Alan Bjerga, NMPF: Hello, and welcome to the Dairy Defined podcast. Challenges at US ports and their impact on agricultural exports were center stage at the National Press Club last week, thanks to a webinar sponsored by the National Milk Producers Federation, the US Dairy Export Council and Agri-Pulse.
Krysta Harden, President and CEO of USDEC, moderated one of two panels featuring top agricultural policy transportation and dairy leaders. Speaking on her panel, a lightly edited version of which we bring you today, is USDA Secretary Tom Vilsack, John Porcari, the Biden Administration Supply Chain Ports Envoy, Representatives John Garamendi, a Democrat of California, and Dusty Johnson, a Republican of South Dakota, who co-sponsored the bill to encourage smoother shipment of agricultural exports that passed the House of Representatives.
We join the panel at Harden’s introduction.
Krysta Harden, USDEC: And here, I’m going to very, very brief introductions because I know that we want to get right to the topics of the day. We’re going to talk about some solutions. It’s my pleasure and honor to introduce Secretary Vilsack, but I have worked for him directly in four different positions, so I know he does not want an introduction and I also know he really does not need one. I’ll just say welcome and thank you, sir. One thing I will say about you in all my positions, you’re not about identifying the problem. You’re about finding solutions and answers.
Sec. Tom Vilsack, USDA: Thank you.
Krysta Harden, USDEC: I think that just sums it up on why you’re here today. We’ll look forward to hearing from you. Next to him is John Porcari. We’re so excited that you’re with us, Mr. Porcari. He is the Port Envoy for the Biden-Harris Administration on Supply Chain Disruptions. It’s a task force that you’re leading I believe. Thank you for that. He is a former Deputy of the Department of Transportation, so he’s very well prepared for these kinds of issues. We’re very honored and appreciate you taking the time to be here in person. Thank you.
Joined virtually by two very important members of Congress who’ve been really good friends to agriculture and have really taken the issues that have been discussed already, and we’re going to dig even deeper into. We really appreciate them both taking their time today. John Garamendi from California’s Third District. He’s on the Transportation Infrastructure Committee. Thank you, sir. We’re also joined by Congressman Dusty Johnson of South Dakota, a recognized leader on rural issues and a member of the Ag Committee. They came together in Bipartisan way, introduced the Ocean’s Shipping Reform Act of 2021, a Bipartisan legislation. Really appreciate the efforts that both of you have made to look for solutions to some of the issues we’re talking about.
With that, that’s our panel. We’re excited to have everyone and appreciate their time. With that, Mr. Secretary, I’m going to let you start and give us a little overview of what you’re up to.
Sec. Tom Vilsack, USDA: Krysta, thanks very much. John, this is a very important meeting because for all these years I though I was working for Krysta. Now I find out that it’s not, it’s the other way around. It’s great to be with her, and I appreciate her leadership with the US Dairy Export Council. John, let me just say in front of all these folks, we really appreciate the work that you’re doing on a very difficult set of issues with reference to our ports. You have been incredibly available whenever I’ve had to call a moment’s notice, and really appreciate the partnership with what we’re going to announce today. Thank you very much for your leadership.
To the two members of Congress, thank you very much for putting the spotlight on this issue with your Ocean Shipping Reform Act. I think it really does crystallize the important role that we need to play as policy makers. I think you recognized the problem, and certainly appreciate your leadership and hope that this gets a good hearing in Congress. In December 2021, Secretary Buttigieg and I sent a letter to ocean carriers who service the US, urging those ocean carriers to help mitigate the disruption that was taking place in agricultural exports by restoring reciprocal treatment of imports and exports, and improving service.
I will say that I see Michael Durkin is here today, and he has also taken an incredible leadership position on this issue for the dairy industry and for agriculture generally. He essentially suggested there was a need for reciprocity, and he’s certainly right. We know that few containers are available. Our agricultural companies are seeing significant charges assessed to them, incredibly high fees that they have to pay. What pains them most of all I think is the fact that they see a lot of empty containers leaving our ports headed to markets that should be filled with agricultural products.
This got to the point where in Oakland there was a suspension of activity on the part of many of these carriers. That’s the reason why Secretary Buttigieg and I sent the letter. It’s important to agriculture because at any given year, 20-30% of what we grow and raise in this country is exported. It absolutely impacts and affects the bottom line of agricultural producers. In most cases, it’s 20, or in some cases more than 20% of the net income that is experienced by farmers, ranchers, and producers. Certainly, there are hundreds of thousands, if not millions, of jobs that are connected directly to agricultural exports. It’s important for us to resolve the disruptions that are occurring.
We identified early in the administration resources under the Commodity Credit Corporation, which we felt could justifiably be used to try to address some of the issues, especially as it relates to empty containers. Today, we’re announcing a partnership with John Porcari’s assistance and help, as well as Secretary Buttigieg’s help at the Department of Transportation, a partnership between the USDA, the Department of Transportation, the Port Envoy, and the Port of Oakland. The goal of is essentially to get a quicker pickup of empty containers, provide access so those containers can be filled with agricultural products, avoid the congestion that often occurs in the ports, and hopefully avoid surcharges and additional fees, and in fact hopefully see many of those empty containers filled with agricultural products.
Here’s how it’s going to work. The Port of Oakland is going to make available a 25 acre site where ag companies can use this side to fill empty containers with American agricultural commodities. We hope to have this operational as soon as early March. The USDA is going to pay 60% of the cost of the startup of this particular effort. The Port of Oakland will provide the space, the containers will be made available to ag companies and cooperatives. They will fill them up with commodities. There will be a dedicated gate with the ability to pre-cool reefer containers so that perishable items can be placed in these containers.
The Department of Agriculture will also provide the shippers a subsidy for each container of $125.00 per container to basically offset some of the logistic costs of moving containers here and there. We believe that the combination of the assistance of subsidy and the assistance of this location will help us see an expanded export of nuts, dairy, wine, meat, hay, tomatoes, citrus, rice, soybeans, and other agricultural products, particularly those that are being produced on the West Coast. We’re excited about this, and we think it will service Asian markets. Seven out of the 10 top markets for American agriculture are in Asia. It’s incredibly important that we do this.
One final comment, here’s why it’s important to companies like Leprino Cheese, they have established over the course of many, many years, as have all of American commodity groups, the ability to deliver safe, available, amply supply of American products in these Asian markets on a very predictable and reliable basis. When there is this disruption that they’re currently facing, it makes it more difficult for them to maintain that market reputation. With that market reputation, you also risk the loss of market share. Once you lose market share in these competitive circumstances, it is very difficult to get it back. It’s important for us to start this pilot effort in the Port of Oakland. The hope and the goal is that we’re able to expand this opportunity in other ports along the coast in the hope that eventually we see a more free-flowing effort on the export side.
A lot of attention in this port issue has been paid to imports, and rightfully so, but with this announcement we hope to be able to make sure that people understand this isn’t just an import issue, it’s also an export issue. The Department of Agriculture wants to be part of the solution and not part of the problem. Thank you, Krysta.
Krysta Harden, USDEC: Thank you, Mr. Secretary. That was very exciting. I know there will be questions from our audiences, both in the room and online, about the details. That’s exciting. That is positive. Mr. Porcari, thank you so much for leading this task force, for being a part of this. Mr. Secretary said you’ve been so available to all of us to talk about these issues. We’d love some comments from you as well.
John Porcari, Port Envoy: Thank you, it’s my pleasure. Thank you all for having me here today. This is one group I don’t need to tell about the global dislocations in the supply chains. You’re living it every day. As Secretary Vilsack said, while the focus is often on imports, on products coming to America, we need to have an equal focus on exports as well. They’re crucial to our economy. We’ve been focused like laser, all of us, on agricultural exports since these supply chain disruptions began.
As you all know, we’re the world’s largest agricultural exporter. We had a record year. Looking forward to another record year. But there’s much more that we can do. At the same time as we had this record year, California ports had a 9% drop in containerized agricultural exports between May and September 2021. That 9% average was a 15% drop at the Port of Long Beach, an 18% drop at the Port of Los Angeles, and a staggering 34% drop at the Port of Oakland. As you all know, Oakland’s historically been one of our nation’s strongest agricultural exporting ports.
That translates into $2.1 billion in lost California agricultural exports over the same time period from the state of California alone. It’s had a nationwide impact as well, obviously. Why is this happening? One, because of the economics of containers right now. Exporting an empty container is simply more valuable to ocean carriers than a container filled agricultural products right now. The price of a filled export container went from $650.00 to $1,000.00 over the last year, while going the other way, the price of a container for import went from $4,300.00 to $13,600.00. So, you can see the driving economics that are working against US agricultural exports.
The second reason is the record-setting volumes in container traffic that the pandemic brought. We shifted our spending from restaurants and theaters to buying goods and imported goods for the most part. That means an unprecedented shortage of chassis, containers, truckers, and the entire ecosystem that serves trade. The third reason, and Secretary Vilsack mentioned this, is the loss of ocean carrier service. They’re concentrating on fewer ports and the most lucrative service. That’s particularly to Port of Oakland, which lost some Far East and Southeast Asian service that we hope to bring back.
We’re attacking the problem from both ends, finding ways to incentivize and streamline agricultural exports and working with these ocean carriers to restore service. The announcement that you heard today for the Port of Oakland is only one part of a multi-prong strategy. Think of it as first firing a warning shot across the bowel of ocean carriers that we are watching and responding on agriculture exports. It’s important to our nation. Promotion of US exports is a core part of the Federal Maritime Commission’s mission, and we urge the Federal Maritime Commission to honor that.
Restoring critical Southeast Asian and Far East service in general at ports like Oakland is important as well. That’s another part of the strategy. The partnership that brought this deal here today is not done. Now we need to work on making sure the service is there for the US agricultural needs. One of the ways that we’re doing that around the country is establishing popup sites, this one is Oakland, we’ve previously announced multiple sites in Georgia, more to follow. These help both imports and exports, and for agricultural exports some of these popup sites in Georgia for example are hundreds of miles closer to the point of origin, making it that much easier to export the goods.
We’ll continue to build fluidity at the ports so that exports aren’t disadvantaged. We’ll emphasize rail use as part of the way that we can do that. Finally, I would just mention that in the unprecedented port funding that comes with the Bipartisan Infrastructure Law, the Port Infrastructure and Development program grants are going to be enabling and encouraging US exports as part of that infrastructure strategy. We’re working this multi-prong strategy in the short-term, through daily operational work, and in the longterm through a Port Action Plan that President Biden and the National Economic Council have previously rolled out.
We’ll have better data, state freight plans to support the kind of infrastructure projects that help us export, and looking at exporting as a system of systems and making sure that every weak link in that system is worked on. Thanks.
Krysta Harden, USDEC: Great. Thank you. Very, very good positive news. Congressman Garamendi, I would love to hear from you.
Rep. John Garamendi (D-CA): I’ll be delighted to comment. Mr. Secretary and Mr. Porcari, thank you so very much. Appreciate your presentation. Particularly, Mr. Porcari, we’ve worked almost 12 years together on the various maritime issues, so thank you for your knowledge and your expertise on it. Bottom line is, gentlemen, all that you’re doing isn’t going to solve the problem. The problem is, the shippers, the ocean carriers simply do not understand the word “reciprocity”. They don’t understand that this is a two way street, in and out. Until they get that message, all of the good things that you’re doing is simply not going to solve the problem.
The economics are going to drive those ocean carriers to do exactly what they’re doing until there is a law that says you can’t do it. If you’re bringing a container full into the United States then you’re going to take a container out that is also full. Otherwise, you’re not coming. For the Port of Oakland, good luck. There’s a reason that those carriers are not in the Port of Oakland today. They’re not there because they can make more money sitting outside the Ports of LA and Long Beach waiting for an empty container that they can then put their ship back to the Western Pacific.
There ought to be a law, and by God, we’re going to get a law. We’re going to get something in place that provides the necessary tools so that you two gentlemen and others that follow in your footsteps will have the power to make right in this economic situation. There’s one thing that our bill doesn’t do, and I surely hope that a bill is introduced and hearings take place, and that is to remove the exemption from all of the antitrust laws that the ocean shippers presently have.
I’m going to turn this over to my colleagues, who I’ve had the great pleasure of working with. He’s going to lay on you what the bill does and how it will work. Dusty, I know you’re always prepared so have at it.
Rep. Dusty Johnson (R-SD): It has been a pleasure to work with John Garamendi, and think in part because he and I both realize that this is not a Republican problem or a Democrat problem. It’s an American problem. I thought the Secretary and Mr. Porcari did a very good job of laying out the complexities, as well as some of the things that they’ve been working on to make this better. To me, it’s really a three prong issue. Number one, we do need investments in the ports. Even members of Congress who didn’t vote for the Bipartisan infrastructure package for one provision or another, I think really celebrate this investment in the port. That’s number one.
Number two, we have I think operational adjustments that are being made. Mr. Secretary, I’m really excited about these popup staging areas. I’m even more excited, as you talk about if it works expanding this. You know what number three is, as exactly John Garamendi suggested, we do need regulatory reform because right now the interests of the ocean carriers are not particularly well aligned to the interests of American shippers. John’s right. We do need OSRA 2021. What does it do? Well, at it’s heart it does demand reciprocity. It does set minimum service standards. It does make it clear that the burden for approving detention and de-merge fees are appropriate are going to be on the carriers that impose them.
I think collectively these will give the FMC the tools that they need to make this system work better, to make it more efficient and more effective. I’m going to put a pin in all that. I just want to say, because I’ve talked about how many… We pass throughout the House, we’ve got the popup staging area coming. We’ve got investments being made in the port. I think we’re only about 40% of the way there. We cannot take our foot off the pedal. We have to make sure that we continue to push these things forward.
I was talking to the dry bean and lentil folks. They told me that still they have 30 or 40% of their shipments being canceled. That’s a new number. That is not something from two or five months ago. So, we still have a very real problem and I just want to humbly, by way of closing off in those three areas, those three prongs I mentioned, things that I think we can do to close the gap between where we’re at and where we need to be. Number one, with regard to these capital expenses, I think we want to make sure that the administration puts out dollars, that they are focused like a laser on improving efficiency and effectiveness, and that we don’t distracted by other agendas and what these dollars can do to maybe further those agendas. Efficiency and effectiveness, number one.
Second prong, operational adjustments. Trucking was talked about a lot in the last panel, and I do think February 7th is not the right date to have these new training requirements come in to the American trucking industry. I think we should have a short-term stay so that we can make sure that we aren’t imposing a new barrier on American truck drivers during this supply chain crunch. Number three, Garamendi and Johnson have gotten all this run through the House. Let’s get it through the Senate. I’m excited for [inaudible 00:20:40] Klobuchar. They have been talking publicly about doing something.
They’re building momentum on their side. I think their text is going to be a little different than ours. I would tell you, John and Dusty, have the stew exactly right because we worked with so many in industry to get it right. Listen, we’ll try to bring the Senate around to our perfect way of thinking, but their action is welcome.
Krysta Harden, USDEC: A lot of ideas out there. Mr. Porcari, anything you want to react to as we look at the ocean carriers and we know they were at record profits last year? We know this is a very sensitive situation. Any thoughts on some of the issues that were raised by the Congressmen?
John Porcari, Port Envoy: First, the principle of reciprocity is very important. We are an exporting nation, and it is clear from the data and from the evidence that agricultural exports are being disadvantaged right now. That’s unacceptable. We do need to move forward. I would point out that data is maybe one of the unspoken parts of this. The more transparent data we have for every part of the goods movement chain, the better off we are in terms of being able to fix it. This is an industry that traditionally doesn’t share data very much in direct contrast to say the airline industry.
All of us would benefit by that data sharing. It would be a more efficient industry, and we’d be able to see around corners a little bit, and anticipate the next economic shock, respond to the next natural disaster, all the kinds of things that you know happen to global trade would benefit from more transparent information that is closely guarded and proprietary right now.
Rep. John Garamendi (D-CA): If I might insert something here-
Krysta Harden, USDEC: Please.
Rep. John Garamendi (D-CA): This is John Garamendi. Who owns those ocean carriers? I think we know, don’t we, Mr. Porcari? Could you lay out the ownership of the five largest that control some 70-80% of the traffic?
John Porcari, Port Envoy: Yes, Congressman. The short answer is, none of them are American. 2% of the global shipping market is US flag vessels. It’s France, Italy, Nordic countries, China. It’s-
Rep. John Garamendi (D-CA): Well, wait a minute. Let’s get right to the heart of it. China, Taiwan, Korea. To the West Coast ports, those are the three big shippers. Then [inaudible 00:23:08] could be the fourth or the fifth. Is that correct?
John Porcari, Port Envoy: That’s correct.
Rep. John Garamendi (D-CA): That is correct. Yes, it is correct. My point is this, this is an international trade issue of extraordinary importance to my district, to Dusty’s district, and to America. Is the administration putting any pressure on those countries who own or control those shipping lines to make this right for American shippers? My question to both of you.
John Porcari, Port Envoy: Two points on that. First, we’ve been working directly with those ocean carriers at the C-suite level, and to make clear what the nation’s objections are. And two, yes the Department of State has actually be a critical part, among other agencies, of this discussion.
Rep. John Garamendi (D-CA): So, saying over that period of time that they’ve been involved, they changed from 40% empty to 70% empty returning to the Western Pacific. Not very effective work.
Krysta Harden, USDEC: Mr. Secretary, you want to make some comments to that?
Sec. Tom Vilsack, USDA: There are a couple of things I’d like to respond to the Congressman on. Number one, Congressman, there is not any effort here to suggest that we’re proposing with this popup is the only solution, but I will tell you that it’s an important first step. I don’t think it should be diminished in terms of our ability to try to figure out ways in which we can encourage folks to understand and appreciate the necessity of dealing with this. Number two, we are seeing some of the shippers coming back to the Port of Oakland by virtue of the letter that was sent by Secretary [Buttigeg 00:24:48] and myself. I think there are now three significant ones that have returned to that port.
So, I think there is an opportunity there for partnership. Number three, we hope, and we began the conversations with the Port of LA and the Port of Long Beach, but they see the opportunity as well and we are open to working collectively with them to try to address this issue from the perspective of the USDA. There is ongoing effort here. Under the circumstances, given that ongoing effort, we’re doing this with limited resources from a standpoint of personnel, at the Department of Agriculture in part, Congressman, because we’re operating on a continuing resolution.
We don’t have a budget yet, so you can put pressure on us. I’m going to put pressure right back on you guys. Give me a budget. Give me some people.
Rep. John Garamendi (D-CA): Fair enough. Fair enough.
Rep. Dusty Johnson (R-SD): Krysta, can I double down on something Mr. Porcari said, Krysta?
Krysta Harden, USDEC: Yes, sir, you certainly can.
Rep. Dusty Johnson (R-SD): He talked about when our shippers are not able to deliver these agricultural products it endangers continued market access. He is exactly right. That’s what I’m hearing from ag producers. They’ve got their international partners who are wondering “Can we rely on America?” They’ve been able to rely on us decade in and decade out. We’ve expanded some of those markets in part because of the big investment that USDA, Secretary Vilsack and his predecessors have made in helping folks establish these international markets.
We cannot afford to throw that investment away. Some of them, as I’m sure you all know, are turning toward air freight to try to deliver a product on time. That is not sustainable. These markets are at risk, which is why we got to close the gap from the 40%, but I think we’re apt to the 100% that’s going to deliver us a full solution.
Krysta Harden, USDEC: Thank you. Well said.
John Porcari, Port Envoy: If I may, the consistency and predictability part, just to build on that, this is not just a West Coast issue. It is most acute in the West Coast ports, but we are seeing and hearing the same thing on the East Coast and the Gulf Coast. The Port of Houston, with agricultural products, just recently went through some of the same difficulties. I would point out there are also industry best practices that can actually help build consistency and predictability, like windows for delivering containers that stay fixed and don’t change. The Port of Savannah is doing that now. Two of the ocean carriers have agreed to do that. That alone gives the agricultural exporters a more certain window for exports that doesn’t change on a daily basis.
Those are the kinds of operational changes that we can make in the short-term. In the longer term, we simply have to build more capacity and we need a more level playing field, no question about it.
Krysta Harden, USDEC: Thank you, sir. I think we have a question from the audience. Shawna’s going to share that with us.
Shawna Morris, NMPF: Yeah, sure. Thank you. One of the questions actually touched on the point Mr. Porcari just made at the end, the impact that vessel changes have and whether anything can be done about that. There were several though on whether the US would consider adjusting truck weights to higher, so the containers could be loaded with more weight in them, pointing out that some of the competitors are allowed to load higher in their markets. Thanks.
John Porcari, Port Envoy: It’s a real issue, and again, a short-term issue today for agricultural exporters that vessel sailing schedules are changing dramatically. Trade lanes are changing. They are changing the ports that they serve. Even when you know that service is coming to a specific port, bringing it to a destination you’re trying to get to, you don’t have a predictable window that you can respond in. That’s the first part of it. On truck size and weight, as you know, outside of use of the Stafford Act and other emergency powers, a truck size and weight are established at the state level with federal oversight.
It’s an ongoing discussion with the Federal Motor Carrier Safety Administration as to what and when would make sense, but I know those discussions are going on right now on truck size and weight. I would point out, this is a perennial issue. This is not just a short-term issue related to the difficulties in exporting right now. The larger issue has to be tackled in part through infrastructure that can accommodate the larger weight.
Sec. Tom Vilsack, USDA: As a former Governor, that’s really a big issue. That’s one of the reasons why the states have so much authority over this, is because they’re the ones who have repair the roads when they’re damaged. I’d also say there’s also an interesting issue with reference to the Bipartisan Infrastructure Bill. As you repair bridges, you can strengthen those bridges to actually handle more weight. I think that’s part of what the Department of Transportation is looking at for the longterm in terms of greater resilience and greater efficiency in our transportation system.
Krysta Harden, USDEC: Very good. Thank you. Is there a question in the room?
Speaker 8: A question for the law makers, Congressman Garamendi, Congressman Miller-
Rep. Dusty Johnson (R-SD): Johnson.
Speaker 8: My best friend in college’s name was Dusty Miller. You have to forgive me. I always do that when you’re… Anyway. Congressman Dusty Johnson. You were both very diplomatic when it came to the Senate version of the bill. Congressman Johnson, you said we’re hoping to bring them to our way of thinking. I’m assuming you’re talking about the Empties provision in your bill, is very specific wording. It says these carriers cannot just cancel the bookings and send back empties. How concerned are you that the Senate version does not have that? I understand it addresses it, but doesn’t have that. Is this something that you’re willing to take up in negotiations afterwards? How important is that?
Rep. Dusty Johnson (R-SD): I think it is quite important. Listen, a lot of you guys have more involvement on the Hill than I have. I get it. The House is not going to get everything the House wants in it’s bill. I hope we’re headed to conference. I hope the Senate passes their version quickly, expeditiously. In conference, they are going to get some of what they want, and we’re going to get some of what we want. I do think that overwhelmingly the stakeholder community is comfortable with the Garamendi-Johnson language. I think they have reviewed it. I think they have vetted it. I think they believe that it does the best job of balancing these interests.
So, you’re right about the empties, but it’s not just the empties. It’s also about minimum standards for service that I think are critically important. In general, I think the Senate language will do a lot more to provide FMC rule making authority to fill in some of these gaps. I’m a big believer that Congress should not kick too many things to the administration. Let’s come together and say with a strong Clarion voice what the minimum standards are, what does reciprocity mean, what does being a common carrier mean? If you’re going to use an American port, what does that mean to the United States Congress with regard to how you’re going to step up?
Rep. Dusty Johnson (R-SD): I think we should be able to get to a point in conference or some other legislative mechanism where we put a little bit more meat on that bone than perhaps the Senate version intends to. John, am I getting that right?
Rep. John Garamendi (D-CA): Yes, you got it exactly right. I won’t add to it. We’ll get on to it in the next question.
Krysta Harden, USDEC: All right. Thank you so much. Shawna, do you have one more from online?
Shawna Morris, NMPF: We have several online, so however many you’d like, Krysta. There was a question about the fact that although the 24/7 operations of the ports are certainly welcome, that there’s a number of other bottlenecks and whether there can be additional steps taken to make better use of that expansion of hours.
John Porcari, Port Envoy: It’s a great question, and 24/7 is a process, not a light switch. As much as we’d like to turn the entire supply chain into a 24/7 operation overnight, it is much more than the port. It’s all the way through the middle mile with the railroads and trucking. It’s the distribution centers, the fulfillment centers, the warehouses. Unless all of that goods in movement changes activated 24/7, you only have limited impact on the port side doing it. What we’re trying to do, quite frankly, is start with the leadership of the ports in Los Angeles and Long Beach who are committed to 24/7 operations, and working with some of the major cargo owners that can actually pull cargo and deliver cargo off-peak, and through those commitments, those continuing commitments and building on those commitments, to drive more off-peak use.
That’s where the capacity is for the entire goods movement chain in the short-term. If you look at the US ports, in particular in the goods movement chain in general, compared to the rest of the world, it is under-utilized capacity compared to how our competitor nations actually operate.
Krysta Harden, USDEC: Thank you. We don’t have a lot of time, believe it or not. We’re running out. I wanted to make sure that I did ask this question. I will start with you, Mr. Secretary, and maybe others can join in. A lot of interest here today. A lot of passion on this topic. Over 1,200 participants I think on the phone. But still, the main news story, most of the focus is on imports. What can we do in agriculture and what can we do as an industry collectively through the supply chain to continue to raise this issue and help everyone understand? We know you do, Mr. Porcari. We know you do. We knew the Congressmen understand. But to raise the awareness, the interest on exports, people don’t think about the US being such an export country, but we are. We certainly are in agriculture. What can we do? How do we own this? How do we raise the attention?
Sec. Tom Vilsack, USDA: I think there are a couple of things. Number one, I think you have to make sure that the jobs aspect of this issue is underscored. I think a lot of people working in companies do not understand and appreciate that what they’re doing is actually going to end up someplace outside the United States. I think it’s important and incumbent upon policy makers, myself, the members of Congress, John, members of the industry, industry leaders, to make sure that people understand who are working that their job is connected to exports.
Number two, this is a little far field from the response that you may anticipate, but I think it’s really important for us to build a sense of trust in the trading relationship that we have with other countries. I think the unfortunate circumstance is, when you talk about exports people think of trade. When they think of trade, they’ve been encouraged to think that we’re getting the short end of the stick on trade agreements, and that puts them in a negative standpoint from an export perspective. I think it’s important for us to rebuild a sense of trust in trading relationships.
Now, how do you do that? Well, you do it by enforcing trade agreements. The recent action in dairy with Canada was an effort. The recent efforts to try to give our Chinese friends the opportunity to live up to their phase one responsibility by purchasing another $17 billion above and beyond what they have to purchase so that they make good on their phase one is another mechanism. Working to reduce trade barriers recently with India, and pork opportunities in India, Vietnam, [inaudible 00:36:29] making a whole series of products more available in that important market. So, rebuilding trust.
I think if we educate people about the economic impact of exports, and then the final thing I would say is, there needs to be an understanding that it’s also a way of branding the United States, of being able to show that we are capable of producing quality products, safe products, safe food products. That is a brand that I think that we want to continue to impress upon folks here in this country.
Krysta Harden, USDEC: Great answer. Mr. Porcari, are you going to add to that?
John Porcari, Port Envoy: It’s tough to add anything to what the Secretary said, but I would just point out in a very positive way, the agricultural export industry has been punching above its weight in this discussion. It has been very vocal. It’s important that you continue to do that. We’ve been an agricultural exporting nation since the founding of the Republic, and some of us in our day to day lives may not have that connection anymore working through the media and other ways to get the word out that it’s a vital part of our economy, that is linked to jobs all over America and that US exports and trade around the world is a critical part of our relationship with the rest of the world is an important message all the way across the board.
Krysta Harden, USDEC: Thank you so much. Either one of the Congressmen have anything to add to the comments?
Rep. John Garamendi (D-CA): First of all, Mr. Secretary and Mr. Porcari, thank you so very much for your efforts on all of this. This issue is here and now. I know Dusty has received calls from this agricultural exporters, and I have, and they’re going to lose their markets, as Dusty explained earlier on. The Port of Oakland’s program is very, very good, but it won’t be worth a hoot unless there is a ship that will take those containers from that 25 acre site and put those containers on. I think we need to use every lever available, and that is putting pressure on those ocean shipping companies and say, “Folks, if you want access, you’re going to have to not continue this 70% empty going back to the West.” You’re going to have to 50%, 40%, whatever the number is.
Otherwise, you’re not going to come here. Well, you’re going to be at the back of the line waiting to get into the port. There’s a lot of levers here. A law that we’re proposing will help, but this is here and now. I know half a dozen farmers and shippers in my district that may very well not survive this year because they cannot get their products on a ship, and they will lose their markets as was discussed earlier. So let’s get with it. Let’s use every power we have. Let’s twist arms, do whatever necessary to get those folks into the Port of Oakland to pick up those containers. By the way, 30 days from now isn’t going to suffice for at least one major agricultural shipper in this state.
Dusty, I’m going to calm down. It’s up to you.
Krysta Harden, USDEC: Congressman Dusty Johnson?
Rep. Dusty Johnson (R-SD): I think that’s exceptionally well said, and I would just note Krysta, you’re right, people tend to think about imports into this country rather than exports. The thing that I love about OSRA, the bill that John and I have, is that although it really does make the whole system more efficient, and in that way it helps imports, but it would really most directly and most quickly help American exports, both manufactured goods as well as agricultural goods. I would close by saying this, if I had to have our country do three things in the short term to make sure that American exports were getting the attention they deserved, it would be pass OSRA. Pass OSRA. And Pass OSRA.
Krysta Harden, USDEC: Very good. Nice ending comments. We’re getting the flash now. I think we’re out of time. I’ll ask Sarah to come up and give us our final comments, if our panelists will just wait and let Sarah send us off.
Sarah Wyant, Agri-Pulse: Thank you, Krysta, and thanks to all of you who’ve served on this panel today, not only the earlier panel, but Secretary Vilsack, Mr. Porcari, Congressman Garamendi and Congressman Johnson, thank you so much for all of your input. I think it’s very clear to all of us who have been listening both online and in the room that there is a lot of passion around this issue, also a lot of frustration. But we heard some solutions, some things that are moving forward, and some additional asks in ways that we can continue to work collectively in American agriculture to try to find more ways to ease the supply chain congestion, the disruptions, and also to get ag exports moving in the way that we know that they can happen and can get moving to our very precious international customers so that they can make sure that US agriculture is always considered to be a reliable supplier.
Alan Bjerga, NMPF: That’s it for today’s podcast. For more on NMPS policy priorities, visit NMPF.org. You can find this podcast online at NMPF.org or subscribe to it on Apple Podcast, Spotify, Google Podcast and Amazon Music under the podcast name, “Dairy Defined.” Thank you for joining us.
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