Port congestion on west coast and in China continues to cause supply chain disruptions
More than 65 cargo ships are now waiting to unload off the California coast. That is up four from last week. The logjam is contributing to shortages of things like timber and pet food.
Ag Secretary Tom Vilsack says that regardless of the cause, the port disruptions cause less supply and higher prices. He also admits that the administration is taking action.
“With a special envoy that President Biden has set up to examine the circumstance and situation at the ports... We want to make sure that we’re doing everything we possibly can to get those ports moving product as quickly as we can,” Vilsack states.
The average wait time at the port of Los Angeles is about nine days. That is two and a half days longer than a month ago.
On the global scale, freight rates edged higher for the second week in a row. The prices are linked to higher fuel costs and port congestion in China. Some traders blame the congestion on COVID outbreaks at ports and a typhoon that hit the coast last week.
The domestic and global shipping crisis is one factor contributing to rising input costs.
The American Soybean Association says that fertilizer prices tend to go up when commodity prices go up, but right now, that is not the only factor.
“For things like that, we’re seeing about a doubling of the price from a year ago and there’s a few other issues going on: there’s higher transportation costs, Hurricane Ida has shut down some of the ports for bringing it in, as well as some of the fertilizer plants,” according to Scott Gerlt.
For example, Bayer’s glyphosate plant in Louisiana remains closed, nearly a month after Ida.
One farmer says that things were already bad before the hurricane, and the current prices for nitrogen are making him rethink some of his corn acres, and grow soybeans instead.
Others report rationing by chemical manufacturers. USDA estimates production expenses this year will be 7 percent higher than last year and higher still in 2022, with major increases expected for fertilizer, feed, and fuel.