The Logistics Whipsaw for US Agriculture
US ag is getting a logistical whipsaw from international shipping companies due to the Wuhan China Coronavirus pandemic. Ports are experiencing unprecedented shipping delays due to a shortage of dock workers who are out due to either illness from the virus, or being quarantined from getting exposure to an infected person. Here is a link to a video that the U.S. Coast Guard made of the ships that are waiting to unload off one California port.: https://s29755.pcdn.co/wp-content/uploads/2021/02/DOD_108183439-1024×576-1769k-6025cee060084-1.mp4 As you can see, there are thousands of containers that are backed up on the dock as well as dozens of ships at sea waiting to unload. The US ag chemical industry relies on many products which are produced in Asian countries, and many of those delayed containers are full of the active ingredients which need to be shipped to US formulation plants and converted into crop protection products that will be sprayed onto the 2021 crop. Some products will be made “just in time” to be applied to spring crops, but others will not make it on time. The result is that many products are going up in price, product shortages are expected, and alternative pest control solutions are either not as effective or more expensive. If you have not already, get your crop protection chemicals procured as soon as possible!
There’s another negative whipsaw effect from the Wuhan China Coronavirus. US consumers are buying 10% more “stuff” imported from Asia as they sit at their homes and peruse internet shops that deliver to their doors. If the communist China coast guard put out a flyover of their ports, you would see even more thousands of containers backed up on their docks waiting to be loaded onto ships. Usually 50% of the containers that hit our US ports are filled back up with USA made products like agricultural commodities and sent back to Asia. That’s down to only 25% right now because the shippers aren’t waiting around for them to get filled. Europe is experiencing the same phenomenon. More info on that from Brownfield ag here:https://brownfieldagnews.com/news/more-u-s-imports-backlogging-commodity-export-movement/
It’s a whipsaw. Shipping rates are higher, input costs are going up, and it is harder to deliver our US grown products to our export customers thanks to the Wuhan China Coronavirus. But there is good news too. Commodity prices are up, and we will be planting corn in 60 days!