In the early stages of the COVID-19 pandemic, the curtain was pulled back on the fragility of the nation’s food supply chain as widespread closures of schools, bars and restaurants put a hard stop on key customers for the nation’s farm goods. Across the country, producers were suddenly saddled with crops and animals they couldn’t sell. Reports of produce and animals being destroyed shocked the public.
One year later, the farm economy is facing an issue of another kind. As demand for farm products at home and around the world has lurched directly from neutral to high gear, transportation issues are looming large in many farmers’ and ranchers’ ability to get supplies in and get animals and produce out.
“We’re a three-legged stool, when it comes to transportation — surface transportation, waterway and rail. They all kind of balance each other. As we get challenges in any one of those, or if any one of those legs on that three-legged stool comes apart, we’re on our ass in a lot of ways,” said Andrew Walmsley, director of Congressional Relations with the American Farm Bureau Federation in Washington, D.C. “We’re a really productive country, and 96% of the world’s mouths are outside of our borders. So, having the ability to get to those customers is key.”
Walmsley noted a perfect storm is currently underway, from a lack of shipping containers to send products to overseas markets, particularly China, to more regional infrastructural challenges. Among these are the high-profile shutdown of the Interstate 40 Hernando de Soto Bridge linking Arkansas to Tennessee at Memphis and the cyberhack that shut down the Colonial Pipeline, boosting already spiking fuel prices.
“I think from a pure ag industry perspective, we have a few more flexibilities, maybe, than some of the other sections of the trucking industry,” Walmsley said. “But overall, we face similar challenges. If we have a shortage of fuel tank drivers this summer, that’s going to have a huge impact if we can’t get diesel to put in our tractors, right? We’re definitely worried and keeping an eye out for those types of challenges.”
The issue has sounded alarms at the highest levels of government, prompting meetings and proclamations but thus far little permanent action. Last November, the Federal Motor Carrier Safety Administration (FMSCA) clarified some definitions regarding what agricultural goods could be included under existing guidelines that waive federal hours-of-service regulations under certain circumstances. And in April, the U.S. Department of Agriculture and U.S. Department of Transportation jointly convened a meeting with stakeholders in the ag and transportation sectors to, per a press release, “discuss current issues surrounding shipping U.S. agricultural exports, as well as logistical and technical concerns.”
However, as trade groups are quick to point out, most substantive action by the feds has thus far been limited to temporary exemptions that, while helpful, still leave a great deal of uncertainty to what happens when such fixes expire.
“As of March 2020, we were given hours of exemption for livestock haulers, so that if we rolled up to a plant — and we did see some plant slowdowns and minor closures, all COVID related — we have the ability to pivot. Those cattle are on the trailer and have to get off somewhere safely to get processed,” said Allison Rivera, executive director of government affairs for the National Cattlemen’s Beef Association (NCBA).
“We were grateful to DOT to receive that exemption, because it allowed us to get grocery store shelves stocked,” she said. NCBA recently called on FMCSA for additional regulatory relief for transporters of live animals and fresh meat products in the wake of a cyberattack on global meat supplier JBS SA.
For its part, the NCBA is backing legislation that would make such temporary adjustments permanent. The most prominent of these measures is the bipartisan Haulers of Agriculture and Livestock Safety Act (HAULS Act), spearheaded by U.S. Sen. Deb Fischer (R-Neb.), with a House companion bill introduced by Reps. John Rose (R-Tenn.) and Darren Soto (D-Fla.).
“The HAULS Act takes our current 150 air-mile ag commodity exemption and adds another 150 air miles to the back end of hauls. That provides us flexibility during the unloading time at the plants or feed yard. That bill would be extremely helpful to the livestock hauling industry as well as the rest of agriculture,” Rivera said.
“We also continue to push back through the appropriations process on electronic logging devices (ELD) for livestock haulers,” she continued. “In our industry, we need flexibility because with a live haul, sometimes we can’t stop at a rest stop or offload cattle when we’ve hit the end of our 11 hours of drive time for the day.”
These proposals, among others, all trace back to some degree or another to the elephant in the room: a lack of available personnel. Driver shortages are so pronounced across all trucking sectors that trade groups are looking for ways to maximize what trucking companies can do with the employees they have, such as proposals to increase allowable payload weight.
“We absolutely feel like there is a significant driver shortage, and it is a grave concern,” Rivera said. “We are in agreement with many in the ag-hauling space that the driver shortage is only getting worse. Livestock haulers are less than 1% of the drivers on the road and have been deemed essential, so we haven’t seen a driver issue in the live-haul portion, but when it comes to agriculture, there’s a lot of moving pieces.
“The things I’m hearing is the driver shortage is affecting chemical supplies and fertilizer and feed and fuel, and all those pieces are important for the care of these animals as well as moving them,” she continued. “So, while we may not be seeing an issue at the moment, it is a concern.”
The driver shortage is a crisis without borders. Jim Rempel is CEO of Manitoba-based Steve’s Livestock Transport, one of the largest livestock hauling companies in North America. The 35-year-old outfit mostly hauls hogs throughout Canada, with heavy lanes into Minnesota, the Dakotas and Iowa, with breeding stock and genetic movements as far south as Texas and Florida.
“Today, we have 155 drivers, and we certainly would look at adding another 25. We would easily get into the 20% to 25% growth that we would see fairly quickly,” Rempel said. “We can buy trucks, we can buy trailers, but we can’t afford to have them sitting up against the fence.”
Rempel said that, despite this shortage, he doesn’t anticipate the industry not being able to fill shelves for the foreseeable future. When it comes to the potential sticker shock of those items, that’s another story.
“The over-the-road goods movements have continued to grow, and we’ve seen it through the COVID pandemic in the last year. I think it’s fairly well documented that that number has continued to grow,” he said. “It’s a critical piece of North American infrastructure, over-the-road trucking. We, the trucking industry, have a responsibility to make sure we’re working with drivers, so that they want to continue to stay in our industry, to make it attractive enough.
“But it is challenging, in a competitive environment, when your costs keep rising. And with the shortages over the last year or so, where we’re starting to see some delays in parts and equipment and costs rising, there’s certainly a challenge,” he explained. “We see the costs of operating going up; we see the cost of bringing drivers in is starting to rise. Eventually, that has to be passed on somewhere. And that, essentially, boils down to the cost of goods increasing.”
Rempel said as a cross-border carrier, he has the ability to compare and contrast the U.S. and Canada from a regulatory and labor perspective. While many of the differences are negligible, one major difference directly impacts driver recruitment in the U.S. versus in Canada.
“In Canada, you can go for your commercial license at the age of 18,” he said. “That has proven itself to be very favorable, safe — and there isn’t a challenge there. I think there’s certainly enough history there, and that should be across the board.”
As for other regulatory issues, Andrew Walmsley noted the jury is still out on the Biden administration and the impact its agenda could have on the industry — but, based on rhetoric thus far, there’s cause for concern.
“I think there’s a concern that this administration doesn’t seem as focused on trade as the previous administration,” Walmsley said. “I think that that’s come up more recently because it’s such a key component to the success of American agriculture. Overall, we’re in the middle of the five-year Farm Bill signed into law in 2018, and we’re starting to gear up for the 2023 Farm Bill. Let’s make sure we don’t do anything to undermine those important risk management tools.
“There’s going to be a lot of focus around conservation practices and climate change, right, and how that is going to impact what farmers are deciding to do on the farm,” he continued. “We think that’s a positive thing, as long as it’s flexible and voluntary and farmers can choose what makes the most sense for them.”