Port congestion ripple effects expected to hinder dairy

The single largest purchaser of milk in the U.S. says port congestion is a serious threat to the ag industry that needs to be addressed before trade partners lose confidence in American products.

Mike Durkin, President and Chief Executive Officer, Leprino Foods Company, testified on behalf of the International Dairy Foods Association during the House Ag Committee’s supply chain hearing.

“This export crisis may result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier,” he says. 

Durkin says he believes as containers are backlogged at ports, its caused prolonged dairy margin weakness and herd contraction.

“Now what’s going to happen from an American consumer standpoint—it’s going to increase supply in the United States per se, but it’s going to drag pricing down and make it very volatile, and what you’re going to see is actually lower milk prices for the dairy farmer,” he explains.

Durkin urged Congress to immediately pass ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help ag producers reach their foreign markets effectively.

Leprino exports 26 percent of its products produced in six states across the U.S. including Michigan.

The International Dairy Foods Association has formed a supply chain task force to develop policy recommendations to address severe supply chain disruptions.  The organization says right now the U.S. is unable to fulfill more than 20 percent of ag foreign sales due to a host of issues while prices continue to rise.  The group plans to work with industry partners, the federal government, and others to find solutions.

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