American farmers are losing in export sales, and hurting even more. More than two thirds of containers leaving California ports running back to Asia, are empty, whereas they were to contain food stuffs for export from US farmers.
- At least 22% of foreign agriculture sales have been lost due to transportation issues.
- Ships skip smaller US ports, leaving with empty containers after clearing the logjam to rush back to Asia.
- It costs at least seven times more to ship from Shanghai to Los Angeles than the other way around.
As supply chain issues still rage, American farmers have been trying to get their perishable goods for export loaded up to go to the Asian markets before they go completely bad. Jason Parker, head of global logistics firm Flexport, stated, “Getting exports out of the country is actually harder than getting imports into the country.” This is particular the case because ships are skipping all smaller ports along their export load routes so they can skip the logjam of traffic and head back to Asia to get loaded with more import goods. And American farmers are paying the bill. According to the USDA, the American farm industry exports more than one-fifth of its produce, and US farm exports continue to hit record values. A major boost to our national economy, and the world economy, as the globe continues the need for economic recovery from nearly 2 years of pandemic restrictions worldwide. What is especially important to both US recovery and Global recovery has been the US-China Trade deal made by the Trump administration. What is even more concerning is that while US exports seem to be left to rot, and US farmers
brace for those potential negative impacts – the climbing costs on Agricultural inputs will further drive into those margins as well. It is curious to see how much some of our farmers will be able to withstand.
The Agricultural Transportation Coalition has concluded a survey, which estimates at least 22 percent of agricultural exports were being lost due to transportation issues.
Dairy exports alone have been suggested to have lost more than $1 billion in the first 7 months of this year alone, in another study done by the National Milk Producers Federation. It is also estimated that at least 72 percent of containers leaving California are entirely empty.
Some companies are holding products at shore in refrigerated containers waiting for an easement. But that is not free. With Leprino Foods stating for this year alone in fees they expect to pay an extra $25 million.
Some are taking other transit options, such as air transport – however, this is more costly, and not practical for all cases. In other cases, goods are being relocated to other states, such as Texas, to be able to load in their docks for goods such as nuts and cotton.
As issues continue worsen, so too does that of the faith of export customers in our US Agricultural industries. Global customers of US trade may start to question the reliability of the US, and start to look for new suppliers closer to their home. The US dairy industry has already experienced this to some degree.
Though our Ag industries are strong, at the end of the day – the customer needs the goods they expect to have purchased. And if we cant guarantee that to some level of success, our foreign customers will start to look for other avenues, just to hedge against problems like this in the future.
