Transportation and Shipping Issues Brought to Light for U.S. Ag Producers

Some producers thinking about contingency plans

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Earlier this week, the United States Department of Agriculture (USDA) held a meeting with representatives of U.S. agricultural products (livestock, grains, specialty crop, and dairy industries) and leadership from the United States Department of Transportation (DoT) to discuss concerns over transportation and shipping issues.

According to the Secretary of Agriculture Tom Vilsack, export challenges that began in the fall of 2020 have escalated to include a broad range of impacted commodities and port regions.  “Demand in consumer trade has led to a supply crisis in the availability of shipping containers, while refrigeration challenges, lack of certainty in fee structures, and booking policy inconsistencies have all made export of agricultural products more difficult for U.S. producers.”

USDA concluded that it would continue to facilitate and voice concerns on this issue on behalf of American agriculture.

Potential Planting Season Impacts Stemming from Transportation Issues

With the stress on warehousing, laborers, trucking, rail service, inland and ocean terminals, container availability, and vessel service, the current transportation situation could create disruption and delay for some producers during planting season.

While many U.S. farms are facing the challenge of getting products exported to their intended destination around the globe, in some instances there have also been concerns from producers regarding the supply chain for getting seed, chemicals, fertilizer, equipment, and supplies.

“We are starting to hear producers (globally) raise concerns over supplies that might be delayed or impacted due to labor issues and transportation disruptions,” says Kala Jenkins, Senior Ag Consultant for K·Coe Isom.  “We recommend that ag producers evaluate their processes and take stock of their particular dependencies and any potential issues with supplies they might encounter.” 

Jenkins advises these considerations for producers who could face any planting concerns due to shipping and transportation delays:

  • It might be worth doing a quick inventory of what you have now, and determine the outlook ahead with seed, chemical, and fertilizer dealers.
  • If you have any concerns regarding getting your crops planted in time due to supply issues, reach out to your crop insurance agent to see if that scenario is covered ahead of any potential losses.
  • Evaluate what a shift in acres would do to your operation.
  • Consider enlisting a risk management team to help mitigate and/or maximize some of this opportunity.

 Contact a K·Coe advisor with questions or to discuss risk management ideas.

 

 

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