IP Crop Network, March report

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This monthly feature from SSGA’s Agronomy Action Team highlights growing conditions for Identity Preserved crops from different regions around the country. Thanks to the states/regions that contributed this month. If you would like to contribute, please get in touch with David Kee or Shane Frederick. You can also follow David Kee on Twitter for some of the latest, most-interesting information on agronomy and research that affect IP and other farmers.

Minnesota
As winter begins to lose its grip on the state, Minnesota farmers are busy planning. Input availability varies considerably across categories and locations. Farmers are also facing sticker shock on all inputs and services. Of the ones I chatted with, management plans now have versions M, N and O in place. Most of the standard tillage and fertilizer applications occurred as scheduled last fall. Consequently, minor change in crop acreage allocation is anticipated.

Minnesota’s drought-impacted area (D0-D2) has shrunk from 94% of the state in September to 57% in early March. The western third of the state is relatively drought-free, but there is limited subsurface water available. Timely rains will be needed to make a good crop. In the middle of February, soil temperatures, at 4-inch depth, ranged in the low to high 20s (oF) in the north (Crookston) and upper 20s to low 30s in the south (Lamberton). Reports are that tile lines are still open indicate the frost line is relatively shallow. This is supported by the 40-inch soil temperature (>34oF) in Crookston. Farmers are cautiously optimistic of an early planting season, but April is still three weeks away.

Michigan
The outlook for the 2022 Michigan soybean crop is positive and enthusiastic. The recent run-up in commodity process has changed some sentiment in the crop mix among growers. As crop input prices were calculated throughout the winter season, many farmers were considering the switch from corn to soybeans on some acres. This thought has moderated somewhat with increased prices, especially of corn. Fertilizer availability and weather during the planting season likely will have the biggest effect on the crop mix choices this year.

As herbicide availability and prices are still unknown in some cases, more growers are considering the choice of some non-GMO soybeans. If glyphosate and glufosinate pricing and availability become more secure, this may change. Weed control challenges continue to be a strong influence on growers’ choices as herbicide resistant marestail and common waterhemp continue to be strong considerations.

It took all of that to say that I don’t expect the soybean acreage in Michigan to be drastically different than our past acreage. But the wild ride of commodity prices and crop inputs continues and may have another curveball to throw before the crops are planted.

Illinois
In my 30 years in the ag business and 50 years being involved on the farm, I have never seen anything like what we are currently experiencing: grain markets on a huge roller coaster, record-high input prices and land sale prices and cash rents that show no signs of stopping. Last week had two grain farmers drive an auction to $21,000/acre for ground that five years ago would have brought $5,000/acre. We are definitely experiencing unprecedented times.

Corn acres in Illinois likely will be flat to possibly up a little in the good soils and flat to down on the lighter soils. Those in central/northern Illinois who apply anhydrous had the opportunity to do that at $750-$800/ton, compared to all of the spring applied anhydrous that is going to go on at $1,500/ton. Based on that, one of the largest costs in corn production is locked in at well below current market prices. Corn will get planted. As you move south that high price of N and lower-yielding soils will drive more acres to soybeans.

Current soil profiles are at maximum water holding capacity, and as soon as it dries up, we will see field activity. Not much will get planted until April 1, but a lot of work will get done if the weather allows.

The most interesting story right now is the winter wheat crop that is in the ground. Illinois ended up with around 735,000 acres planted last fall, a fairly large crop compared to the last few years. Most of the crop looks pretty good and three-fourths of the acres have had half of the spring nitrogen applied. The recent spike in price has many growers asking about planting spring wheat in central and southern Illinois. For many agronomic reasons this is strongly discouraged, but I am betting somebody will try it.

Missouri
As we roll into Spring in Missouri, we are seeing the up and down of temperatures with intermittent rain and snow showers. We are coming off two weeks of cold weather with snow and ice hitting most of the state. The Missouri Soybeans’ staff was in Portageville, MO, last week for the Missouri Soybean Merchandising Council board meeting. While down there, we saw several areas with water standing at the lower ends of the field furrows, but there was some green-up in sight. We did see several acres of wheat starting to green. Also, we did see some aerial applications beginning down there. Some producers noted that tillage had begun.

Overall, we are seeing the same trends across the U.S. There are many producers working to secure inputs for the season, but this is a trend across the U.S. Also, the SOYLEIC® soybean team is still working with licensees across the U.S. to lock in more SOYLEIC® soybean acres. This also goes for non-GM acres. If you have any leads on producers interested in non-GM or planting the SOYLEIC® soybean trait, let us know. Many QSSBs and licensees are working to fulfill the demand for both, non-GM and SOYLEIC soybean acres.

This monthly feature from SSGA’s Agronomy Action Team highlights growing conditions for Identity Preserved crops from different regions around the country. Thanks to the states/regions that contributed this month. If you would like to contribute, please get in touch with David Kee or Shane Frederick. You can also follow David Kee on Twitter for some of the latest, most-interesting information on agronomy and research that affect IP and other farmers.

Competitive Shipping: SSGA backs Senate’s ocean shipping reform legislation

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By Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

The much-awaited U.S. Senate version of the ocean shipping reform legislation was formally introduced on Thursday by Sen. Amy Klobuchar (D-Minn.) and Sen. John Thune (R-S.D.).

The legislation earned the initial support of more than 75 business trade organizations at its introduction, including the Specialty Soya and Grains Alliance, as part of a wide cross-section of additional national and state agriculture organizations. Supporting groups also included the Agriculture Transportation Coalition, Minnesota Soybean Growers Association, Minnesota Corn Growers Association and South Dakota Soybean Association, along with a number of notable companies involved in container export shipping such as SSGA member SB&B Foods and Double River Forwarding.

The bill also had 12 bipartisan co-sponsors, including Sens. Tammy Baldwin (D-Wis.), John Hoeven (R-N.D.), Debbie Stabenow (D-Mich.), Roger Marshall (R-Kan.), Gary Peters (D-Mich.), Jerry Moran (R-Kan.), Richard Blumenthal (D-Conn.), Todd Young (R-Ind.), Mark Kelly (D-Ariz.), Marsha Blackburn (R-Tenn.), Cory Booker (D-N.J.) and Joni Ernst (R-Iowa).

The Senate legislation would:

  • Require ocean carriers to certify that late fees —known in maritime parlance as detention and demurrage charges — comply with federal regulations or face penalties.
  • Shift burden of proof regarding the reasonableness of detention or demurrage charges from the invoiced party to the ocean carrier.
  • Prohibit ocean carriers from unreasonably declining shipping opportunities for U.S. exports, as determined by the Federal Maritime Commission (FMC) in new required rulemaking.
  • Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and 20-foot equivalent units (loaded/empty) per vessel that makes port in the United States.
  • Authorize the FMC to self-initiate investigations of ocean common carriers’ business practices and apply enforcement measures, as appropriate.
  • Establish new authority for the FMC to register shipping vessel-sharing alliance exchanges.

It’s been noted that the Senate version of the bill differs slightly from the House version of the legislation, introduced by Rep. John Garamendi (D-Calif.) and Rep. Dusty Johnson (R-S.D.), which passed the with overwhelming support in December.

Both bills require that ocean carriers certify that any detention and demurrage fees they charge shippers, forwarders or truckers comply with federal guidelines on such penalties before automatically billing them and forcing shippers to file information proving the bills are incorrect.

Stronger guarantees of carrier handling of U.S. exports is also the aim of both bills. However, while the House bill would prohibit carriers from rejecting export bookings if the cargo can be “loaded safely and timely” on vessels destined to the destination, the Senate bill would leave it up to the FMC to develop rules and procedures to strengthen ocean carriers’ common carrier responsibilities to handle exports.

“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years. Meanwhile, ocean carriers have reported record profits,” Klobuchar said in a news release. “This legislation will help level the playing field for American exporters so they can get their goods to market in a timely manner for a fair price. As we work to improve our supply chains, I’ll keep fighting to establish trade opportunities for the U.S.”

In a statement, Thune said: “South Dakota producers expect that ocean carriers operate under fair and transparent rules. Unfortunately, that is not always the case and producers across America are paying the price.”

For more details, read coverage in Freightwaves, Journal of Commerce and AgriPulse.

 

Klobuchar, Booker also address carrier alliances

Separately Klobuchar, a senior member of the Senate Commerce Committee and chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, introduced legislation together with Booker aimed to address shipper concerns over ocean carrier alliance practices.

The ocean container carrier industry has gone through much consolidation over that past eight years, and today the 10 largest global steamship lines operate in just three container vessel-sharing alliances.

Klobuchar’s statement noted: “While alliances are intended to benefit the global shipping industry, only three alliances dominate the global shipping industry, creating imbalance of market power.”

The “Ocean Shipping Competition Reform Act” (S. 3586), according to the Klobuchar news release, would allow for third parties to participate in legal cases brought by the FMC against ocean carriers for anticompetitive harm and let successful third parties in those legal cases receive money damages, with additional financial penalties designed to deter anticompetitive conduct.

 

More transportation updates

Ocean carriers post ‘greatest quarter ever’: Preliminary results of the financial performance of the world’s ocean container carriers at the end of last year, according to transportation media outlet Freighwaves, shows the carriers are recording “history-making profits … trouncing already stratospheric expectations.” More details, including public earnings reports for several major container lines are available here.

USDA announces subsidy for California ‘pop-up’ export container staging yard: American Journal of Transportation and Freightwaves have details about a program USDA announced last week on a partnership the agency started with the Port of Oakland to support agriculture exports from a new 25-acre container staging facility. Key congressional lawmakers say more is needed.

Bulk shipping rates slide: While container ocean rates continue at high levels, bulk shipping rates reportedly are declining due largely to a slowdown in China’s steel production. That affects rates for shipping bulk agriculture commodities, according to American Journal of Transportation.  

West Coast port congestion numbers reported: According to a Northwest Seaport Alliance (NWSA) operations report, as of February 3, the number of ships waiting to berth at the Seattle and Tacoma terminals were down to just five vessels. Prince Rupert also had five ships waiting; Vancouver, B.C., had 14 waiting; and Oakland had 13 waiting. Los Angeles and Long Beach, the two largest U.S. container ports had 89 ships waiting, using a new container vessel queuing process for the California ports.

Check out a video on NWSA’s new T5 terminal: You can get a look at NWSA’s new big-ship-ready modernized T5 terminal, with the largest cranes in the world, in a video posted on YouTube. MSC is the first ocean carrier with regular scheduled service at the now open terminal.

House passes bipartisan ‘Ocean Shipping Reform Act’

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The Specialty Soya and Grains Alliance is pleased that the “Ocean Shipping Reform Act” (H.R.4996) overwhelmingly passed the U.S. House of Representatives on Thursday. The legislation, co-sponsored by Rep. John Garamendi (D-CA) and Dusty Johnson (R-SD), passed by a bipartisan vote of 364-60

The bill, which has received strong endorsement from SSGA and many other national organizations whose members have been affected by global supply chain disruption, would make the Federal Maritime Commission (FMC) a more effective federal regulator and ensure a more competitive global ocean shipping industry.

The legislation now heads to the United States Senate for consideration.

“We are pleased to see the House of Representatives take a strong bipartisan step forward to protect the interests of U.S. agricultural exporters by making needed reforms to strengthen the U.S. Shipping Act,” said Darwin Rader, SSGA board director and competitive shipping action team chair. “We hope the Senate will follow through with strong complementary legislation and that Congress will provide the Federal Maritime Commission with adequate resources to carry out its vital regulatory oversight mission.

“We would further welcome the opportunity to engage with the ocean carriers on ways to assure that inland U.S. agriculture shippers have timely access to containers and space on vessels so that we can reliably serve our overseas food manufacturing customers.”

The “Ocean Shipping Reform Act of 2021” would:

  • Establish reciprocal trade to promote U.S. exports as part of the Federal Maritime Commission’s (FMC) mission.
  • Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry.
  • Require ocean carriers or marine terminal operators to certify that any detention and demurrage charges comply with federal regulations or face penalties.
  • Shift burden of proof regarding the reasonableness of detention or demurrage charges from the invoiced party to the ocean carrier.
  • Prohibit ocean carriers from declining opportunities for U.S. exports unreasonably, as determined by the FMC in new required federal rulemaking.
  • Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and twenty-foot equivalent units (loaded/empty) per vessel that makes port in the United States.

Read more.

India: Partnership and progress toward market access

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China Experience Proves Local Producers Can Thrive as Imports Rise

By Philip Shull

A frequent refrain from frustrated exporters to tough destinations is: “This is a market of great potential. … And it always will be!”

Philip Shull

Philip Shull

With its huge population, rapidly growing economy, massive protein deficit, high tariffs and impossibly strict phytosanitary requirements, India has been in this category for decades. Despite promising trade missions, pressure from U.S. Department of Agriculture and U.S. Trade Representative over the years, and ready demand for our products among local processors, the India market has remained closed to U.S. Identity Preserved soy.

But this could soon change. Thanks to the initiative and strong advocacy of India’s Soy Food Promotion and Welfare Association (SFPWA, an industry group comprised of Indian processors of soy foods), access for U.S. IP soy to this long-closed market has never been closer.

Rising economic demand for protein among India’s 1.4 billion consumers has led to a sharp increase in domestic food prices. In response to this worrying development, the Indian government took the historic step in May 2021 of suspending its ban on pulse imports. This was a major development in a country where pulses are a foundational protein source and where self-sufficiency in pulses has long been a pillar of India’s agricultural policy.

Leveraging this unprecedented market opening, SFPWA wrote a letter to the Indian government requesting a 50,000-ton tariff rate quota (TRQ) for food quality soybeans. (Governments use TRQs to allow a certain amount of a given product to enter the country at a reduced tariff.)

Among other things, the letter explained that imports of IP soy would not harm Indian soy farmers because India has a large soy deficit and the characteristics and uniformity that U.S. specialty soy provides and that Indian processors need are unavailable in the domestic market.

In contrast to past market-opening efforts, SFPWA’s letter was met with an immediate and positive response from the Indian media. Dozens of articles appeared in support of the request. These media reports indicate that SFPWA’s ability to show how a TRQ could help Indian soybean farmers, as well as consumers, have led key ministries to meet with SFPWA leadership to discuss the issue. While much remains to be done and market access is not yet assured, progress toward this goal appears to be unprecedented.

SFPWA’s position is that opening the Indian market to soybeans will not harm Indian soybean farmers, and the experience of China supports this assertion. China’s decision in the 1990s to open its market to soybeans led to explosive growth in Chinese soy production, along with the historic growth in imports and consumption.

China is an especially apt case study for India because the countries share key characteristics.  Both are rapidly growing emerging markets with similar-sized populations, limited arable land and a history of strong import restrictions on soybeans. Just as importantly, both countries have experienced widespread protein deficits that harmed quality of life for their people. SFPWA believes that a TRQ for Identity Preserved soy will help improve diets throughout India. The Specialty Soya and Grains Alliance and the U.S. Soybean Export Council agree.

USDA data show that Chinese soy production rose, even as imports grew.  Today, China’s soy production (20 million tons) and imports (103 million tons) are both at or near-record levels. Meanwhile, Chinese soybean consumption rocketed from roughly 7 million tons in the 1970s to almost 120 million tons estimated in 2021 (v. 0 to 11.2 mmt for India). Consumption of soy for food rose from 6 million tons to 15 million tons during this period. This combined increase in soy consumption has contributed enormously to improvements in Chinese nutrition and quality of life during this period.

Charts linked here compare Indian and Chinese soybean imports (India, China), production (India, China), consumption (India, China), food-use consumption (India, China) and exports (India, China) over the past 50 years.

Per capita income in China and India was roughly equivalent at $500 in 2000. However, since China opened its market to soybeans, there has been a sharp divergence. While income in both countries grew strongly, India’s per capita income reached roughly $2,000 per capita in 2020, China’s grew to almost $10,000.

Bottom Line:  India remains a market of immense potential for U.S. specialty soya, and gaining access is a priority for SSGA. Given the similarities in the agricultural and consumer profiles between China and India, it is clear that Indian consumers and producers of poultry, dairy, aquaculture and soy-based foods could benefit greatly from greater access to imported soy without harm to India’s soybean farmers.

For years, SSGA and USSEC have worked intensively with the Indian soy food and feed industries to demonstrate how U.S. soy can improve diets and incomes throughout the country. We value this cooperation and applaud SFPWA for its historic initiative and unprecedented effort.

As President John Quincy Adams said, “Perseverance has a magical effect, before which difficulties disappear and obstacles vanish.”

Philip Shull is an SSGA Technical Adviser for South Asia. For 31 years he served in USDA’s Foreign Agricultural Service (FAS), opening markets for U.S. agricultural products.  He was stationed in China and greater China for 11 years (1987-92, 2006-2010, 2014-2016).

Technically Speaking: IP webinars target Southeast Asia where U.S. exports remain steady, strong

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By Hoa Huynh, SSGA technical adviser, Southeast Asia

Between February and August, the Specialty Soya and Grains alliance, in coordination with USDA Foreign Agricultural Service offices in Manila, Jakarta, Hanoi, Bangkok and Kuala Lumpur, successfully organized five virtual, educational seminars on U.S. Identity Preserved soybeans and specialty grains. Approximately 320 food manufacturers and importers representing the Philippines, Indonesia, Vietnam, Thailand and Malaysia participated in the seminars.

U.S. soybeans and soya products exported to Southeast Asia have continued strong growth in recent years, according to USDA data. During the period of October 2020 to May 2021, U.S. soybeans and soymeal exports to the region increased by $548.4 million or 37.9% and $241.5 million or 33.3%, respectively. In addition, U.S. corn exports also experienced healthy growth during the same period, from $53.2 million to $179.2 million or 236.8%. In comparison to the October-May 2020/2021 period, U.S. agriculture and related products to the region increased by 10.25% to $10.7 billion.

Indonesia is the most populous Southeast Asian country by far and is the largest market in the region for U.S. soybeans and soya products, which totaled $1.03 billion, an increase of 90% in the first seven month of MY21 (October-September) compared to the same period of MY20. The Philippines and Vietnam, however, have been the fastest-growing markets for the United States in recent years. The U.S. is the largest food supplier to the Philippines, providing about one-quarter of total food imports. Meanwhile, U.S. exports to Vietnam have increased tenfold in the last decade.

Southeast Asia has had the fastest growth in U.S. agricultural sales of any region in recent years. Strong economic growth and increasing demand for high-value products have been major drivers of this increase, and these trends are expected to remain relatively steady to make Southeast Asia an attractive destination for U.S. exports in the future, particularly with continuing efforts to educate about U.S. IP soybeans and specialty grains to Southeast Asian food manufacturers.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s IP technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh) and Europe (Eugene Philhower). Please reach out to them via email. They want to hear from SSGA members!

Competitive Shipping: Global container shipping comes under regulators’ watchful eye

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The big news this week on the container shipping front is the introduction of the bipartisan Ocean Shipping Reform Act of 2021, which aims to beef up the authority and oversight actions of the U.S. Federal Maritime Commission (FMC) with the intent to fix persistent problems in global container shipping that are harming U.S. exporters and importers.

Some steps are already underway:

FMC launches investigation into pricing practices of eight ocean carriers

While rates for export shipments from SSGA exporters have gone up 30-50% and more over recent months, the rates ocean carriers are charging U.S. importers of high-value products from Asia have risen to record levels. Moreover, importers complain that, while container bookings are often not available for the head haul to the U.S., the carriers are offering various surcharges and premium rates for more guaranteed service that are far above skyrocketing spot rates.

In response to complaints, the FMC last week announced it is launching an expedited investigation into the pricing practices of eight global container carriers: CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line, and Zim. Each carrier was identified as having recently implemented or announced congestion or related surcharges. FMC will examine the timing and legal sufficiency of the charges in light of rate filing requirements. More detailed coverage is available here.

Major importer files complaint to FMC alleging collusion by ocean carriers

Another new development worth watching is an action taken last week by a major U.S. home goods importing company from Pennsylvania, MCS Industries. MCS filled a formal complaint to FMC alleging that Cosco Shipping and Mediterranean Shipping Company (MSC) were colluding in ways that violate service contracts for regular service to capitalize on current record Trans-Pacific container spot rates.

MCS accused the two ocean carriers, which actually operate in two different alliances, of working in “parallel and seemingly coordinated fashion” to not honor their service contracts at rates and volumes agreed upon, only to sell the space “to the highest bidder.” Go here for more details reported by the Journal of Commerce (JOC).

Carrier MSC, in response, said it was “shocked” by the allegations and denied the charges made in the complaint, which was published by the FMC on August 3. Go here for more details of MSC’s response.

Formal complaints to the FMC are rare to nonexistent, because it’s been widely reported that shippers fear retaliation in some form. The World Shipping Council representing ocean carriers and MSC, in this case, deny that retaliation by carriers occurs. The complaint and FMC findings bear watching in terms of acceptance by international regulatory bodies of consolidation among the largest ocean carriers, who now see the 10 largest global carriers operating in just three major vessel sharing alliances.

South Korea backslide?

Meanwhile in South Korea, some lawmakers want to take steps to turn back regulations there barring collusion. The legislators reportedly want to amend the nation’s Monopoly Regulation and Fair Trade Act to exempt the shipping industry from jurisdiction by the Korea Fair Trade Commission (KFTC) as part of the effort to turn back some heavy fines leveled by the agency. KFTC imposed fines totaling $613 million on 23 ocean shipping lines. A dozen South Korean companies were fined, including ocean container lines HMM and SM Line, plus 11 foreign carriers. Go here for more detailed coverage.

Steamship line profits keep on rolling ahead

While service, reliability and congestion issues continue to plague the container shipping industry, ocean carriers continue to enjoy record profits. According to news reports out last week, Maersk, the largest ocean carrier, boosted its profit forecast for the year of 2021 by a whopping $5 billion. Go here for details.

Ocean Network Express (ONE), the big consolidated ocean container line made up of three previously independent Japanese major carriers, announced, despite congestion in the system, it cleared in excess of $2.5 billion in its first quarter fiscal year that ended June 30. Go here for details.

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

US ag strongly endorses Ocean Shipping Reform Act

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The Specialty Soya and Grains Alliance was one of more than 100 agriculture- and forest-product companies and associations that signed onto a letter of support endorsing the Ocean Shipping Reform Act of 2021, sponsored by House members John Garamendi (D-California) and Dusty Johnson (R-South Dakota). In a press release issued on Tuesday, Aug. 10, the Agriculture Transportation Coalition (AgTC) stressed that OSRA21 “provisions addressing unreasonable ocean carrier practices should be expeditiously enacted so that U.S. agriculture will remain competitive in global markets.”

AgTC’s press release included statements from representatives of 15 ag associations, including SSGA. Darwin Rader, SSGA secretary/treasurer and competitive shipping action team chair, said:

“We are hopeful this legislation will result in changes in ocean carrier practices to allow U.S. exporters of soybeans and grain to ship their contracted goods to overseas customers in a timely manner. Inland ag exporters are very concerned with problems of export denials — from unavailable bookings to cancelled bookings to cargo rolled at the terminals — while empty containers sail right on by.”

Rader is the export manager for Zeeland Farm Services, a major soybean and grain shipper.

Excerpts from AgTC’s press release:

All levels of the U.S. government are focused on the current export and import transportation crisis. This year, over 160 Members of Congress have written urging prompt federal attention and intervention. The House Committee on Transportation and Infrastructure held a hearing on the ongoing crisis; President Biden issued Executive Order 14036 directing the FMC and the Department of Justice to act; Department of Transportation Secretary Buttigieg personally conducted a high-level port roundtable. An appropriations provision from Representative Kim Schrier’s (D-Washington) will enhance the FMC’s support of U.S. exporters/importers. The FMC is continuing its investigations and audits of carriers.

The letter’s signatories …  believe that OSRA21 is urgently needed to convert these expressions of concern into tangible change in ocean carrier practices. These include adherence to the FMC’s Interpretive Rule on Demurrage and Detention, which has gone unheeded by ocean carriers. This bill also includes an alternative to the FMC’s burdensome complaint process, with an innovative means to gain compliance with that rule by imposing upon carriers the obligation to self-police or face meaningful penalties. In addition, the bill obligates ocean carriers to carry export cargo, subject to safety and other reasonable conditions. It addresses current carrier practices which are limiting efficient use of containers, chassis and other equipment.

“Currently, according to the AgTC survey, on average, 22% of U.S. agriculture foreign sales cannot be completed,” said Peter Friedmann, AgTC executive director. “Ocean carriers are declining to carry our cargo in favor of returning so many containers back to Asia empty, while unprecedented freight rate hikes, penalty charges and unpredictable service are denying affordable, dependable U.S. agriculture export access to our best foreign markets.

“There is nothing we produce in agriculture and forest products in this country, that cannot be sourced in some other country. If we cannot deliver, affordably and dependably, our foreign customers will find — and are already finding — alternatives to U.S. exports.” 

SSGA offers comments on FGIS inspection exemption

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The Specialty Soya and Grains Alliance recently offered comments to the U.S. Department of Agriculture Agricultural Marketing Service’s Federal Grain Inspection Service (FGIS), endorsing the reauthorization of an exemption for high-quality grains from weighing and inspection.

SSGA, which represents the U.S. identity preserved (IP) industry, emphasized in its comments that IP field crops are traded above mandated standards – they’re truly “above the grade” – and IP companies take great care to adhere to quality assurance protocols and maintain records.

“Reauthorizing the exemption and its reporting requirements is an important step to maintain and grow this grain segment,” SSGA commented. FGIS is in the process of requesting a three-year extension and revision of a currently approved information collection for “Export Inspection and Weighing Waiver for High Quality Specialty Grain Transported in Containers” and sought and accepted comments through July 26.

SSGA continues to remind its members and others in the IP industry to make sure they are holding up their end of the bargain by registering with FGIS and keeping thorough and accurate records. SSGA is assisting its members in registering, when necessary.

“U.S. exporters need to remember to register properly with the Federal Grain Inspection Service and maintain records as indicated by this announcement,” said Eric Wenberg, SSGA executive director. “Most identity preserved shipments move above the grain grades, and we need to maintain our industry reputation for quality. Great record keeping is essential to the high-quality grains programs our buyers rely on. We need to keep the high-quality grain segment with this exemption.”

SSGA continues to work with FGIS and the USDA’s Animal and Plant Health Inspection Service (APHIS) to ease certification burdens for IP exporters.

To register with FGIS as a recognized exporter go here. For registered companies, instructions for exemptions can be found in FGIS Directive 9020.1, Section 4. Exporters will need to email FGISQACD@usda.gov with all necessary information required for an exemption.

For questions or more information, please write to SSGA at info@soyagrainsalliance.org.

Mercaris Murmurings: Organic soybean markets remain unsettled

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U.S. organic soybean markets remained unsettled over June, following an unsettled outlook for production, imports and prices. Across the U.S. Corn Belt, the outlook for organic soybeans has generally improved as much-needed precipitation helped ease drought conditions across Iowa, Michigan and Wisconsin. The exception to this trend appears to be Minnesota, with the U.S. Drought Monitor reporting 100% of the state experiencing drought conditions the week of July 20 and 4% of the state experiencing extreme- to exceptional-drought conditions. Overall, Mercaris estimates that 61% of organic soybean acres across the Corn Belt were rated in good to excellent condition as of July 18, down slightly from 69% last year.

While the U.S. crop outlook has improved slightly, the pace of import has also picked up speed. In June, U.S. organic soybean imports saw their largest month since the start of the MY, pushing above levels of a year ago by nearly 20%. The month saw imports from Argentina reach their highest level since June 2020, while imports from the Black Sea region reached their highest levels since September 2020.

U.S. organic soybean meal maritime imports also remained higher year over year for the 10th month in a row, up 7% year over year. That said, June did see the first substantial decline in organic soybean meal from India, which declined to its lowest level since October 2018, down 26% y/y. Ultimately, organic soybean meal imports for the month were supported by shipments from Turkey, with the United States importing nearly 12,000 MT from the country over the month.

Despite indications that U.S. organic soybean supplies might improve over the remainder of the marketing year, prices continue to reflect a tightening U.S. supply situation, with organic feed-grade soybeans delivered to U.S. elevators averaging $30.41/bu during June, up $3.37/bu from May and gaining $11/bu over year-ago prices.

Mercaris, the nation’s leading market data service and online trading platform for organic and non-GMO agricultural commodities, is an SSGA member and a monthly contributor to the SSGA E-newsletter.

Senators voice concerns about shipping crisis

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In show of bipartisan support for U.S. agriculture, 24 U.S. senators on Tuesday pushed for a swift resolution to the container shipping crisis, signing on to a letter to the Federal Maritime Commission, expressing support for the FMC’s investigation into reports of unreasonable practices by ocean carriers that are posing challenges for ag exporters.

“The need is urgent,” the letter said.

Led by Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) – both of whom are members of the Senate agriculture and commerce committees – the letter urges the FMC to take appropriate action under the Shipping Act to halt any potential violations of the Act by the carriers.

“If the reports are true, such practices would be unreasonable and would hurt millions of producers across the nation by preventing them from competing in overseas markets,” the senators wrote.

With ports experiencing unprecedented congestion, U.S. agricultural exporters’ access to international markets is being jeopardized by the dysfunction and rising costs of ocean transportation services, which includes unreasonable and unjust practices such as the rejection of U.S. agricultural cargo by ocean carriers who are shipping empty containers back overseas to keep up with the high demand for U.S.-bound imported goods.

In October, SSGA was one of the first national agricultural associations to shine a light on the disruption of the food supply chain and other critical problems facing containerized ag exports after members began to be informed that some ocean carriers were suspending containerized and other overseas ag shipments. 

Read the senators’ letter here.

Earlier this month, SSGA representatives had the opportunity to give testimony to the FMC, along with other national ag organizations, and last week, signed on to a letter to President Biden, urging intervention from his administration.