Tag: dairy supply chain

Trade Advocates Turn Up Volume on Supply Chain Challenges

Posted on by Theresa Sweeney

Export supply chain challenges persisted as 2022 began, as did NMPF’s work, together with the U.S. Dairy Export Council (USDEC), to spotlight the disruptions faced by dairy exporters to build momentum for government action.

NMPF’s focus on the issue in January continued its two-track approach of pushing for both legislative reform and near-term steps by the administration to complement that.

NMPF co-hosted an Agri-Pulse press event with USDEC on Jan. 31 to assess and discuss solutions to agricultural export supply chain snarls. The hybrid event, held at the National Press Club, featured a panel of industry speakers impacted by the agricultural export supply chain concerns, including USDEC member Leprino Foods, and a government panel of USDA Secretary Vilsack; John Porcari, the Biden Administration’s Supply Chain Ports Envoy; and Ocean Shipping Reform Act lead sponsors Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD).

“We hope to be able to make sure that people understand this isn’t just an import issue, it’s also an export issue,” Vilsack said at the event.  “And the Department of Agriculture wants to be part of the solution.”

The event, which had more than 1,200 RVSPs from industry professionals, advocates and media outlets, provided the opportunity to refocus attention on how supply chain challenges are affecting exports. NMPF conducted outreach to multiple news outlets to foster robust coverage of those aspects nationwide, gaining attention from Bloomberg News and the Hagstrom Report to the Bakersfield Californian.

The webinar followed a Jan. 27 CEO roundtable discussion hosted by Sec. Vilsack that included two NMPF members – Dairy Farmers of America and California Dairies Inc. –to examine what other steps the Administration could take to mitigate the export supply chain snarls still plaguing dairy and other agricultural exporters.

The events took place as NMPF worked to build support in the Senate for companion legislation to the House of Representatives-passed Ocean Shipping Reform Act. The Senate bill planned for introduction early this month by Senators Amy Klobuchar (D-MN) and John Thune (R-SD) reflects many of the key provisions NMPF worked to secure in the House bill. To build on that positive starting point, NMPF is urging some targeted improvements as the legislation proceeds through the Congressional process.

NMPF also built support for a robust bipartisan message to President Biden urging him to take several near-term steps allowed under current law to provide further relief to agricultural exporters. The House letter, led by Reps. Jim Costa (D-CA) and Dusty Johnson (R-SD), garnered 71 signatures. NMPF worked closely with Congressional offices to help craft the letter’s messages.

USDA Outlines New Program at NMPF, USDEC Supply Chain Webinar

Posted on by Theresa Sweeney

Agriculture Secretary Tom Vilsack today announced a new program to help address the export side of the supply chain crisis. The initiative was addressed at a webinar of agriculture industry and policy leaders hosted by the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC).

The USDA program discussed during the webinar was launched in partnership with the Port of Oakland and will set up a new “pop-up” site at the port dedicated to easing the loading of empty containers with agricultural exports. The new site will also have a dedicated gate with the ability to pre-cool refrigerated shipping containers in order to reduce bottlenecks at the main entrance to the port.

The new arrangement should be available beginning in March and will include support of $125 per container for movement logistics costs. See the USDA press release here.

“Congestion in and around U.S. ports is one of a series of export supply chain challenges undercutting U.S. dairy exporters’ ability to reliably meet the needs of overseas customers for high-quality U.S. dairy products,” said Krysta Harden, president and CEO of USDEC. “By creating a process specific to handling U.S. agricultural exports, we expect USDA’s new partnership with the Port of Oakland will help alleviate some of those challenges. We look forward to working with USDA and our members on this new initiative while continuing to pursue additional legislative and administrative solutions to the dairy export supply chain crisis.”

“The delays and disruptions in export shipping have cost the U.S. dairy industry well over $1.3 billion through just the first three quarters of 2021 – to say nothing of the rest of America’s agricultural sector. Solving this problem simply cannot wait any longer and today’s announcement of the close collaboration between our associations, the Port of Oakland and USDA is one key step in the right direction,” said Jim Mulhern, president and CEO of NMPF. “Today’s webinar brought together leaders in Congress and the Administration whose efforts have been central to the multi-faceted work of addressing agricultural export supply chain challenges. We thank them for their continuing work and their participation today and look forward to pursuing additional steps to deliver relief for dairy exporters.”

Agri-Pulse, which served as the media partner for the event, reported over 1,200 registrations for the webinar, one of the highest pre-registration figures in the publication’s webinar history.

Speakers included USDA Secretary Tom Vilsack; John Porcari, the Biden Administration’s Supply Chain Ports Envoy; Rep. John Garamendi (D-CA); Rep. Dusty Johnson (R-SD); Mike Durkin, president and CEO of Leprino Foods; Andrew Hwang, manager of business development and international marketing for the Port of Oakland; and Jon Eisen, director of the Intermodal Motor Carriers Conference for the American Trucking Association, as well as moderators Krysta Harden of USDEC and Jaime Castaneda of NMPF and USDEC.

The USDA announcement came just days after Secretary Vilsack hosted a virtual roundtable with leading agricultural industry CEOs on Jan. 27 in which NMPF and USDEC members, among others, raised their concerns tied to exports.

USDEC and NMPF, in collaboration with other agriculture interests across the U.S., have leveraged a multi-prong approach with Congress and the administration since early 2021 to address the supply chain disruptions plaguing the dairy industry, including unprecedented fees, container availability, and lack of transparency.

For example, in addition to last week’s meeting at USDA, NMPF and USDEC supported a bipartisan letter led by U.S. Reps. Jim Costa (D-CA) and Dusty Johnson (R-SD) and signed by 71 members of Congress to the White House urging the administration to use its emergency powers to immediately address problems caused by the crisis and mitigate risks to U.S. agricultural exporters. The letter made three specific requests:

  • Utilize available emergency authorities to incentivize carriers to load full outbound containers instead of empties.
  • Utilize emergency actions that allow gross vehicle weight limits to exceed 80,000 lbs., even if only on a temporary basis.
  • Utilize existing tools and authorities to provide immediate access to critical shipping and logistics equipment.

USDEC and NMPF Applaud USDA, DOT Strong Message of Support for Agricultural Exporters

Posted on by Theresa Sweeney

On behalf of dairy farmers and manufacturers across the country, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) praised yesterday’s strong message from the U.S. Department of Agriculture (USDA) and the U.S. Department of Transportation (DOT) urging the world’s leading ocean carriers to reform their practices to provide better service to U.S. agricultural exporters. The letter specifically referenced the need to expand use of available West Coast terminal capacity and to “restore reciprocal treatment of imports and exports [which] is inherent in trade.”

USDEC and NMPF repeatedly met with USDA and DOT officials as well as the White House over the past several months to urge a greater Administration focus on the shipping supply chain crisis’s impact on agricultural exporters. The dairy organizations have urged the Administration to call out profiteering by foreign-owned carriers at the expense of dairy exporters and take steps to address the supply chain crisis that’s cost the dairy industry $1.3 billion over just the first three quarters of 2021.

Yesterday’s letter was a key step in the right direction and builds on last week’s successful passage of House legislation designed to curb some of the bad-faith practices by ocean carriers. USDA and DOT noted that, “This imbalance is not sustainable and contributes to the logjam of empty containers clogging ports. The poor service and refusal to serve customers when the empty containers are clearly available are unacceptable and, if not resolved quickly, may require further examination and action by the Federal Maritime Commission.”

“Dairy exporters are enduring tremendous challenges in getting their high-quality products to customers in overseas markets, which puts our industry’s reputation as a reliable supplier at risk. Our competitors in the European Union and Oceania are eager to swoop in and scoop up those sales,” said Krysta Harden, president and CEO of USDEC. “USDEC commends the Administration’s recognition that the current situation facing our dairy exporters cannot continue and strongly supports further steps by the Federal Maritime Commission and other Administration entities to drive change swiftly.”

“Dairy farmers and their cooperatives have invested significantly in painstakingly cultivating export markets to help meet the growing global demand for dairy. This year’s shipping supply chain crisis has created enormous upheaval in maintaining those sales, which are so critical to the overall demand for American milk,” said Jim Mulhern, president and CEO of NMPF. “Dairy farmers strongly support USDA and DOT’s castigation of ocean shippers’ abusive practices and urge the Administration to take the steps necessary to bring about meaningful reforms in export access for our dairy industry.”

Both organizations formed an Export Supply Chain Working Group earlier this year and have worked on a range of initiatives to address the shipping crisis including the passage of HR 4996 and work to drive further Congressional advancement of this legislation. Steps by the Administration to fully use all existing authorities are a crucial complement to that ongoing legislative reform effort.

Dairy Industry Commends House Passage of Ocean Shipping Reform Act on Wide Bipartisan Vote

Posted on by Theresa Sweeney

Proactive efforts throughout this year led by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) to alleviate dairy supply chain disruptions took a significant step forward today with the U.S. House of Representatives passing the bipartisan Ocean Shipping Reform Act of 2021 (OSRA) on an overwhelming bipartisan vote of 364 – 60.

If passed by the Senate and signed into law, the legislation will help alleviate delays and disruptions at U.S. ports that have cost the U.S. dairy industry well over $1 billion this year. American dairy exporters since late 2020 have faced unprecedented challenges in securing shipping container accommodations on ocean vessels while contending with record-high fees and shipping access volatility, most of which has been driven by foreign-owned ocean carriers.

With input from their newly formed Supply Chain Working Group of dairy exporters, USDEC, jointly with NMPF, worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), as well as other agricultural partners, in helping to shape the legislation. In addition, a letter from 78 dairy cooperatives, companies and associations sent today reiterated the importance of OSRA to the continued success of U.S. dairy exports.

As the letter noted, “Ocean carriers are shipping empty containers across the Pacific Ocean at record rates of over 70%. Put simply, this is wreaking havoc on U.S. dairy exports, which are important ingredients in supply chains that help feed consumers in Asia and elsewhere. Unfortunately, our global competitors in the European Union and New Zealand are not facing the same level of volatility in supplying those markets which puts U.S. dairy exports at high risk of being displaced for more reliable suppliers… It is critical that Congress pass the Ocean Shipping Reform Act to address this crisis and deliver relief from the supply chain snarls and market failures that are bogging down the export of American-made dairy products.”

USDEC and NMPF were among the first contributors to drafting OSRA. The bill supports key steps to resolve supply-chain obstacles by amending the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among ocean carriers and other parties. The bill specifically would restrain carriers’ ability to deny export shipments, increase the availability of containers, improve protections against retaliation, and better address unfair detention and demurrage charges.

To help ensure that an effective revision to current law can be swiftly enacted, the organizations will continue working to secure a strong Senate version as well. Congressional reform of the Shipping Act is one vital piece to the broader set of steps NMPF and USDEC continue to promote to alleviate the shipping crisis impacting U.S. dairy exporters.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, president and CEO of USDEC. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized. We commend House leadership for taking this critical step to tackle these challenges.”

“NMPF thanks Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward. Given the complexity of the export shipping crisis, we also encourage the Administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”

USDEC, together with NMPF and their joint Supply Chain Working Group launched in early 2021, continues to urge the importance of strong Senate companion legislation and additional measures to address the challenges plaguing U.S. food and agricultural exporters quickly and fully.

NMPF Continues Push on Supply Chain Constraints

Posted on by Theresa Sweeney

While national headlines are dominated with news of delayed imports threatening to put a damper on the upcoming holidays as a result of supply chain disruptions, U.S. dairy exporters are facing an increasing, and in some ways opposite, difficulty: Securing containers and cargo ship space for their products.

That issue is gaining broader attention as well, thanks in large part to the efforts of the U.S. Dairy Export Council (USDEC) and NMPF, which along with other ag organizations and companies are leading the policy push for supply chain improvements.

That work commanded a larger spotlight recently as Congress convened to examine the supply chain impacts on American agriculture and related sectors. The current supply chain crisis could cause “irreparable harm” to agriculture, Mike Durkin, President and CEO of Leprino Foods, said at a U.S. House Agriculture Committee hearing Nov. 3 about how supply chain issues are affecting export markets for Leprino and the U.S. dairy industry. USDEC and NMPF voiced strong support for Durkin’s call for U.S. government action to more effectively tackle the shipping crisis and its effects on dairy farmers and manufacturers.

“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon. I’m here to talk about a critical component of this disruption that has not received much attention – exports,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”

Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help American agriculture producers reach their foreign markets effectively.

Even as cargos coming from Asia are at full capacity, 72% of containers leaving major California ports are leaving empty – a record volume. While supply and demand issues are a large part of the problem, foreign-owned carrier lines have taken advantage of the situation to forgo loading U.S. exports in favor of loading empties for a quick turnaround toward more lucrative Asian imports. As a result, continually rolled bookings, unprecedented shipping rates, product deterioration, and high detention and demurrage fees have cost American dairy exporters nearly $1 billion through just the first seven months of the year. As a result, even as international demand for dairy products reaches records, U.S. shippers are losing market share to competitors as the United States risks its reputation as a reliable supplier.

NMPF, USDEC and policy partners continue to drive home with the administration and Congress the long-term implications this crisis will have on dairy exporters unless measures are taken to reign in unwarranted carrier behavior. That work has helped to build bipartisan support in Congress for the Ocean Shipping Reform Act (H.R. 4996), which now has 65 cosponsors. A briefing paper on the legislation is here; a new “frequently-asked questions” document compiled by NMPF can be found here. In October, NMPF and USDEC urged the Department of Transportation to voice support for the legislation and provided detailed recommendations on several other concrete steps that DOT and its interagency partners could take to help address the shipping crisis.

The past month has seen a spate of steps announced to begin to help address the supply chain problems. The announced follow a series of meetings NMPF, USDEC were the sole dairy organizations that a long with  a few other agricultural leaders held with officials in September, including with White House Ports Envoy John Porcari and other White House supply chain task force staff, to help drive home the depth and complexity of the shipping-related challenges facing dairy exporters.:

  • As a partial response to NMPF sharing specific data on the impact of the issue and direct advocacy, USDA announced Sept. 29 that the agency will provide $500 million “to provide relief from agricultural market disruption, such as increased transportation challenges, availability and cost of certain materials, and other near-term obstacles related to the marketing and distribution of certain commodities.” NMPF will be sharing member feedback on how the funds could be best used to mitigate the congestion in a meeting with USDA officials next week.
  • On Oct. 13, following months of intensive advocacy to the administration from NMPF, President Biden announced a series of public and private commitments from ports, dockworkers and large companies aimed at addressing port bottlenecks that have been snarling supply chains for nearly a year. The commitments included
    • An expansion to 24/7 operations at the Ports of Los Angeles and Long Beach
    • An International Longshore and Warehouse Union announcement that its members are willing to work the necessary extra shifts, and
    • A pledge from six large companies – Walmart, UPS, FedEx, Samsung, Home Depot and Target – to use the expanded hours to move more cargo off the docks so ships can come to shore faster.
  • On Oct. 20, California Governor Gavin Newsom issued an executive order that directs state agencies to identify state, federal and private land for short-term container storage; extend a temporary exemption to current gross vehicle limits to priority freight routes; and establish workforce training and education programs.

NMPF encourages the dairy farming community to reach out to elected officials to voice support for the proposed House legislation and highlight the importance of action to deal with the shipping crisis impacting dairy exports.

NMPF Applauds USDA Climate-Smart Initiative, Supply Chain Assistance

Posted on by Theresa Sweeney

The National Milk Producers Federation, which represents U.S. dairy farmers and the cooperatives they own, commended the Biden Administration and Agriculture Secretary Tom Vilsack for key steps announced today to assist U.S. farmers and consumers with current challenges while charting a course toward a long-term, climate-smart future for all of agriculture.

“NMPF applauds Agriculture Secretary Tom Vilsack and his team at USDA for its  climate smart agriculture initiative announced today,” said NMPF President and CEO Jim Mulhern. “By aiding the finance of climate-smart farming practices and the marketing of climate-smart commodities, this initiative will ensure even greater U.S. leadership in sustainably feeding the planet. It also will help keep U.S. farmers competitive in a global market that’s increasingly sensitive to agriculture’s effects on climate.

“U.S. dairy farmers have been and will remain leaders in sustainable agricultural production, supporting innovative use of technology and committing to a carbon-neutral future through its forward-thinking Net Zero Initiative. The recently concluded UN Food Systems Summit showed how U.S. government leadership can foster productive dialogue on agriculture and the world’s future climate. Dairy supports these efforts and looks forward to working with USDA and other agencies on crucial climate initiatives.”

Congress is currently considering additional conservation funding with an emphasis on climate smart practices. NMPF led a broad coalition last month supporting new investments in conservation programs targeted toward climate smart practices that can yield meaningful environmental benefits.

Mulhern also praised USDA’s move to provide $500 million in relief from agricultural market disruptions, such as backlogs at U.S. ports that are impeding the flow of dairy products to the consumers worldwide who are demanding them.

“In addition to these important climate initiatives, U.S. dairy farmers appreciate USDA’s allocation of Commodity Credit Corp. funds to alleviate the economic damage caused by recent backlogs at U.S. ports that are hindering access to critical markets overseas,” Mulhern continued. “Although dairy exports are at a record pace, it is coming at a heavy cost to our members and to exporters of U.S. dairy products. Foreign buyers are demanding even greater volumes while voicing growing concerns about U.S. reliability. We stand ready to assist the administration any way we can to help alleviate the ports crisis and aid those who have been negatively affected.”