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Shining Light on Farm & Food Policy for 20 Years.
Saturday, August 17, 2024
Agricultural exporters are dealing with increased freight costs and trade disruptions amid ongoing conflicts in the Red Sea, industry leaders told the Federal Maritime Commission during a hearing Wednesday.
Disruptions in the Red Sea due to attacks from Houthi rebels and a drought-induced slowdown of goods through the Panama Canal are driving up freight costs and putting a focus on the vulnerabilities of key chokepoints in agricultural shipping lanes.
The port congestion and skyrocketing fees that ag shippers experienced during the height of the COVID-19 pandemic have largely subsided, according to Federal Maritime Commission Chairman Daniel Maffei.
Criticism is piling up on the Federal Maritime Commission’s attempt to define exactly what a reasonable reason is for ocean carrier companies to refuse to haul U.S. farm commodity exports to their destinations overseas.
Archer Daniels Midland company CEO Juan Ricardo Luciano said in the company’s third-quarter earnings call Tuesday that low water levels on the Mississippi River will likely reduce soy exports from North America.
Congress last week made it clear that ocean carrier companies cannot “unreasonably” refuse to book space on ships for U.S. ag exports, but now it’s up to the Federal Maritime Commission to decide exactly what that means and the fate of foreign markets for U.S. some farm commodities is at stake.
“Not that I’m aware of.” House Agriculture Chairman David Scott says that answer from Tim Schellpeper, the CEO of meatpacking giant JBS USA, at a hearing in April is enough to justify setting up a special investigator’s office at USDA to look into meat industry practices.