Labor shortage core part of supply chain problems, farmer/soybean board director says

KELOLAND.com Original
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SIOUX FALLS, S.D. (KELO) — Despite supply chain disruptions, South Dakota soybeans are being moved from the state, two farmers and an elevator official said.

But, the disruption from the impact could be worse next year, said Brandon R. Wipf, a farmer from north of Huron and a member of the American Soybean Association’s board of directors. Wipf is a member of ASA’s government policy committee.

“Honestly, next year it it (will likely) be bigger,” Wipf said of the supply chain problems in the U.S.

Getting needed supplies for next year’s crop could be a big supply chain problem, said David Iverson who farms near Astoria.

“Already, fertilizer is a lot higher (than in 2020),” Iverson said.

“What’s in (shipping) containers? Parts and the raw goods used in making (the inputs) needed to put next year’s crop in,” Wipf said.

Iverson said he receive a group text message on Monday morning where a farmer said he couldn’t find a needed part anywhere in the area. He needed to get the part from Canada or a salvage yard to continue with harvest, Iverson said.

That’s one negative impact from the well-publicized shipping container shortage.

But while there have been some news reports of difficulties getting soybeans to Asian markets, so far, much of the South Dakota soybeans have been shipped from the state, Wipf said.

Mark Lee of the cooperative elevator in Dell Rapids said semi-trucks were able to haul harvested soybeans to their next destination this season.

Only 5% of South Dakota’s soybeans end up in shipping containers, Wipf said

Yet, Hurricane Ida that hit New Orleans shut down bulk terminals and caused a backlog for bulk shipping this summer.

Iverson said the clogged port at Long Beach, California, the Hurricane and COVID-19, combined for a sort of perfect storm. Those combined with increased consumer demand for products, has caused prices to rise in grocery stories and created on-going concerns for farmers, Iverson said.

“Any time there is a disruption in the delivery transportation system, it adds to the cost,” Iverson said.

The impact of labor

“The root of the supply chain issues? It’s labor,” Wipf said.

Ports, factors, “Everybody is having a hard to time filling labor needs,” Wipf said.

Policy makers and lawmakers in D.C. need to examine immigration policies in areas such as H-2A temporary visas for agriculture workers, Wipf said. “That’s very important,” Wipf said.

The COVID-19 pandemic caused some of the labor force to leave jobs for higher-paying jobs, Wipf said.

Employers will need to step back and “re-evaluate how they evaluate their labor force,” he said. In most cases “That means a higher wage…,” Wipf said.

Higher wages for those who work is good for agriculture, Wipf said. Agriculture benefits from increased prosperity for others, he said.

Shipping go round

“I’m concerned about increased prices,” Iverson said. And the likely problems with logistics in transporting goods and materials, Iverson said.

Wipf said modes of transportation can clog from within. If railroads are pressed, then shippers turn to trucks. That can lead to goods being delayed as trucks fill other materials, Wipf said.

“You just can’t pin it down to one (transportation) area,” Wipf said.

The ASA cooperated with other agriculture organizations on a letter to the U.S. assistant secretary of transportation. The letter was 15 pages long. Wipf said a letter of that lengthy has never happened before in his years on government policy.

Wipf joined the ASA board of directors in 2017, according to the ASA website.

The South Dakota Department of Agriculture and Natural Resources (DANR) shared this statement about shipping issues: “The DANR remains concerned about the shipping container shortage and transportation issues affecting producers. Foreign markets are important to our agriculture community with South Dakota shipping nearly $3.3 billion in domestic agricultural exports in 2019.”

“Although DANR does not directly regulate the transportation and shipping industries we will continue to advocate for South Dakota producers by engaging with our partners to look for solutions to these complex issues,” the DANR said.

OK, for now?

South Dakota’s freight or shipping issues are lessened in part because of the drought and lower yields, Wipf said.

Still, some parts of the state may have shipping problems if yields are better than expected.

Iverson said input costs for items such as fertilizer are expected to increase but “will they even be available?”

The supply chain and labor issues appear as if they will last well into 2022, Wipf said. Farmers will be dealing with the challenges, he said.

“I’m optimistic for next year. We will be planting another crop,” Iverson said.

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