Regulations update, other actions would address supply chain disruptions

Supply chain disruptions are currently a highly frustrating reality for industries across the globe. In fact, an October 2021 quarterly report from CoBank’s Knowledge Exchange relays that supply chains are arguably in the most dire condition since the beginning of the pandemic. Persistent supply chain disruptions and labor shortages are adding significant costs to business operations (including dairy operations), and consumers will feel these effects through higher prices for months to come.

First major update

On Aug. 10, Congressmen John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) took a step to address some of the issues behind those disruptions with the introduction of the Ocean Shipping Reform Act of 2021. The bipartisan legislation is the first major update of federal regulations for the global ocean shipping industry since 1998, according to a press release issued by the congressmen.

The legislation would support American exports by establishing reciprocal trade opportunities to help reduce the United States’ longstanding trade imbalance with China and other countries.

Dairy industry support for act — and beyond

For its part, the International Dairy Foods Association (IDFA) said it is supporting passage of the act. The association also announced on Nov. 3 the formation of a Supply Chain Task Force to develop policy recommendations to address other severe supply chain disruptions affecting the U.S. dairy industry. Formation of the task force comes as the food and agriculture sector deals with several mounting challenges, IDFA said, including labor shortages, steadily increasing costs for inputs such as ingredients and packaging, and major challenges moving products through sea and land ports.

“The IDFA Supply Chain Task Force will work across our industry with partners from other sectors of the economy, the federal government, think tanks, and others to bring actionable solutions to the table,” said Michael Dykes, D.V.M., IDFA’s president and CEO.

Supply chain challenges are affecting the dairy industry’s ability to remain profitable, support good-paying jobs, and provide healthy, nutritious food to families around the world, the association noted.

Many of those challenges were discussed on Nov. 3 in a hearing titled, “The Immediate Challenges to our Nation’s Food Supply Chain.” The hearing was hosted by the House Agriculture Committee, IDFA noted and featured testimony from Michael Durkin, president, and CEO of cheesemaker giant Leprino Foods Co., as well as a director on the IDFA Executive Council.

Krysta Harden, president, and CEO of the U.S. Dairy Export Council weighed in on the hearing and its importance.

“The strain of shipping challenges is taking a heavy toll on dairy exporters, which is why it was so important that the House Agriculture Committee heard today from companies such as Leprino Foods that are doing everything possible to hang onto foreign customers yet are still bearing the brunt of this problem,” she said. “Dairy exporters are working hard to get American-made product to foreign customers in a reliable and affordable way, but the present situation can’t be sustained long-term. We need Congress and the administration to move swiftly to improve the efficiency and fairness of supply chains.”

Some supply chain assistance appears to be on the way with the recent congressional passage of the bipartisan Infrastructure Investment and Jobs Act, which IDFA applauded. According to a White House statement, the legislation includes approximately $550 billion in new federal investment in America’s roads and bridges, water infrastructure, resilience, internet, and more.

“The bill promises to deliver federal funding to improve roads, bridges, ports, railways, and other parts of our transportation networks that have fallen into disrepair and hampered our economy’s growth,” Dykes said. “The act invests in long-term improvements to capacity and technology at our seaports and goes a long way toward strengthening America’s competitiveness in global trade.”

Good news indeed. Now — for the sake of the U.S. dairy industry and trade globally — let’s hope that Congress also passes the Ocean Shipping Reform Act and that IDFA’s Supply Chain Task Force makes progress with the remaining items on its legislative wish list.