OMAHA (DTN) -- Members of Congress from both parties are coalescing around ways to increase the number of commercial truck drivers with the shortage of truck drivers viewed as one of the major problems facing supply chains that has backlogged nearly every industry.
Executives from across the agricultural and food supply chains on Wednesday highlighted a litany of challenges finding and physically getting those products or trying to ship their own products. The House Agriculture Committee had leaders in the dairy, bakery, grocery, agricultural retailers and the trucking industry testify at a supply chain hearing.
Rep. David Scott, D-Ga., chairman of the committee, pointed to problems with having enough truckers on the road. "If there is an Achilles heel in our challenge, it's with these huge vacancies in our commercial truck drivers."
Rep. Glenn "GT" Thompson, R-Pa., said the Biden administration has ignored the problem of shipping containers going back to Asia empty, putting stress on agricultural exporters. Thompson later said the Biden administration needs to look at regulatory waivers to address supply chain challenges, much like the Trump administration did early in the pandemic. Greg Ferrara, president and CEO of the National Grocers Association, said the mindset of pandemic panic buying "is what poses the greatest risk to the availability of food and the ability to keep the shelves fully stocked." Ferrara called on industry and government leaders to "assure the public there is plenty of food to go around."
Jon Samson, testifying on behalf of the American Trucking Association, highlighted the need for infrastructure investment, but also workforce development. Samson said the trucking industry is short as many as 80,000 drivers, based on statistics released by ATA last week. Samson said this has been a systemic problem for years, but the pandemic exacerbated the issue. Samson said the ATA has been trying to work more with schools, Future Farmers of America and people coming out of the military, but that is limited because of age issues.
"Right now, we miss that 18- to 21-year-old recruitment," Samson said. "We can't go to the high schools. We can't go to the Future Farmers of America to recruit them as an original career."
Samson said the pandemic also has led some older drivers to retire.
While at least 48 states allow drivers at 18 to obtain a Commercial Driver's License (CDL) within their states, those younger drivers are not allowed to drive trucks across state lines. There is a proposed pilot program at the Department of Transportation, but it has not gone into effect yet. Lawmakers from both parties are championing the Drive Safe Act to allow those younger drivers to haul nationally.
Rep. Dusty Johnson, R-S.D., said he is leading a letter with at least 55 lawmakers asking the Department of Transportation to reconsider a proposed rule under the Trump administration to allow younger drivers to operate through interstate trucking.
In the Senate, Iowa GOP Sens. Joni Ernst and Chuck Grassley led a letter also calling for opening up CDLs to 18-year-olds and called on the Federal Motor Carrier Safety Administration to lower the age limit.
Scott called on companies to reach out to military veterans to get them licensed as truck drivers, as well as reaching out to unions such as the Teamsters to recruit truckers back into the industry now.
BAKING NEEDS AND FOOD VS FUEL
Ed Cinco, director of purchasing for Schwebel's Baking Co. in Youngstown, Ohio, testifying for the American Bakers Association, said the industry is also facing a shortage of workers, forcing them to shut down production lines and leading to fewer baking products. He pointed to problems with gluten, durum and higher sugar prices leading to reformulation changes in baking products. He also highlighted higher costs for soybean oil.
"The demand for soybean oil and other vegetable oils has exceeded the current domestic supply," Cinco said, pointing to the 2020 drought, lower-than-expected plantings in 2021, and the EPA renewable biodiesel program under the RFS.
The American Bakers Association said prices for vegetable oils has tripled in the past year and pointed to the use of soybean oil for biodiesel as one of the problems. ABA wants EPA to dial back the blending volumes for biodiesel as a result. While they did not testify Wednesday, the American Soybean Association and the National Biodiesel Board pushed back on the idea that food inflation is being tied back to the RFS.
"There is currently not a soy oil supply shortage, nor is one envisioned by year-end, but there are in fact very real supply chain challenges impacting U.S. agriculture," said Kevin Scott, a South Dakota farmer and president of the American Soybean Association. "We greatly appreciate the committee's attention to these genuine issues and how to address them. Likewise, we hope the administration will demonstrate the commitment to biofuels and the RFS it has pledged despite these shortage rumors."
Rep. Cheri Bustos, D-Ill., also said Congress and industry need to look at long-term solutions and not "stop-gap measures that do more harm than good," such as adjusting the RFS blend volumes.
SHIPPING CONTAINER CRISIS
Mike Durkin, president and CEO of Leprino Foods Co., the country's largest cheese producer, and a producer of other dairy products, sounded the alarm on exports, pointing to as many as 70% of containers on West Coast ports going back to Asia empty. That has hurt Leprino, which exports as much as 26% of its products to more than 50 countries.
Leprino has seen more than 100 shipping bookings canceled this year. That has led to a five-month delay, causing Leprino to lose some customers because of the delays and the spike in shipping costs.
"Over 99% of our ocean shipments for 2021 have been canceled or rebooked for a later date at least once, in some cases up to 10 times or more," Durkin said.
The loss of shipping "cascades through the entire supply chain," Durkin said, because it causes Leprino and other companies to push more dairy products back into the U.S. market, pressing wholesale prices and the prices for farmers. Durkin called for Congress to pass the Ocean Shipping Reform Act that would give the Federal Maritime Commission more teeth to address detention practices and charges, as well as shipping bookings.
"When you think about 70% of those containers going back empty, it's just hard to understand how we can let that happen," Durkin said, adding that shippers are then charged fees for their containers remaining at port too long. Durkin said that between 2020 and 2022, Leprino's shipping costs will have doubled as a company.
Durkin also called for action from the Biden administration because it can take a year or longer for legislation to lead to agency rulemaking. More is needed to address the situation immediately, he said.
Rod Wells, chief supply chain officer for GROWMARK out of Bloomington, Illinois, testified about the infrastructure needs of the agriculture industry, highlighting the importance of inland waterways.
Rep. Cheri Bustos, D-Ill., plugged the provisions of the infrastructure bill now waiting on a House vote, pointing to the $150 billion for roads and bridges, as well as $20 billion for waterway infrastructure.
Wells said some locks on the major inland waterways "are not very far away from a catastrophe that would totally stop transportation on the river and would lead to critical shortages of fertilizer products and the same going down the river."
Lawmakers highlighted possible regulatory relief, including raising weight limits for transportation and loosening the rules for hours of service that limits the amount of time a trucker can travel.
"Those would all be some immediate impacts on the transportation side of the business," Wells said.
Dealing with labor issues, Wells and others also raised the current H-2A program to bring in foreign guest workers, and the need to expand the program for year-round businesses. The House passed a bill earlier this year, the Farmworker Modernization Act, but the bill has not been taken up in the Senate.
Republican lawmakers and industry officials also raised concerns about vaccine mandates on larger companies. Samson said there are major trucking companies with as many as 50% of their truckers who are unvaccinated and willing to change jobs rather than get vaccinated.
Republicans called for a pause in the vaccine mandate. "This hard mandate almost feels like it's going to create a disaster," said Rep. Scott DesJarlais, R-Tenn., who highlighted natural immunity.
Higher natural gas prices, a major component in nitrogen fertilizer, has spiked, along with other fuel prices, but nobody pointed to any specific price gouging as a result.
"I can't point to any instances where I can say price gouging has occurred, but I can tell you that it is of great concern to our members and our farmer owners," Wells said.
But producers are seeing input products reduced in several ways. Wells noted a lot of glyphosate and glufosinate comes from China, but production and shipping of those herbicides also have slowed down.
"So, you have an issue of the crop protection products being a lot more expensive and not being readily available, and now we're getting to the point where they're not available at all or not in the time period needed for the crop. So that is going to be an incredible strain that is going to continue to get worse," said Jon Schwalls, executive officer for a Georgia fruit and vegetable company, Southern Valley.
Republicans on the committee also criticized EPA actions, such as the move to restrict the use of chlorpyrifos for food use. Last month, more than 80 agricultural groups wrote EPA to delay its move. (See https://www.dtnpf.com/….)
Wells said regulations affecting chemical inputs also translate into changing how a farmer buys seeds, or whether the farmer can buy their traditional seeds.
"So, disruptions on one side of the supply chain directly impact the other side of the supply chain," Wells said. "One of our concerns is that if there's a disruption from an EPA rule -- some type that takes a tool away from us -- that there is another tool that's effective against the weeds or whatever we're trying to control."
Chris Clayton can be reached at Chris.Clayton@dtn.com
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