill them up.
The article noted that, “The National Milk Producers Federation estimates that shipping disruptions have 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 deterioration.”
Ms Swanson explained that, “U.S. farm exports have risen strongly this year, as the industry bounces back from the pandemic and benefits from a trade deal with China that required purchases of American agricultural products. Strong global demand for food and soaring commodities prices have lifted the value of U.S. agricultural exports more than 20 percent over last year.
“Still, exporters say they are leaving significant amounts of money on the table as a result of supply chain problems. And many farmers are now struggling to keep up with soaring costs for materials like fertilizer, air filters, pallets and packaging, as well as find farmhands and drivers to move their goods.”
Monday’s article noted that, “According to data from Freightos, an online freight marketplace, the cost to ship a 40-foot container from Asia to the U.S. West Coast soared to $18,730 in November — more than 17 times what it cost to make the reverse trip.
“As a result, more than 80 percent of the 434,000 20-foot containers exported out of the Port of Los Angeles in September were empty — up from about two-thirds in September 2020 and September 2019.
“Mario Cordero, the executive director of the Port of Long Beach, said that the price differential encouraged shipping companies to get their containers ‘back to Asia A.S.A.P. so you can load it with import items.'”
The Times article added that, “In September, the U.S. Department of Agriculture also announced it would dispense $500 million to help farmers deal with transportation challenges and rising materials costs.
“John D. Porcari, the Biden administration’s port envoy, said farm exports are a ‘primary focus’ for the administration, and that the White House was trying to encourage private sector companies, including ocean carriers, to get the supply chain moving.
“The White House held a round table with agricultural exporters on Friday, and Mr. Porcari plans to visit the Port of Oakland, in California, one of the biggest export points for agriculture, this week.”