[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                      THE IMMEDIATE CHALLENGES TO OUR 
                         NATION'S FOOD SUPPLY CHAIN

=======================================================================

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 3, 2021

                               __________

                           Serial No. 117-20

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-137 PDF                 WASHINGTON : 2022                     
          
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                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                  (ii)
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Axne, Hon. Cynthia a Representative in Congress from Iowa, 
  submitted op-ed................................................   137
Balderson, Hon. Troy, a Representative in Congress from Ohio, 
  submitted video................................................   150
Fischbach, Hon. Michelle, a Representative in Congress from 
  Minnesota; submitted comment letter authored by Jack Roney, 
  Director of 
  Economics and Policy Analysis, American Sugar Alliance.........   151
Johnson, Hon. Dusty, a Representative in Congress from South 
  Dakota, submitted letter.......................................   144
Panetta, Hon. Jimmy a Representative in Congress from California; 
  submitted letter on behalf of British Columbia Produce 
  Marketing Association, et al...................................   138
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     4
    Submitted comment letter authored by Agricultural 
      Transportation Working Group...............................   121
    Submitted letters on behalf of:
        Ott, Matthew, President and Chief Executive Officer, 
          Global Cold Chain Alliance.............................   101
        Owens, Graham, Co-Chair, Government Affairs Committee, 
          National Industrial Hemp Council; President, Delta 
          Agriculture............................................   104
        Scott, Kevin, President, American Soybean Association....   118
        Stuckey, Hon. Stephanie, Chief Executive Officer, 
          Stuckey's Corporation..................................   120
    Submitted statements on behalf of:
        Potts, Julie Anna, President and Chief Executive Officer, 
          North American Meat Institute..........................   127
        National Cotton Council..................................   131
        The Fertilizer Institute.................................   134
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     4
    Submitted article............................................   141

                               Witnesses

Schwalls, Jon T., Executive Officer, Southern Valley Fruit and 
  Vegetable, Inc., Norman Park, GA; on behalf of Georgia Fruit 
  and Vegetable Growers Association..............................     8
    Prepared statement...........................................     9
    Supplementary material.......................................   170
    Submitted questions..........................................   198
Cinco, Ed, Director of Purchasing, Schwebel's Baking Co., 
  Youngstown, OH; on behalf of American Bakers Association.......    11
    Prepared statement...........................................    13
    Supplementary material.......................................   170
Ferrara, Greg, President and Chief Executive Officer, National 
  Grocers Association, Washington, D.C...........................    16
    Prepared statement...........................................    18
    Supplementary material.......................................   185
    Submitted questions..........................................   199
Durkin, Mike, President and Chief Executive Officer, Leprino 
  Foods Company, Denver, CO; on behalf of International Dairy 
  Foods Association..............................................    24
    Prepared statement...........................................    26
    Supplementary material.......................................   185
Samson, Jon, Vice President of Conferences, Executive Director, 
  Agriculture & Food Transporters Conference, American Trucking 
  Associations, Arlington, VA....................................    32
    Prepared statement...........................................    33
    Supplementary material.......................................   189
Wells, Rod, Chief Supply Chain Officer, GROWMARK, Inc.; Chairman 
  of the Board, Agricultural Retailers Association, Bloomington, 
  IL.............................................................    39
    Prepared statement...........................................    41
    Supplementary material.......................................   190

 
       THE IMMEDIATE CHALLENGES TO OUR NATION'S FOOD SUPPLY CHAIN

                              ----------                              


                      WEDNESDAY, NOVEMBER 3, 2021

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Adams, Spanberger, Hayes, Delgado, Rush, 
Pingree, Kuster, Bustos, O'Halleran, Carbajal, Khanna, Lawson, 
Craig, Harder, Axne, Schrier, Bishop, Thompson, Austin Scott of 
Georgia, DesJarlais, LaMalfa, Davis, Allen, Kelly, Bacon, 
Johnson, Baird, Jacobs, Balderson, Cloud, Mann, Feenstra, 
Miller, Moore, Cammack, Fischbach, and Letlow.
    Staff present: Prescott Martin III, Lesley Weber McNitt, 
Kelcy Schaunaman, Ashley Smith, Luke Theriot, Parish Braden, 
Patricia Straughn, Jennifer Tiller, Erin Wilson, and Dana 
Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee will come to order. I want to 
welcome everyone, and thank you for joining us with this very 
critical, important, and urgent hearing. It is very important 
that we take stock of where we are at this point, in terms of 
making sure that we keep our food supply chain safe and secure, 
and moving our goods, our food products, our equipment that our 
farmers need to really make sure that we are responding to this 
very critical need. We have a distinguished panel, and I am so 
delighted with the great work that my staff has done in 
assembling this hearing. This is very important.
    After brief opening remarks, Members will receive testimony 
from our witnesses today, and then our hearing will be open to 
questions. Members will be recognized in order of seniority, 
alternating between Majority and Minority Members, and in order 
of arrival for those Members who have joined after the hearing 
was called to order. And, as always, when you are recognized, 
please make sure you are muted when you are not speaking, and 
when you are speaking, you can unmute. And I want to start with 
my own opening statement here.
    I really, really wanted to hurry up and have this hearing 
so that we will be able to relay to the American community that 
our food supply at this point is secure. We do not have, at 
this point, a shortage of food. And the purpose of this hearing 
is to make sure, as the challenges continue to unveil with the 
pandemic, which is causing so much of this problem--we hope it 
can go away quickly. We hoped that a year ago, but it is still 
here. We don't know how much longer it will be here. But we 
cannot wait to be able to look today at the immediate 
challenges that face us in order to keep our food supply 
plentiful and secure.
    Today's hearing is a very important, with widespread look 
at our supply chain issues. We want to look at the logistics 
involved with ensuring that our grocery store shelves, our 
convenience store shelves, all of the retail elements where our 
people get their food products, are well stocked, and we want 
to make sure that we in Congress are doing what we need to do 
to make sure that that stays constant.
    To start, our supply chain challenges are yet--our food 
is--supply is safe so far, but we do have some challenges that 
are widespread and unprecedented, and they are not just limited 
to food and agriculture. They are global. We are a global 
force. We have the world's greatest agriculture system, and it 
spans the world. So, whatever happens in whichever part of the 
world that is not good, it impacts us. It impacts our farmers. 
It impacts our grocery stores, all of that. And we want to make 
sure that we in Congress, and this Committee, get to the bottom 
of what some of the serious immediate challenges are. And I 
want to commend several of our House Agriculture Subcommittees 
who have held hearings on this, including the beef supply 
chain, small and local supply chains, and we also have had a 
meeting with the Federal Maritime Commission to discuss 
shipping issues and possible remedies.
    I do not want to understate that these complex disruptions 
are causing economic hardships, delays, limited product 
choices, increased costs of production, and most notably, for 
much of our American people, the prices have zoomed. So, we are 
caught in the middle here, and we are committed to doing our 
part in Congress, and we in the House Agriculture Committee 
will shine a light on these issues and move forward.
    I also want to bring attention to--while we are sailing 
fairly smoothly in terms of no disruptions in our supply chain, 
we do have a serious immediate challenge, and it is a challenge 
that we have to address, and it is this. We need, right now, 
15,000 more commercial truck drivers. If there is an Achilles' 
heel in our challenge, it rests with these huge vacancies in 
our truck drivers, commercial truck drivers. Let me tell you 
why. Right now, according to our food service distribution 
industry--they are the ones that brought this to my attention, 
and I need to share it with this Committee, because we are 
going to have to do something about this. Right now, we are 
15,000 commercial drivers short, and we have to move 
forthrightly to respond to that.
    But more than that--and here is the real element of this 
Achilles' heel. According to not just the Food Service 
Distribution Association, but our Transportation Department and 
others, here is the problem: 90 percent of our commercial truck 
drivers don't last 1 year, and so we have before us a major 
recruitment problem, and a retention problem. And I have moved 
on this in our Committee, and we are going to call upon, and 
work with, as our Agriculture Committee, and work with our 
Education and Labor Committee, and work with our Transportation 
and Infrastructure Committee, and I've asked my staff to begin 
to reach out.
    I believe strongly, ladies and gentlemen, that if we do not 
address this immediate concern of getting 15,000 more truck 
drivers, and if we do not especially address the question and 
the issue why are 90 percent of our commercial truck drivers 
not lasting a year, that doubles the impact of this challenge. 
It is sort of like trying to fill the bucket up, and we can put 
all the water in it, but it is meaningless if we don't close 
the holes at the bottom of the pail. And so, this is why I 
wanted to let you know that this Agriculture Committee is not 
waiting 1 second on that. We are already moving to put this in 
action, and we are calling upon the impacted committees, 
Transportation and Infrastructure, and Education and Labor, to 
try to see what we can do, and then pull in the Labor 
Department, the Transportation Department, the Secretary, and, 
of course, our Secretary, Tom Vilsack.
    Now, some of this is going on already, and I want to give 
President Biden some credit here, folks. He gets a lot of 
blame, but he has moved on this already. With his 24/7 Plan, 
that has opened up a way for us to get what truck drivers we 
have on the road that can travel weekends, they can travel 
nights now, 24 hours, 7 days a week. But, if we don't have the 
truck drivers, what good is that? So, this is why we have to 
move urgently, and put together a major recruitment and 
retention program for commercial truck drivers.
    And now I just want to also thank our Secretary of 
Agriculture, who has moved on this, in terms of putting money 
already out there. I think it is about $10 billion that he is 
already putting into action, in terms of making sure that the 
Agriculture Department is ready right now to assist with this 
in providing emergency funds to make sure we maintain. But all 
I say is that we have a tremendous challenge here. We can't shy 
from it.
    And I want to conclude my opening remarks by saying that we 
are a great nation, and we have gone through some major 
challenges. At this point, this is our Paul Revere moment. We 
have to sound the alarm on this weakness that we have right now 
of needing 15,000. This is what they are saying. We need 15,000 
truck drivers right this moment. This will maintain where we 
are. And then we really need to work with the nitty gritty of 
it of retention. I was just shocked when they informed me that 
90 percent right now of our truck drivers don't last a year.
    So, this is a serious problem, we are moving forward, and I 
just appreciate everybody here today, and I wanted to just 
sound the alarm. But also, now we must have a Franklin Delano 
Roosevelt moment. When they had the Depression during the 
1930s, we responded, and we did things we did not even do 
before, didn't know how to do. And as a result of going through 
that, we put things in place as a result of the Depression that 
are lasting and helping us right to this day. This is our 
shining moment, Committee. Let us rise to the occasion, and let 
us address this real tough issue of getting more commercial 
truck drivers, and retaining them.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning, and welcome to today's hearing as we discuss a 
critical issue that impacts every single person in this country--the 
immediate challenges to our nation's food supply chain.
    Today's hearing will be an important look into how widespread these 
supply chain issues are, the logistics involved with ensuring our 
shelves are stocked, how the food and agriculture industry has had to 
pivot to rise to the moment, and ultimately, what Congress and our 
House Agriculture Committee can do to alleviate these disruptions.
    To start--the supply chain challenges are widespread and 
unprecedented. They are not limited to food and agriculture, and they 
are global in nature. These challenges were largely driven by the 
pandemic and have persisted, due to the uneven recovery and the Delta 
variant of COVID-19. The pandemic created significant new challenges, 
and it revealed and intensified other issues in our supply chain that 
existed before the pandemic, like labor shortages and shortages of our 
critically important truck drivers. For example, the food service 
distribution industry has an estimated 17,500 warehouse positions and 
15,000 driver positions currently open.
    Congress and this Committee have been working with the 
Administration to get to the bottom of these challenges and understand 
how we can partner with industry to assist the recovery and rebuilding 
process.
    Some of our House Agriculture Subcommittees have already held 
hearings on specific sectoral concerns, including the beef supply chain 
and small and local supply chains. We also had a meeting with the 
Federal Maritime Commission to discuss shipping issues and possible 
remedies. This full Committee hearing will take a broader, holistic 
view of the food and agriculture supply chain.
    While these supply chain disruptions are serious and unprecedented, 
it is important to remember that we are not facing a scarcity of food 
and agricultural commodities. The U.S. is still the world's best 
producer of an abundant, secure food supply. Despite the challenges our 
agricultural industry is facing, it is also still on pace to set record 
export levels. And in the cases of commodities that have enjoyed higher 
prices recently, those prices are welcomed by farmers, many of whom 
suffered from low prices for years prior to the market improving.
    I also do not want to understate that these complex disruptions are 
causing economic hardship, delays, limited product choices, increased 
costs of production, and most notable for much of the American public, 
increased prices for consumer goods.
    We are committed to doing our part in Congress and the House 
Agriculture Committee to shine a light on these issues and partner with 
industry and the Administration to find solutions. I commend President 
Biden for his hard work to take these supply chain challenges head on, 
as evidenced by his recent deal with ports to run 24 hours a day, 7 
days a week, and the workforce development provisions in the 
Infrastructure Investment and Jobs Act. The President also had the 
wisdom to include Agriculture Secretary Tom Vilsack as one of the co-
chairs of his Supply Chain Disruptions Task Force. Secretary Vilsack 
has announced significant USDA resources, targeted toward resolving the 
bottlenecks in the food and agriculture supply chain. I look forward to 
working with him to help our incredible food and agriculture industry 
get through these formidable challenges.
    With that, I'd now like to welcome the distinguished Ranking 
Member, the gentleman from Pennsylvania, Mr. Thompson, for any opening 
remarks he would like to give.

    The Chairman. And with that, I will yield to our Ranking 
Member for his remarks.

STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF PENNSYLVANIA

    Mr. Thompson. Well, Mr. Chairman, thank you very much, and 
I agree with you. We need to sound the alarm, because I think 
we are actually in a crisis, when I look at all aspects of 
this, and things that were perhaps avoidable, and most 
importantly, things that we can address with the right action, 
so I am looking forward--we have a talented group of witnesses 
today on the panel that have come forward to share their 
perspective. I am really interested to hear--we really do need 
a root cause analysis of all the things that have contributed. 
I have worked on--in my role as a senior Member on Education 
and Labor, and a leader on career in technical education, I 
have worked on the CDL drivers for many years, and we actually 
have tools out there to help people get trained, so it is not a 
matter of not having resources dedicated there.
    This hearing today is a very important and long overdue 
hearing to review the current strains within the supply chain, 
and their impact on American agriculture, and I see this as the 
first of what I hope will be many public conversations on this 
topic by our Committee. We have a talented panel today, but 
this is impacting every American family, and we have a lot of 
key stakeholders that we weren't able to fit onto the panel 
today, so I would certainly encourage--and this is a crisis. I 
would encourage that we do a series of these hearings.
    I point to just an article yesterday, in one of my largest 
newspapers, probably one of my largest newspapers, The 
Derrick,\1\ of Oil City, that talked about the Cranberry Area 
School District, that normally receives, from their food 
distribution, 100 cases of food. That is what it takes to 
provide something I think that we somewhat take for granted, 
school lunches, and they are getting 50, and the wonderful men 
and women that are working in food services at that school 
district are trying to do their best to be creative as to how 
they deliver the nutrition that they need to do for those 
school lunches, or breakfasts, that the kids need to have. That 
is a crisis, when you have school districts that have their 
supplies cut in half.
---------------------------------------------------------------------------
    \1\ Editor's note: the article referred to is located on p. 141.
---------------------------------------------------------------------------
    I am looking forward to hearing about workforce issues, 
looking forward to hearing--I think there is an entire side of 
this that the Biden Administration has ignored, in terms of 
disruption of food supply, and that is the fact that our 
farmers, who rely on domestic exports--we have a lot of--a 
tremendous amount--probably the majority of shipping containers 
going back overseas empty, and we have these commodities that 
are so important to our rural communities, and our farmers and 
ranchers, that are sitting there ready to go. We don't need 
truck drivers for that. I don't know what we need. We need some 
type of change to--where these containers are not allowed to go 
back overseas empty.
    We need flexibility, and regulation implementation. We need 
a transition, a pivot, from the Biden energy policy that has 
reduced the amount of natural gas production. And I am not--
specifically about that as an energy source--as the derivatives 
used to manufacture plastics, because for every food supply, we 
need packaging, and plastics are an important part of that. So, 
there is a lot that I am looking forward, hopefully, to hearing 
about today.
    As the United States emerges from the pandemic, we are 
facing a new combination of challenges and consequences, 
including rapidly rising inflation, skyrocketing energy costs, 
and a shortage of available goods and labor. Now, as we 
approach the holidays, these issues are on the minds of every 
American. And in addition to everyday needs, meals, gifts, and 
celebrations will look wildly different this year as families 
face an onslaught of high prices, limited stock, and minimal 
customer service. Now, the Biden Administration would lead you 
to believe that these are ``high class problems.'' That is kind 
of a flippant statement, and I believe that it represents just 
how out of touch this Administration is with main street. Main 
street and farm lanes, let me put it that way, and the everyday 
people who see their hard-earned dollar stretched thinner every 
day.
    Mr. Chairman, I would have liked to see the Administration 
participating in today's hearing, because whatever solutions 
that we can identify, we need them to be able to execute or to 
administer. That is what the Executive Branch is supposed to 
do. And while I appreciate the peril that each of our witnesses 
is working through, I think it is necessary to hear from one of 
the main culprits. In too many instances the White House uses 
industry as a scapegoat, rather than partnering with them to 
solve problems.
    And while we can pull other factors, like natural 
disasters, much of what we will hear about today is how 
feckless liberal policies under consideration by this 
Administration are compounding, instead of mitigating, this 
crisis. This Administration has single-handedly perpetuated a 
fear of high taxes--higher taxes, contemplated regulations 
without any type of flexibility that will limit crop protection 
tools and land use, reduce our nation's energy dependence, and 
reverted to divisive and unreasonable vaccine mandates, and 
challenged regulations in our transportation sector. And to 
make matters worse, as we sit here, trillions more in reckless 
spending are being readied behind closed doors. Funding that 
will only add fuel to the fire of skyrocketing inflation and 
economic uncertainty.
    More so, and let me be very clear, this is a ruinous crisis 
for our farmers and ranchers. You buy retail, sell wholesale, 
and pay shipping each way. Increased input costs are hampering 
producers' abilities to provide an affordable food and fiber 
supply. To add insult to injury, transportation and shipping 
delays, as you have reflected on, have had serious consequences 
on their ability to export products, a void being filled by 
foreign competitors.
    Now, I can only hope that this excellent panel will shed 
some light on a path out of this mess. We are looking for 
solutions, that is what we do in the Agriculture Committee, and 
I hope this Committee considers inviting the Administration to 
testify about this issue as well. I look forward to working 
with you, Mr. Chairman, to bring forth solutions, many of which 
we will hear about today, and I want to thank the expert 
witnesses who have joined us today on very short notice, and 
the numerous associations, organizations, and businesses who 
have provided additional testimony in advance of the hearing. 
With that, Mr. Chairman, thank you, and I yield back.
    The Chairman. Thank you, Ranking Member. And now the Chair 
would request that other Members submit their opening 
statements for the record so witnesses may begin their 
testimony, have ample time, and to ensure that they do indeed 
have ample time to answer our questions, and be able to share 
their knowledge with us. And now it is my great pleasure to 
welcome our distinguished panel of witnesses. First of all, 
thank you very much for coming, and preparing, and sharing with 
us your information.
    Our very first witness is Mr. Jon Schwalls. Mr. Schwalls is 
the Executive Officer of Southern Valley Fruit and Vegetable, 
Incorporated, from the great State of Georgia. Southern Valley 
is a produce growing, packing, and shipping facility, and Mr. 
Schwalls is testifying on behalf of the Georgia Fruit and 
Vegetable Growers Association. Welcome.
    Our next witness is Mr. Ed Cinco, who is the Director of 
Purchasing for Schwebel's Baking Company, based in Youngstown, 
Ohio. He is testifying on behalf of the American Bakers 
Association.
    And our third witness today is Mr. Greg Ferrara, who is 
President and Chief Executive Officer of the National Grocers 
Association, NGA. NGA represents America's 21,000 independent 
community grocers, and the wholesalers that service them.
    And now to introduce our fourth witness today, I am pleased 
to yield to our distinguished Chairman of our Livestock and 
Foreign Agriculture Subcommittee, our colleague from 
California, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman, and this is a 
very important and serious hearing that we are having, and it 
is timely, and I thank you for that. And I know you are in a 
good mood this morning because the Braves did bring it home 
last night, so you have a smile on your face.
    The Chairman. Yes.
    Mr. Costa. This next gentleman--if you like pizza, you are 
going to like my friend, Mike Durkin from Leprino Foods. They 
are the largest producer of mozzarella cheese in the nation, 
which means the world, but they also produce a lot of other 
important proteins, and lactose and dairy ingredients that are 
critical to our food supply chain. And Mr. Durkin's experience 
in other leading roles puts him in a good position to testify 
this morning, Mr. Chairman, and Members of the Committee, of 
the critical challenges, and the crisis that we are facing in 
our supply chain. We look forward to hearing his testimony, as 
well as the other witnesses'.
    The Chairman. Thank you, Mr. Costa. Now our fifth witness 
is Mr. Jon Samson, Vice President of Conferences and Executive 
Director of Agriculture & Food Transporters Conference, 
American Trucking Association. The American Trucking 
Association represents every sector of the trucking industry, 
including members who work in the food supply chain. What a 
distinguished panel that we have.
    And now, finally, to introduce our sixth witness, I am 
pleased to yield to our colleague, the distinguished gentleman 
from Illinois, Mr. Rodney Davis.
    Mr. Davis. Thank you, Mr. Chairman, and I have to say, the 
winning Braves manager comes from Illinois's 13th District. 
Brian Snitker grew up in Macon, Illinois, and, as an almost 
lifelong Braves fan, I am right with you on the championship, 
Mr. Chairman.
    The Chairman. Man, thank you. What a night, what a World 
Series.
    Mr. Davis. It was a great night, great night. And I do want 
to say thank you to my good friend Rod Wells. He is the Chief 
Supply Chain Officer at GROWMARK, Inc., and he is here on 
behalf of the Agricultural Retailers Association. GROWMARK 
employs and serves an incredible number of constituents that I 
represent in my ag-centric district in Illinois, but for all of 
you on this Committee who know me, you may feel very sorry for 
Mr. Wells, because he was my neighbor when I moved to Illinois 
back in 1977, so he had to put up with me on a very personal 
basis. Even when he went to--he and his family moved halfway 
across the State to Olney, Illinois, I used to spend a lot of 
holidays and New Years' down with he and his family. But I 
couldn't ask for a better witness to talk about the issues 
affecting central Illinois, and southwestern Illinois, and my 
constituents, and this great nation, for that matter, when it 
comes to the supply chain. Welcome, Rod, and you are lucky I 
didn't give away any secrets. I yield back.
    The Chairman. Thank you, Congressman Davis. I appreciate 
that. And I am so pleased to have this distinguished panel of 
witnesses before us, and each of you will have 5 minutes. The 
timer will be visible to you on your screen, and will count 
down to zero, at which point your time has expired. So why 
don't we get right into it? Mr. Schwalls, you will be first. 
Please begin when you are ready.

   STATEMENT OF JON T. SCHWALLS, EXECUTIVE OFFICER, SOUTHERN 
VALLEY FRUIT AND VEGETABLE, INC., NORMAN PARK, GA; ON BEHALF OF 
        GEORGIA FRUIT AND VEGETABLE GROWERS ASSOCIATION

    Mr. Schwalls. Chairman Scott, Ranking Member Thompson, 
Members of the Committee, thank you for your invitation to 
participate in today's hearing. My name is Jon Schwalls, and I 
am the Executive Officer at Southern Valley in Norman Park, 
Georgia. I am here today on behalf of the Georgia Fruit and 
Vegetable Growers Association. Southern Valley is a fully 
integrated year-round growing, packing, and shipping operations 
of fruits and vegetables. I appreciate the opportunity to speak 
with me today and share how the pandemic has created 
unprecedented challenges to our supply chain, placing the 
produce industry in a crisis.
    When the pandemic began in March of 2020, Southern Valley 
did as many farming operations did, we quickly implemented 
procedures to protect our workers and consumers by mitigating 
any potential exposure to the virus. Even though nearly half of 
our market share had disappeared due to closure of restaurants, 
schools, cafeterias, our spring crop had already been planted 
at that time, so we had no choice but to harvest that crop, 
while also protecting the health and the safety of our 
employees.
    For the first 6 months of the pandemic, our costs for 
COVID-19 prevention and employee health and safety were over 
$120,000. We survived 2020, and first half of 2021, but it has 
certainly not been without significant increase to inputs and 
costs. Recurring monthly costs of $16,000 for COVID prevention 
continue today. These costs include our health task force, 
which is led by a local physician, additional security 
measures, PPE, quarantine housing, and related supplies.
    We have made substantial adjustments in our purchasing 
model to help alleviate costs with the price forecast. Southern 
Valley has contracted our year's supply of crop protection 
products, fertilizers, and fuel for farm operations during the 
first quarter of the year. Farming operations have not only 
increased in field input costs, but also shortage in supply of 
many inputs, and suppliers can no longer guarantee our price 
due to the shortages, shipping delays, and production.
    The industry has seen unprecedented increases over the past 
12 months for production costs. Specific cost increases that we 
have seen here today are fertilizers, which are up 35 percent; 
crop protection products, 25 percent; fuel, 48 percent; and 
plastic and drip tape, 35 percent. We have also had significant 
increases of packing costs. Corrugated boxes, up 17 percent; 
packing supplies, 30 percent; pallets, 75 percent; and 
refrigerant, 200 percent. Our outbound freight to customers is 
up 40 percent.
    We are in a supply chain crisis. The U.S. ports we rely on 
are backed up, and products needed for farming, such as tractor 
tires and computer chips, are waiting to be unloaded. There are 
not enough drivers, warehouses, chassis, and shipping 
containers to keep the product moving to their intended 
customer, which in this case is the American farmer. Some 
examples are: previously crop protection products could be 
sourced the same or next day. Now that is 7 to 10 days. That is 
very important, because diseases and fungus are time sensitive. 
Even a few days' delay can have a significant impact on crop 
yield and/or total crop loss. Fertilizers that could previously 
be sourced within a week, we are waiting 3 to 4 weeks now. And 
things like tractor tires that could be sourced the same day, 
we are not even being given a delivery date.
    In the early days of the pandemic, the Federal and state 
governments took swift action to invest in the food systems, 
and to work together to keep supply chains moving. The 
situation we now face echoes some of the challenges we faced in 
the spring of 2020. Finally, Georgia lacks a processing 
facility for produce. Currently there is no opportunity to 
market produce that is cosmetically flawed. The addition of a 
processing facility would allow products that are currently 
tossed to be sold in one of four categories, fresh cut, fresh 
prepared, fresh frozen, or frozen prepared. A facility like 
this would make great strides in reducing food waste, as well 
as adding shelf life to these fruits and vegetables.
    In times when producers are spending more to grow their 
product, a processing facility would incentivize growers to 
stay in farming to better balance out the additional costs 
incurred throughout the pandemic, and supply chain crises, and 
create food safety and stability. I thank you for allowing me 
to participate today. I look forward to the continued 
discussion, and I will be able to answer any questions you have 
today or follow up after the hearing. Thank you.
    [The prepared statement of Mr. Schwalls follows:]

  Prepared Statement of Jon T. Schwalls, Executive Officer, Southern 
Valley Fruit and Vegetable, Inc., Norman Park, GA; on Behalf of Georgia 
                Fruit and Vegetable Growers Association
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the invitation to participate in today's 
hearing. Today, I want to bring attention to the resiliency of the 
produce industry and ask for assistance as we continue to adapt through 
the current supply chain crisis.
    My name is Jon Schwalls, I'm an Executive Officer at Southern 
Valley in Norman Park, GA, here today on behalf of Georgia Fruit and 
Vegetable Growers Association. Southern Valley is a fully integrated, 
year-round growing, packing, and shipping operation for fruits and 
vegetables.
    In my 26 years with Southern Valley, I've had the opportunity to 
work in multiple capacities, from my direct involvement in the supply 
chain, to the development and implementation of a vertically integrated 
business structure, to the daily oversight of all operations.
    I appreciate the opportunity to speak to the Committee today and 
share how the pandemic has created unprecedented challenges to our 
supply chain, placing the produce industry in crisis.
    When the pandemic began in March of 2020, Southern Valley did as 
many farming operations--we quickly implementing procedures to protect 
our workers and consumers to mitigating any potential exposure to the 
virus.
    With the spring crop planted at the height of the pandemic, we knew 
harvesting was necessary and we had to protect our employees, even 
though nearly half of our market had disappeared with the closure 
restaurants, school cafeterias, and more. In the first 6 months of the 
pandemic, our costs for COVID-19 prevention were over $120,000. This 
included initial costs of $27,500 for personal protection items and 
housing/facility alterations to maintain employee protection and social 
distancing.
    We survived 2020 and the first half of 2021, but it has not been 
without significant input costs. Recurring input costs for [COVID] 
prevention which continues today include our Health Task Force, led by 
a physician to examine operations and improvements at $3,000/month, 
security to protect our employees from the risk of infection from non-
employees being brought in at $5,400/month, as well as PPE, quarantine 
housing, and related supplies at an additional $7,500/month.
    We've made substantial adjustments in our spending model to help 
alleviate costs. With price forecasting, Southern Valley purchased our 
year's supply of crop protection products, fertilizers, and fuel for 
farm operations in January and February of this year.
    Farming operations are facing, not only increased field input 
costs, but also a shortage in supply of many inputs. Suppliers can no 
longer guarantee supply with the increased demand, and they are unable 
to give us a price on crop protection products or fertilizers going 
forward.
    While we were able to lock in some input prices, the industry has 
seen unprecedented increases over the past twelve months for field 
input costs. Specific cost increases Southern Valley has experienced 
year to date include:

 
 
 
Field Input Cost Increase
 
  Fertilizers..............................................          35%
  Crop Protection Products.................................          25%
  Fuel.....................................................          48%
  Plastic Mulch and Drip Tape..............................          35%
 
Packing Cost Increase
 
  Corrugated Boxes.........................................          17%
  Packaging supplies.......................................          30%
  Pallets..................................................          75%
  Refrigerant..............................................         200%
Transportation Increase
  Outbound Freight.........................................          40%
 

    Now we find ourselves in the middle of a supply chain crisis. The 
U.S. ports we rely on are backed up and products needed for farming 
such as tractor tires and computer chips are waiting to be unloaded.
    Once unloaded, there are not enough drivers, warehouses, and 
shipping containers to keep the products moving to their intended 
customer, in this case the farmer. Some examples of this are:

   Previously, Crop Protection Products could be sourced by the 
        same or next day. This is important as diseases and fungus are 
        very time sensitive, even a few days delay can have a 
        significant impact on crop yield and or total losses. We 
        currently have a 7-10 day wait to source these products.

   Fertilizers could previously be sourced within a week; we 
        are now waiting 3-4 weeks.

   Tractor tires could be sourced the same day, within the last 
        year it's moved to 5-7 days, currently many of the tires we 
        need cannot be sourced with a delivery date.

   Tractor parts. Normally same day--2 days at most, now we 
        have backorders for 2-14 weeks.

    This problem hits close to home in Georgia with Savannah's port, 
the largest in the western hemisphere, unable to move shipments. There 
are reports that on an average, pre-pandemic, there would be 10,000 
containers waiting to be trucked from the port in Savannah, but in the 
past several months that number has increased almost to 80,000 
containers waiting to be moved.
    In the early days of the pandemic, our Federal and state 
governments took swift action to invest in food systems and to work 
together to keep supply chains moving. The situation we now face echoes 
some of the challenges we faced in the spring of 2020.
    Finally, Georgia lacks a processing facility for produce. Today's 
consumer and retailer want a flawless product. Currently, if a fruit or 
vegetable is cosmetically flawed, it is thrown away with no other 
opportunity for market. The addition of a processing facility would 
allow products that are currently tossed to be sold in one of four 
categories: fresh cut, fresh prepared, frozen cut, frozen prepared. A 
facility like this would make great strides in reducing food waste as 
well as adding shelf life to these fruits and vegetables. In times when 
producers are spending more to grow their product, a processing 
facility would incentivize growers to stay in farming--to better 
balance out the additional costs incurred throughout the pandemic and 
supply chain crisis.
    Thank you for allowing me to participate today. I look forward to 
the discussion and am able to answer questions today or in follow-up 
after the hearing.

    The Chairman. Thank you very much, Mr. Schwalls. And now we 
will recognize Mr. Cinco. Please begin when you are ready.

   STATEMENT OF ED CINCO, DIRECTOR OF PURCHASING, SCHWEBEL'S 
   BAKING CO., YOUNGSTOWN, OH; ON BEHALF OF AMERICAN BAKERS 
                          ASSOCIATION

    Mr. Cinco. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the House Agriculture Committee. Thank 
you for holding this hearing, and for the opportunity to 
testify today on the unique supply chain challenges that face 
the baking industry. My name is Ed Cinco, and I am the Director 
of Purchasing for Schwebel's Baking Company. Schwebel's Baking 
Company has been a household name in Youngstown, Ohio since 
1906, a company founded by Doris Schwebel, and family-owned 
since its inception. Currently Schwebel's has a workforce of 
800 employees in two bakeries, with a dedicated delivery team. 
Schwebel's product lines include hearth breads, traditional 
white bread and buns, variety breads spanning wheat and 
breakfast breads. I am testifying today on behalf of the 
American Bakers Association, of which Schwebel's is an active 
member, who represents 300 companies and 1,600+ facilities. 
Today I will provide an overview of the multi-faceted supply 
chain disruptions that the baking industry is currently facing, 
and what we will be facing in the future.
    First issue I would like to discuss is the workforce 
shortage in the baking industry. Schwebel's Baking Company has 
not been immune to the workforce shortage. We have experienced 
high levels of turnover due to the need of 24/7 production runs 
to provide a fresh quality product to our customers. The 
shortage of workers in our sector means we do not have enough 
workers for our shifts. We are forced to shut down production 
lines, this results in fewer products being delivered to retail 
stores and food services, including restaurants and 
institutions. Additionally, many wholesale bakers provide baked 
goods for Federal feeding programs, including the School 
Breakfast and Lunch Programs, SNAP, and WIC. The baking 
industry is also facing a shortage of drivers. The baking 
industry has one of the largest trucking fleets in the United 
States and is reliant upon drivers to transport our products to 
the end-user.
    Further, these workforce challenges have significantly 
impacted our suppliers. ABA has a real concern over President 
Biden's COVID-19 action plan that will make this workforce 
tighter, due to the fact that they will have to be vaccinated. 
The baking industry does support the President's goal of 
getting Americans vaccinated, but we have real concerns about 
the rulemaking and the negative impact on the fragile 
workforce. We also worry about the access to COVID-19 rapid 
tests.
    Baking industry uses a variety of transportation modes, 
including ports, rails, roads to move supplies to and from the 
bakery. The industry is reliant on the U.S. ports to move the 
freight to--these recent bottlenecks have negatively impacted 
the smooth flow of trade for both ingredient suppliers and 
exports of the American products. Failure to alleviate these 
will lead to unusable products due to short shelf lives of some 
ingredients. Successful baking operations require sourcing of a 
unique combination of inputs, including commodities, specialty 
ingredients, packaging, and baking equipment to keep producing 
products. Reliable and consistent procurement of supplies under 
normal circumstances is a complex, difficult task, but when 
supply chains are unpredictable or slowed, bakers become highly 
vulnerable.
    Depending on the baked goods produced, companies will need 
a wide array of inputs, flour, oil, sugar, spices, gluten, et 
cetera. Recently we have seen a supply shortage of critically 
important ingredients such as gluten, emulsifiers, soybean oil, 
and packaging. Upcoming issues are being projected for honey, 
sesame seeds, and durum flour, which is a main part of the 
school lunch programs. The demand for soybean oil and other 
vegetable oils has exceeded the current domestic supply. There 
are several factors influencing the edible oil supply 
availability. The 2020 drought, lower than projected plantings 
in 2021, and President Biden's EPA's Renewable Biodiesel 
Program. This means for some food companies edible oil will 
literally not be available at any price due to the diversion of 
the edible oil to the biodiesel industry.
    Some bakers can order ingredients and supplies ahead of 
their normal ordering schedule to ensure delivery of products 
to customers. Unfortunately, this comes at a substantial cost 
to the manufacturer, as it takes significant planning, 
resources, and additional space, as well as carrying costs. ABA 
members are reporting that because of the lack of certain 
ingredients, they will no longer be able to manufacture 10 to 
15 percent of their product line. If the United States is 
unable to alleviate the pressure around the critical baking 
ingredients, bakers could anticipate less products on store 
shelves and in food services, as well as those dependent on 
USDA feeding programs. Bakers will have to make tough 
decisions, and this is going to impact American families.
    The baking industry is facing numerous challenges, 
workforce, transportation, supply, procurement, and regulatory 
requirements, all of which threaten to disrupt the fragile 
supply chain. Thank you for the opportunity to testify.
    [The prepared statement of Mr. Cinco follows:]

  Prepared Statement of Ed Cinco, Director of Purchasing, Schwebel's 
  Baking Co., Youngstown, OH; on Behalf of American Bakers Association
    Chairman Scott, Ranking Member Thompson, and Members of the House 
Agriculture Committee:

    Thank you for holding this hearing on ``the immediate challenges to 
our nation's food supply chain'' and for the opportunity to testify 
today on the unique supply chain challenges that are facing the baking 
industry. My name is Ed Cinco, and I am the director of purchasing for 
the Schwebel's Baking Company.
    Schwebel's Baking Company has been a household name in Youngstown, 
Ohio since 1906. The Company was founded by Dora Schwebel and has been 
owned by the family since its inception. Currently, Schwebel's has a 
workforce of 800 employees spanning two bakeries along with a dedicated 
delivery team. Schwebel's product line includes Hearth breads, 
traditional white pan bread and buns, as well as variety breads 
spanning from wheat breads to breakfast breads.
    I am testifying today on behalf of the American Bakers Association 
(ABA), of which Schwebel's Baking Company is an active member. ABA is 
the Washington, D.C.-based voice of the wholesale baking industry. 
Since 1897, ABA has worked to increase protection from costly 
government actions, build the talent pool of skilled workers with 
specialized training programs, and forge industry alignment by 
establishing a more receptive environment to grow the baking industry. 
ABA's membership has grown to represent more than 300 companies with a 
combined 1,600+ facilities. The baking industry employs almost 800,000 
skilled individuals, generates over $44 billion in direct wages, and 
has an overall economic impact of over $154 billion.
    Today, I will provide an overview of the multi-faceted supply chain 
disruptions that the baking industry is experiencing currently and what 
we will be facing in the future. ABA members want to ensure a 
continuity for a reliable and steady production and supply of 
delicious, nutritious, baked goods throughout the country for American 
families, food service and the USDA's Federal feeding programs to 
ensure food security for all.
Workforce Shortage
    Workforce shortages are a critical supply chain barrier the baking 
industry is facing. The baking industry was designated as essential 
critical infrastructure by the Department of Homeland Security at the 
outset of the COVID-19 pandemic. Our workers are essential and when the 
industry faces a worker shortage, it poses a major threat to the baking 
industry's supply chain.
    Schwebel's baking Co. has not been immune to workforce shortages, 
we have experienced high levels of turnover due to a need to run 24/7 
in order to produce a fresh quality product. In addition to the lack of 
new employees the aging and experienced workforce are leaving at an 
alarming rate due to the new issues facing the world. This lack of new 
trained employees and the loss of experience has put a strain on the 
current workforce the likes not seen by Schwebel's in its 115 year 
existence.
    The shortage of workers in our sector; means that if we don't have 
enough workers for our shifts, we are forced to shut down production 
lines. This results in fewer products being delivered to retail stores 
and food service including restaurants and institutions. Additionally, 
many wholesale bakers provide baked goods for the Federal feeding 
programs that include the School Breakfast and Lunch Programs, SNAP and 
WIC. In the current supply chain hurdle climate, many bakers are 
turning down additional business as they only have the workforce to run 
limited production lines--forcing difficult choices on which products 
to make, and when.
    The baking industry is also facing a shortage of drivers. This 
issue is being felt by many manufacturing sectors, which makes it even 
more difficult to find and retain talent. The baking industry has one 
of the largest trucking fleets in the U.S. and is reliant upon drivers 
to transport our products to the end customer. Further, these workforce 
challenges are impacting our suppliers. For example, we depend upon 
specific ingredients and supplies to make and package our products. 
Some ingredient suppliers are hesitant to take on new business for fear 
of being unable to deliver their product to the manufacturer, forcing 
bakers to consider other methods of sourcing thus further increasing 
the prices of ingredients.
    Last, the industry is already struggling with retaining and 
recruiting workforce. ABA members have real concern that the 
President's COVID-19 Action Plan will only make the workforce situation 
worse. The baking industry supports the President's goal of getting 
Americans vaccinated, but we have real concerns on how such a 
rulemaking will negatively impact our industry's fragile workforce.
    ABA is a member of the U.S. Rapid Action Consortium (RAC) whose 
mission is to safely and effectively reopen the U.S. economy faster 
through a COVID-19 rapid action testing system to enable U.S. 
businesses to better create safer workplaces. The Consortium has 
already seen a significant supply chain strain on members' ability to 
access COVID-19 rapid tests through these efforts. The logistics of 
COVID-19 vaccines, booster shots and testing are challenging and with 
the ongoing workforce shortage, thoughtful and flexible compliance 
implementation with a vaccine and testing policy will be critical to 
keeping our bakeries operational.
    I am incredibly proud of Schwebel's workforce and the entire baking 
industry. Throughout the pandemic, we have been hard working and 
resilient to ensure a steady supply of baked goods for communities 
across the nation.
Operational Bottlenecks
    The baking industry uses several transportation modes including 
ports, rails and roads to move supplies and end products to customers. 
The industry is reliant upon U.S. ports to move freight. The recent 
bottlenecks at the ports have negatively impacted the smooth flow of 
trade for both ingredient and supply imports and exports of American 
products.
    ABA is supportive of the move to begin operating ports 24 hours a 
day, 7 days a week to begin to alleviate this congestion. In the baking 
industry, manufacturers are operating 24 hours a day. Logistical 
transport for bakery products is typically done overnight as there is 
less traffic and so that fresh products can be delivered to customers 
in the early morning hours.
    Additionally, failure to alleviate the port bottlenecks could mean 
rancid ingredients, rendering these inputs unusable due to excessive 
delays in transit. For example, soybean oil, a crucial component in 
many baked goods, has a short shelf life. Recently, a U.S. soybean oil 
supply crisis has made the U.S. a net importer of this ingredient, 
forcing U.S. bakers to become increasingly dependent upon imports of 
this expirable product. If a vessel remains at port for an 
unforeseeable time, this could make the ingredient unusable. Such a 
situation could result in halting production of specific products in 
which the ingredients are essential.
    Rail is another mode of transportation that is used by bakers to 
deliver large quantities of ingredients, such as flour. However, bakers 
are experiencing issues with rail as the deliveries are often 
inconsistent and unreliable. Bakers are experiencing deliveries that 
are getting stuck at the rail yards. This has led many bakers to 
consider alternative modes of transportation to ensure delivery of 
supplies and ingredients.
    Last, as mentioned previously, the driver shortage creates another 
barrier to delivering products by truck. Bulk transportation for tank 
or silo materials is especially short drivers due to the logistical 
issues associated with a time sensitive delivery. Timing is critical as 
not to run out or overload the tank or silo at time of delivery and can 
occur at any time on any day. It is important that these transportation 
and logistics issues be resolved to ensure the continued reliable and 
steady supply of baked goods throughout the U.S.
Supply Procurement
    Successful baking operations require sourcing of a unique 
combination of inputs, including commodities, specialty ingredients, 
packaging, and baking equipment to keep producing merchantable, quality 
products. Reliable and consistent procurement of supplies under normal 
circumstances is a complex and difficult task, but when supply chains 
become unpredictable or slowed, bakeries become highly vulnerable.
    Among all inputs, the sourcing of commodities and ingredients are 
often the largest challenge for baking manufacturers. Depending on the 
baked goods produced, companies will need a wide array of inputs, such 
as flour, oils, sugar, spices, gluten, vinegar, etc. Recently, we have 
seen supply shortages on critically important ingredients such as 
gluten, emulsifiers, soybean oil, packaging, and printing capabilities 
for the packaging. Upcoming issues are being projected for Honey Sesame 
Seeds and Durum Flour which is a main part of the school lunch program. 
Many of these challenges directly result from the global disruption of 
the highly connected global supply chain further exacerbated by COVID-
19.
    The demand for soybean oil and other vegetable oils has exceeded 
the current domestic supply. There are several factors influencing the 
supply availability. The 2020 drought, lower than expected projected 
plantings in 2021 and the EPA's renewable biodiesel program play a 
large role in the soybean oil supply crisis bakers are experiencing 
today. Additionally, non-food use for biodiesel and renewable diesel 
has expanded greatly and this demand is anticipated to double in the 
next 2 years. As a result, economists report that vegetable oil prices 
have tripled in the past 12 months and that the food sector faces 
rationing and shortages for the third quarter of 2021 and into 2022. 
The increase in biodiesel has also reduced the processing capacity 
available for vegetable oils. Additional capacity is being created but 
is not projected to go on-line until 2023.
    This means for some food companies, edible oil literally will not 
be available at any price due to diversion of edible oil from producing 
food to burning as fuel at the end of this calendar year. One solution 
is for the Environmental Protection Agency (EPA) to use its statutory 
authority under the Federal Renewable Fuel Standard (RFS) program to 
consider food and commodity prices and impact to the supply chain when 
setting the 2021 and 2022 Renewable Volume Obligation (RVO) mandates 
for biodiesel and renewable diesel. Congress gave EPA flexibility in 
setting targets and intended that EPA transition the program away from 
burning food, and toward next-generation cellulosic technology using 
residuals and other non-food feedstocks. EPA has the authority to set 
the RVO targets at levels that do not disrupt agricultural markets and 
our food supply.
    Another critical issue impacting bakers is the shortage of gluten. 
The domestic Gluten supply is currently depleted, which means the 
gluten needed for bread production must now rely on imports. However, 
the vessel and container shortages coupled with bottlenecks at the U.S. 
ports complicate the receipt of this critical ingredient. The result 
was a simple case of supply and demand which forced many suppliers to 
default on 2021 contract since they simply did not have the necessary 
volume. The lack of volume caused a bidding war where gluten price more 
than tripled from their budgeted prices.
    The last ingredients I want to discuss are spices and seasonings. 
These ingredients are typically imported from India. India has been 
greatly impacted by the COVID-19 pandemic. Workers in India are 
retreating from crowded industrial areas to rural areas thus impacting 
the workforce and productivity. There are expected delays for spices, 
seasoning including, pepper, salt and cinnamon.
    Other issues within the supply chain are the lack of available 
containers to put new product in. The aforementioned bottleneck at the 
ports is slowing the return of empty containers to the origination 
point of an ingredient such as the spices and seed coming from India.
    The delay or lack of an ingredient could stop operations within a 
plant, resulting in store shelves going empty and workers being let go. 
Some bakers can order ingredients and supplies ahead of their normal 
schedule ensuring deliver of products to customers. Examples of current 
lead time increases are Emulsifiers (2 weeks to 8 weeks), Seeds (2 
weeks to 5 weeks), Gluten (6-8 weeks), all liquid deliveries (3 weeks 
to assure a driver). Unfortunately, this comes at a cost to the 
manufacturer, as it takes significant planning, resources and 
additional onsite or offsite storage capacity building and carrying 
costs. ABA Members are reporting that because of the lack of certain 
ingredients they will no longer be able to manufacture 10-15% of their 
product line. If the U.S. is unable to alleviate the pressure around 
the critical baking ingredients, bakers could anticipate less products 
on store shelves and in food service, as well as those dependent on 
USDA's feeding programs. Bakers will have to make tough decisions, and 
this will impact American families.
Food Labeling
    The ongoing challenges the baking sector is facing in the supply 
chain are now creating concerns about our ability to meet regulatory 
labeling obligations. In January 2021 and as recently as August, ABA 
expressed concerns to the USDA's Agricultural Marketing Service (AMS) 
regarding its compliance date for the National Bioengineered Food 
Disclosure Standard (NBFDS or rule) of January 1, 2022. We recommended 
the USDA's AMS maintain the compliance date and exercise enforcement 
discretion for an additional year, January 1, 2023. This is an approach 
that has worked well for the FDA for food safety and nutrition 
regulations. However, to date USDA has determined that it does not have 
the authority to do so without conducting rulemaking.
    The supply chain issues have also driven formula changes to 
specific products. In turn these changes are cause ingredient and 
nutritional changes adding expense in packaging design.
    Additionally, FDA recently released its voluntary sodium reduction 
strategy guidance that only provides a 2\1/2\ year compliance period. 
Even in stable times, the timeline that bakers had requested with the 
Agency to reformulate, test, label, market and bring to retail and food 
service, is 4 to 5 years. Bakers have strong concerns that in the 
current stressed supply chain environment, it will be extremely 
difficult, if not impossible, to reach that short compliance goal.
Additional Effects
    All the issues discussed above are causing double digit percent 
price increases that are being passed on to the customers (grocery 
store, fast food, entertainment venues, schools). The increases are 
necessary for companies to stay viable for their employees and 
shareholders. Unfortunately, the end-user will see prices go up on the 
products they need. However, the real concern is access to the 
commodities, ingredients, and supplies, without that access we can't 
produce our products. Food security remains our top concern.
Conclusion
    The baking industry is facing numerous challenges: workforce, 
transportation, supply procurement and regulatory requirements, all of 
which threaten to disrupt the fragile supply chain. The baking industry 
wants to ensure store shelves, restaurant menus and Federal food 
programs continue to receive the nutritious and delicious baked goods 
American families depend on to feed their families.
    Thank you for the opportunity to testify before the Committee on 
the supply chain challenges the baking industry is experiencing.

    The Chairman. Thank you very much. And now, Mr. Ferrara, 
please begin when you are ready.

        STATEMENT OF GREG FERRARA, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, NATIONAL GROCERS ASSOCIATION, WASHINGTON, 
                              D.C.

    Mr. Ferrara. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the House Agriculture Committee. It is 
an honor to have the opportunity to testify before you today to 
provide the perspective of the independent grocer on America's 
current food supply chain challenges. My name is Greg Ferrara, 
President and CEO of the National Grocers Association. NGA is 
the voice in Washington for America's 21,000 independent 
community grocers, and the wholesalers that service them.
    Independent community grocers account for 33 percent of all 
grocery sales, exceeding $250 billion, and more than one 
million American jobs. We are inherently tied to the strength 
and vitality of the markets we serve, at the heart of the local 
communities, and the U.S. economy. Independents provide jobs 
and boost local tax revenues while bringing choice, 
convenience, and value to hard-working Americans. We serve as a 
critical market for agriculture products for independent small-
scale farmers, as independents differentiate themselves from 
their competition by sourcing locally.
    Without a doubt, the last 18 months have been the most 
challenging time in grocery that anyone in our industry can 
remember, and the COVID pandemic has made the grocery supply 
chain literally a kitchen table issue for millions of 
Americans. Since the beginning of the pandemic, we have 
experienced unprecedented levels of consumer demand. While the 
early days of the pandemic were marred by panic buying and 
acute shortages of must-have consumer products, this new phase 
of the global supply chain crunch presents a brand new set of 
challenges.
    The good news is that American consumers no longer have to 
confront the stark images that marked the beginning of the 
pandemic of empty grocery shelves and hour-long lines at 
checkout. America's food supply chain, from farmers to 
manufacturers, wholesalers to retailers, demonstrated its 
resilience and flexibility by catching up with demand in most 
grocery categories. The greatest risk we face in the market is 
not the supply chain challenges under discussion today, but 
rather the panic buying mindset of--is what poses the greatest 
risk to the availability of food, and the ability of grocers to 
keep the shelves fully stocked.
    As industry and government leaders, we must be responsible 
spokespeople for the food system, and reassure the American 
public that there is plenty of food to go around. With that 
being said, the global pandemic has changed the economy, and 
the food supply chain is adjusting to deal with the new 
challenges presented by the new economic order. From the 
independent grocer's perspective, there are three central 
factors contributing most significantly to the current supply 
chain crunch.
    First, labor availability. A common denominator from every 
witness is that the lack of labor availability is impacting all 
of us. People have left the workforce, perhaps for good. Others 
left temporarily, and still have not come back. More Americans 
are working from home, leading to a culture shift in how 
consumers shop, and what they purchase. The food industry 
continues to adapt to a shifting marketplace, but the bottom 
line is we must have access to a stable workforce in order to 
adequately meet the demands of American consumers. Despite the 
record wage growth and endless opportunities, we still face a 
major labor shortage.
    Second, shortcomings in America's transportation 
infrastructure capacity is driving supply bottlenecks and 
delays. Specifically, the trucking industry faces an acute 
shortage of truck drivers, a critical cog in the supply chain 
required to move product along each step in the food production 
cycle. America is still short by more than 100,000 truck 
drivers, and the problem is only getting worse. The Federal 
Government must take actions to increase transportation 
efficiency and capacity, while maintaining current regulatory 
flexibility, such as the hours-of-service waivers, as we see 
the letup in demand.
    Finally, third, power buyer and supply chain concentration. 
The pandemic has exposed a growing problem in the food and 
agriculture sector, market concentration has led to uneven 
supply. The largest retail power buyers use their immense 
economic power to pressure suppliers into prioritizing their 
shipments over other retail customers, while extracting 
concessions on wholesale pricing. As a result, independent 
grocers have lost access to both popular products and 
promotional pricing, often putting them at a disadvantage when 
competing with their largest rivals. Consumers that live in 
rural or low-income food-insecure areas that are typically 
served by independents are disproportionately impacted and must 
travel longer distances to find products they need at more 
crowded retailers.
    Although the current crisis has exacerbated economic 
discrimination in the grocery sector, this phenomenon is not 
confined to the pandemic. For decades independent grocers have 
not had equal access to pricing promotions and packaging deals 
that are provided to the largest firms, and during this time 
independent grocers have lost ground in many rural and urban 
areas where food deserts now exist, in large part to 
competitive disadvantages in the marketplace that often favor 
the biggest chains and dollar stores. To fix our supply chain, 
NGA believes we must fix the competitive free market and 
enforce anti-trust laws that are already on the books. That is 
why NGA, along with farmers, and business groups, and the Main 
Street Competition Coalition, is calling on Congress to revive 
anti-trust enforcement of existing laws that level the playing 
field like the Robinson-Patman Act (Pub. L. 74-692).
    Although we expect some inconveniences in product 
availability to be present in the near future, I have no doubt 
that American ingenuity, and the dedication of the patriotic 
individuals that comprise our food sector, will prevail over 
the headwinds that we face in the marketplace. It will take 
time to adjust to the new economic reality, but targeted 
interventions from our Federal policymakers will help us get 
back on the right track even quicker. With that, I am happy to 
take your questions.
    [The prepared statement of Mr. Ferrara follows:]

   Prepared Statement of Greg Ferrara, President and Chief Executive 
        Officer, National Grocers Association, Washington, D.C.
Introduction
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the House Agriculture Committee. It is an honor to have the 
opportunity to testify before you today to provide the perspective of 
the independent grocer on America's current food supply chain 
challenges. My name is Greg Ferrara, President & CEO of the National 
Grocers Association (NGA). NGA is the voice in Washington for America's 
21,000 independent community grocers and the wholesalers that service 
them.
    Independent community grocers account for 33 percent of all grocery 
sales, exceeding $250 billion and more than one million American jobs. 
We are inherently tied to the strength and vitality of the markets we 
serve--at the heart of local communities and the U.S. economy. 
Independents provide jobs and boost local tax revenues while bringing 
choice, convenience and value to hard-working Americans.
    From the customers they see each day to the local producers who 
fill their shelves, the country's independent community grocers offer 
insight into America's communities that is truly unique. Their 
aggregate influence is more than matched by their cornerstone role in 
every Congressional district, nourishing their neighbors not only with 
food and goods, but through leadership and service.
COVID-19's Enduring Impact on the Grocery Supply Chain
    Without a doubt, the last 18 months has been the most challenging 
time in grocery retailing that anyone in our industry can remember. 
Since the declaration of the national emergency and the industry's 
designation at an essential infrastructure, independent grocers have 
experienced sustained and unprecedented levels of consumer demand. In 
the early days of the pandemic, we were confronted by the 2 biggest 
weeks in grocery retailing in documented history as we experienced the 
effects of panic buying and the closure of food service establishments. 
Customers came in large volumes and stocked up on groceries and 
household products taking fewer trips with much larger basket sizes 
than normal.
    We experienced shortages across a variety of products from 
household cleaners, paper products, and shelf-stable goods like canned 
soup, vegetables, rice, beans, and pasta. When Americans visited their 
neighborhood grocery store, they were confronted with empty shelves and 
extremely long checkout lines. Many Americans wondered whether there 
would be enough food to go around to feed their families. But despite 
the initial onslaught and disruptions to our daily lives, America's 
food supply chain demonstrated its flexibility and resilience and 
caught up with demand in most grocery categories. The food supply chain 
recovered from the initial shocks and consumer confidence in food 
retailers steadily recovered. America's farmers, ranchers, and workers 
throughout the food distribution chain responded heroically and rose to 
the occasion to keep our food supply stable. In short order, retailers 
and consumers alike no longer worried about the prospect of empty 
grocery shelves and coming home empty handed after a grocery run.
    From the American farmer to the independent supermarket operator, 
our food supply chain is strong and endured the greatest test in 
generations. We are fortunate to live in a country that sources the 
vast majority of its food domestically. Although import and export 
delays are crippling for many industries who rely on foreign trade, 
bottle necks at the ports have spared most grocery list items because 
our food is largely produced right here on American soil. As other 
nations' food systems face a major test in the current supply chain 
crunch, it serves as a sober reminder never to take the abundance of 
Americas food supply for granted. Our stable agriculture and food 
system not only guarantees our economic security, but also our national 
security. A population's access to sufficient, safe, and nutritious 
food has been a core state interest since the beginning of civilization 
itself.
    It is important to frame our current supply chain challenges by 
remembering that America is blessed to enjoy the most robust and safest 
food system in the world. We as food industry representatives and 
elected officials must continue to reassure the public and educate our 
constituents about the reliability of our food supply chain to avoid 
the panic buying that marred the industry during the early days of the 
pandemic. It is the panic buying mindset that poses the greatest risk 
to the availability of food, not the challenges that we are here to 
discuss today. I do not mean to downplay our current challenges--we are 
likely stuck with inconsistencies in select product availability and 
moderate food price inflation for the near future. But we can avoid the 
worst scenarios by being responsible spokespeople for America's food 
and agriculture sector. Alarmism can easily spiral into news 
sensationalism or viral social media cycles that influence the buying 
patterns that we seek to avoid. It happened once and it can happen 
again.
    With that being said, the global pandemic has changed the economy 
and the food supply chain is adjusting to deal with the new challenges 
presented by the new economic order. From the independent grocery 
sector's perspective, there are three central factors that are 
contributing most significantly to the current supply chain crunch:

  (1)  Labor Availability--The common theme from all industries 
            represented on this witness panel is that we all suffer 
            from a lack of labor availability. People have left the 
            workforce, perhaps for good. Others left temporarily and 
            still have not come back. More Americans are working from 
            home leading to a culture shift in how consumers shop and 
            what they purchase. The food industry continues to adapt to 
            a shifting marketplace, but the bottom line is that we must 
            have access to a stable workforce in order to adequately 
            meet the demands of American consumers.

  (2)  Freight Capacity Constraints--Shortcomings in America's 
            transportation infrastructure capacity is a driving factor 
            behind supply bottlenecks and delays. Specifically, the 
            trucking industry faces an acute shortage of truck-drivers, 
            a critical cog in the supply chain required to move product 
            along to each step in the food production cycle. America is 
            still short by more than 100,000 truck drivers and the 
            problem is only getting worse.

  (3)  Buyer Power and Supply Chain Concentration--The pandemic has 
            exposed a growing problem in the food and agriculture 
            sector: market concentration is exacerbating product 
            shortages by depriving the market of much needed 
            redundancies and driving unfair distributions of products 
            in short supply. The supply chain crunch has illustrated 
            that capacity cannot easily increase in concentrated 
            markets, so when one firm experiences a shock, everyone 
            suffers. Retail concentration enables dominant retailers to 
            use their immense economic power to pressure suppliers into 
            prioritizing their shipments over other retail customers 
            thus harming independent retailers and their largely rural 
            and urban customer base.

    I will explore each of these concepts in greater detail later in my 
testimony and offer solutions for how Congress and the Federal 
Government can address the mounting supply chain challenges that the 
food sector faces today. I have great confidence that the food industry 
will rise to the occasion and meet these challenges like we always do. 
Our food system is the envy of the world because the industries that 
comprise our sector--from farmers to retail stores--always find a way 
to persevere.
Workforce Challenges in Grocery
    Throughout the pandemic, grocers have faced workforce challenges in 
keeping up with immense operational demands. Responding to historic 
demand from consumers--in addition to implementing of comprehensive 
safety and sanitation measures--has required grocers to scale up the 
workforce significantly. The industry's ability to meet our customers' 
needs would not have been possible without the dedicated and talented 
frontline workers who showed up to work every day to keep store shelves 
stocked. These Supermarket Superheroes, as we call them, served as they 
faced serious challenges, including childcare, transportation, 
interruptions, and health concerns.
    Grocers have done everything in their power to protect their 
workforce throughout the pandemic. As essential frontline workers, NGA 
worked hard to secure personal protective equipment during the onset of 
the pandemic when PPE was in short supply to protect the grocery 
workforce. When vaccines became available, grocers made every effort to 
vaccinate their workforce. Many grocers allowed their workers to take 
paid time off to get vaccinated and to recover if they experienced side 
effects.
    18 months of working on the front-lines of the fight against COVID-
19 has come at great personal cost. To put it bluntly, our workers are 
mentally and physically exhausted. Grocers have stepped up to recognize 
these supermarket superheroes by increasing pay and other benefits to 
their workers. According to NGA survey data, more than 93% of 
independent grocers reported additional pay and bonuses to their 
workers in recognition of their service during the pandemic. NGA was 
disappointed that Congress did not also step up and recognize frontline 
workers for their service to the country in any of the economic rescue 
packages passed in 2020 and early 2021. We continue to believe that 
these individuals are deserving of recognition from their leaders for 
going above and beyond to serve the country in a difficult time. We 
have publicly supported policies such as a payroll and income tax 
holiday for frontline food supply chain workers, such as the 
legislation that Ranking Member Thompson proposed last year, the AG 
CHAIN Act.
    The pandemic's strain on the food industry workforce is driving the 
most significant constraints the food industry faces. Inadequate labor 
availability has become the single greatest challenge to the entire 
food supply chain. As the pandemic has worn on, grocers and wholesalers 
have increasingly struggled to fill open positions throughout grocery 
operations, including warehouse workers, truck drivers, stockers, 
clerks, and the higher-skilled positions around the store perimeter, 
like butchers, chefs, bakers, and deli managers. The labor shortage 
makes it a greater challenge to serve our customers, sometimes leading 
to longer wait times at check-outs and delays in restocking shelves.
    Grocers are fighting tooth and nail to retain and recruit workers 
by taking extraordinary steps to keep staffing at a manageable level. 
NGA survey data finds that 85% of independents are increasing wages and 
making overtime hours available to its workforce. Many are instituting 
one-time signing and referral bonuses for new workers that come on 
staff. Despite these efforts, we still face the most difficult staffing 
environments in memory and the shortfall has a compounding effect. The 
continuous and sustained high levels of consumer demand add pressure to 
the existing workforce. And with most operations being short-staffed, 
existing workers have to work even harder to deal with the labor 
shortfall. Over-extending current staffing is not the answer because it 
leads to burnout, exhaustion, and greater rates of attrition. A common 
theme is that we're seeing an increasing number of grocery storefronts 
adjust for shorter store hours.
    The bottom line is that our workforce is exhausted and our industry 
needs help. As we work to adjust to the new normal in food retailing, 
we need the government's help in attracting talent into the grocery 
workforce. We can offer stable, reliable, good-paying jobs to millions 
of Americans, especially those seeking the enter or re-enter the 
workforce. We have jobs for just about every skill level from clerking, 
to chefs, to IT, to marketing and even top management.
    As Congress and state and local governments consider recalibrating 
workforce development and training programs to match unemployed workers 
into good jobs, NGA is urging policymakers to develop and implement 
vocational training and hiring programs that offer a pathway into the 
grocery industry. These jobs are available in nearly every community 
across the country and can offer new career opportunities. If 
individuals are interested in becoming a chef or mastering the culinary 
arts, grocery stores are often the perfect fit as independents 
differentiate themselves in offering quality pre-made and prepared 
foods. If workers unemployed during the pandemic were inspired by the 
popular Netflix show, The Great British Bake Off, we offer meaningful 
opportunities to talented bakers as well.
    The key to re-staffing the grocery and food sectors is that we need 
to think outside of the box in terms of how we educate and prepare 
workers entering the workforce. We are in a new reality and programs 
must reflect the needs of both workers and employers. NGA applauds 
ongoing bipartisan efforts to tackle the issue of updating workforce 
training programs to offer solutions to help Americans looking to start 
or change careers. We stand prepared to offer our ideas on how to craft 
solutions that will works for the grocery sector, one of the largest 
employers in the country.
    While we strongly support the use of vaccines to stop the spread of 
[COVID-19], we are concerned about the potential unintended 
consequences of the business vaccine mandate that the Occupational 
Safety and Health Administration is expected to release any day now in 
the form of an Emergency Temporary Standard (ETS). If the rule is too 
onerous, particularly for small businesses, it could exacerbate the 
labor and workforce challenges we're experiencing today. The industry 
is already so strained that it cannot sustain another hit to 
employment. We encourage Congress and the Administration to consider 
providing the food sector with flexibility in vaccinating our 
workforce. We hope that any ETS will mitigate any potential disruptions 
to the food supply that would occur should it place a significant 
burden on employers. The last thing we need is a worsening workforce 
crisis as the existing labor force works in overdrive to feed the 
American people.
Trucking Constraints in Food Retail
    America's grocery distribution system relies heavily on motor 
carrier freight transportation capacity and efficiency. Grocery 
wholesalers and self-distributing independent retail grocers employ a 
significant number of truck drivers and require large fleets of tractor 
trailers to ship product from warehouses to grocery store shelves.
    Our industry has been heavily impacted by the ongoing truck driver 
shortage, which has only worsened during the COVID-19 pandemic and the 
current supply chain crunch as trucking capacity is being redirected 
towards alleviating log-jams at the ports. As a result, freight costs 
have increased dramatically since March 2020 with some NGA members 
reporting increases in costs up to five times higher than pre-pandemic 
levels. Higher freight costs translate directly to higher food prices 
in the grocery store checkout as grocers are forced to pass down 
increased costs onto consumers. Increasing freight costs are one of the 
drivers of the current inflationary pressures that we see on retail 
food prices.
    In addition to higher freight costs, NGA members are also 
experiencing much lower in bound service levels of goods than pre-
pandemic norms. Some of our members are reporting aggregate service 
levels as low as 60 percent compared to the high 90s before March of 
2020. A number of retailers and wholesalers are also reporting late 
deliveries that miss critical stocking windows, leaving some shelf-
space empty for longer periods than anticipated.
    To increase transportation efficiency and capacity, NGA recommends 
adoption of policies that would mitigate the ongoing truck driver 
shortage, such as removing the commercial driver's license (CDL) 
restriction on drivers aged 18-20 from transporting across state lines. 
Such a move would expand the labor pool for potential truck drivers and 
provide young adults with well-paying jobs that are currently average 
in the six figures. Currently 49 states allow 18 year olds to obtain a 
CDL, but Federal law prohibits them from interstate delivery. NGA 
supports the Bipartisan Infrastructure Framework's inclusion of the 
DRIVE SAFE Act in the legislation. This measure would ensure that roads 
would continue to remain safe by requiring younger truck drivers to 
complete an apprenticeship program so they have plenty of experience 
behind the wheel before being authorized to drive interstate and long-
haul distances.
    As we continue to experience sustained high levels of consumer 
demand at the grocery checkout counter, non-scheduled and emergency 
delivery of products to grocery loading docks are required to keep 
shelves full. Flexibilities provided by the Federal Motor Carrier 
Safety Administration (FMCSA) such as relief from Hours-of-Service 
requirements has played a critical role over the last 18 months to 
allowing our distributors to keep up with demand. The industry has 
proved that we can maintain a high degree of trucking safety while 
keeping shelves stocked with nutrition and affordable foods. NGA is 
asking the FMCSA to maintain these flexibilities as we see no letup in 
consumer demand.
The Effects of Consolidation and Buyer Power on the Food Supply Chain
    The COVID-19 pandemic has made the grocery supply chain literally a 
kitchen table issue for the American people. While shortages and 
limited availability of critical inputs and supplies affects everyone, 
the impact of these shortages are felt disproportionately by 
independent grocers and smaller players in the market. Inconsistent 
distribution and apparent shortages of consumer goods has made it more 
difficult for customers of independent grocery stores to obtain high-
demand products because we compete against dominant players with 
immense economic power that can wield tremendous influence over their 
suppliers.
    Today 65 percent of grocery shelf-space in America is controlled by 
five grocery retailers. These dominant firms that we call ``power 
buyers'' have taken advantage of supply chain crunches to entrench 
their economic power at the expense of smaller competitors and 
producers. Many independent grocers have struggled throughout the 
pandemic to stock must-have products--such as essentials like paper 
towels and toilet paper, cleaning suppliers, and critical packaged 
foods like canned soup--while large national chains have exercised 
their buyer power to demand on-time, compete orders, and in some cases 
to secure excess supply.\1\ In addition to supply inequities, 
independent grocers are experiencing unprecedented levels of price 
discrimination. Our largest competitors use their influence to maintain 
favorable wholesale pricing as independents experience a retreat of 
promotional trade spending, a critical marketing tool that allows 
independent grocers to compete on price.
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    \1\ https://www.freightwaves.com/news/walmart-tightens-on-time-in-
full-requirements.
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    According to the USDA Economic Research Service, areas with a 
higher share of low-income households, as well as rural areas, tend to 
have more independent food retailers and fewer chain stores.\2\ The 
same study found that stores with a higher share of Supplement 
Nutrition Assistance Program (SNAP) redemptions are more likely to be 
independently owned, particularly in rural areas.\3\ These consumers 
are represented most directly by the House Agriculture Committee whose 
Members overwhelmingly represent rural and low-income districts. 
Therefore, it is your constituents who are the greatest victims of the 
current supply chain crunch and mounting food price inflation.
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    \2\ https://www.ers.usda.gov/webdocs/publications/85783/err-
240.pdf.
    \3\ Id.
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    Rural and low-income consumers must travel longer distances to find 
the products they need at a more crowded large national retailer. In 
rural areas, customers often drive 30 to 50 miles to secure necessary 
household and food products at the larger chains. We also believe that 
these consumers are bearing the greater burden of food price inflation. 
Historically, dominant chains have been able to resist inflationary 
cost increases thanks to their uneven bargaining leverage over 
suppliers. As a result, suppliers are forced to impose higher costs 
onto their smaller customers who have less clout in the market
    A consolidated food marketplace is a system that benefits a select 
few at the expense of everyone else, including consumers, workers, and 
independent retailers and suppliers. The COVID-19 pandemic and supply 
chain crunch has only exposed these underlying weaknesses as consumers 
experience in real time the unequal effects of buyer power and 
consolidation. However, this problem is not new, so it is important to 
examine the history and nature of competition issues in the food and 
grocery sector to help inform our understanding of the supply chain 
issues we are experiencing today.
    According to the U.S. Census Bureau, in the last 25 years, grocery 
storefronts have shrunk by a third. Fifteen of the top 20 grocers in 
the 1980s either merged or were acquired by the 2000s. During this time 
independent grocers lost ground in many rural and urban areas where 
food deserts now exist due in large part to competitive disadvantages 
in the marketplace that favor big box retailers and dollar stores. 
These retail store formats use their size and national reach to 
influence terms of trade in their favor at the expense of independent 
retail competitors. Demands from power buyers impose disadvantageous 
terms, conditions, and prices on independent grocers. This economic 
discrimination reduces the smaller rivals' competitiveness through 
higher costs or reduced product supply or quality, and directly harms 
competition consumers, and the economy. The largest national chains 
have buyer power because of their significant bargaining leverage over 
suppliers. This leverage exists because the national chains are 
critical ``gatekeepers'' between grocery suppliers and consumers, 
controlling a majority of grocery shelf-space in the country. 
Critically, the dependency is asymmetric; the dominant grocery 
retailers are not nearly as dependent on a particular supplier as the 
supplier is on the retailer. This is because a particular grocery 
supplier's products generally represent only a small fraction of a 
grocery retailer's sales, which may encompass tens of thousands of 
products. A dominant retailer often enjoys several branded suppliers 
for a particular product in addition to selling its own, private label 
version. As a result, a dominant retailer has a substantial advantage 
over its suppliers in a negotiation because the risk for the retailer, 
if the supplier refuses its demands an no deal results, is 
substantially smaller than it is for the supplier.
    The paradigmatic example for this one-sided bargaining dynamic is 
Walmart. Its ability to unilaterally demand concessions from suppliers 
is legendary. For example, in 2017, Walmart announced a new requirement 
that suppliers for Walmart stores and Walmart's e-commerce business 
must provide on time and in full deliveries 75 percent of the time. 
Since then, Walmart has repeatedly tightened this requirement, raising 
the bar for on time, in full deliveries from 75 percent to 85 percent 
and then to 87 percent in 2019. In September 2020, while manufacturers 
and suppliers throughout supply chains were struggling to safely meet 
demand during the COVID-19 pandemic, Walmart raised the bar again, 
demanding 98 percent on time, in full deliveries. Walmart penalizes 
suppliers that fail to meet its demands by charging a penalty of three 
percent of the cost of goods sold--a devastating penalty in an industry 
already operating with razor-thin margins.
    Another example that hits close to home if you represent rural and 
low-income areas is how the problem of economic discrimination enables 
the proliferation of dollar stores. We call this brand of economic 
discrimination packaging discrimination (i.e., refusing to provide 
certain package sizes or promotional packaging to certain grocers, 
while providing them to competing retailers). The dollar stores use 
their buyer power to demand ``cheater size'' products, which include 
smaller amounts in a package that can be sold at a lower price. These 
``cheater packs'' create a false impression among consumers that they 
are paying a lower price for the same product they see at independent 
grocers. This provides dollar stores an unfair edge over traditional 
grocery stores who offer a greater assortment of healthy and nutritious 
foods. In fact, it is often the case that dollar stores perform the 
bare minimum depth-of-stock and perishability requirements necessary to 
be authorized for a SNAP license.
    Proliferation of dollar stores throughout rural and urban America 
has not only pushed countless independent grocery stores out of 
business, but they are directly contributing to food desert and healthy 
food access challenges that many Members of this Committee are 
committed to addressing through legislation.
    For decades, these patterns of retail consolidation and increasing 
buyer power has been the driving force for further consolidation 
upstream in the food supply chain. In order for food suppliers to 
compete, they must achieve scale for two reasons: to accommodate the 
vast distribution networks of the largest retailers and to attempt to 
regain bargaining leverage. Food suppliers have responded by 
consolidating at an unprecedented rate. Just in 2019, over 300 food 
industry mergers and acquisitions were recorded.\4\
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    \4\ https://www.foodandpower.net/ownership-control.
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    The spiral of consolidation throughout the food supply chain has 
advanced to the point where just a handful of firms compete to buy 
agriculture products. A lack of competition at the farmgate results in 
unreasonable producer demands and it drives down prices paid to farmers 
and ranchers to anticompetitive lows. But consumers often do not see 
the advantages of those low acquisition costs because the large 
suppliers capture that revenue and price discrimination amongst 
retailers reduces price competition in the retail market.
    Supplier consolidation is directly responsible for a number of the 
supply chain shocks we experienced during the pandemic. Early in the 
pandemic, COVID-19 outbreaks in various meat plants took nearly 40 
percent of meatpacking capacity offline at one point. This resulted in 
skyrocketing meat prices, limited product availability, and farmers and 
ranchers being forced to euthanize livestock due to a lack of buyers in 
the marketplace. This is just one example where supply chain shocks 
could have been avoided if more redundancies were built into the supply 
chain through more robust competition. We also saw huge spikes in price 
and diminished output in other concentrated protein markets such as 
eggs.
    While much of the stocks have been replenished on high-demand 
consumer products like cleaning supplies and many shelf stable good 
categories, the industry continues to see diminished service levels on 
key products. The problem is especially troubling heading into the busy 
holiday season where retailers and wholesalers have already received 
out-of-stock notices on key products, such as canned gravy, frozen 
pies, pastry shells, stuffing, amongst other holiday staples. Other key 
categories impacted by shortages and out-of-stocks include, processed 
meats, deli meats, paper and bath tissue, cookies and crackers, dairy 
and plant-based creamers, yogurt, baby food, and cereal. Some out-of-
stock product availability is due to the lack of shortages in product 
packaging in plastics and aluminum. Although NGA understands that 
shortages and access to key product inputs is impacting everyone 
throughout the food supply chain, and suppliers are doing their utmost 
to meet increased consumer demand, we continue to see evidence that the 
independent grocery segment is being impacted disproportionately 
relative to our chain competition. NGA members too often find full 
shelves and display cases of products that we cannot source when we 
visit our large national chain competitors. Our wholesalers routinely 
see products not available to them by their primary suppliers available 
in large quantities on the ``diverter wire,'' a secondary market for 
excess products.
    Much of the current supply chain challenges and market inequities 
wrought by excess consolidation and buyer power can be addressed 
through more robust competition. The current outcome was not 
inevitable. The antitrust laws were designed to protect against 
anticompetitive economic discrimination. Congress recognized the 
benefits of independent business and the threats posed by economic 
discrimination when it enacted the Robinson-Patman Act in 1936, a law 
designed to foster robust competition and protect against coercion by 
dominant firms. The Robinson-Patman Act reflects Congress' 
determination that discriminatory treatment among competitors is 
pernicious and should be prohibited. But current antitrust enforcement 
efforts have failed to address these anticompetitive harms, and judges 
have inappropriately limited the scope of the law despite clear 
statutory language. Despite Congress' broad goals in 1936, the Federal 
Trade Commission has not brought a case under the Robinson-Patman Act 
in more than 20 years. Nor has the FTC brought an enforcement action 
against economic discrimination using other antitrust.
    That is why NGA is a founding member of a coalition that launched 
last week known as the Main Street Competition Coalition. The coalition 
is comprised of Main Street business groups and agriculture producers 
that are committed to promoting competition and reviving and reforming 
the Robinson-Patman Act. We advocate for antitrust policies that ensure 
a level playing field to benefit both businesses and consumers. The 
coalition is not only concerned about anticompetitive economic 
discrimination in the food sector, but in other industries as well, 
including alcohol, convenience stores, pharmacies, restaurants, and in 
the shipping industry.
    Our goal is to harness the renewed interest in the antitrust reform 
in the Big Tech sector to drive reforms that impact every day Main 
Street businesses. We are urging Congress to consider the views of our 
coalition as part of the conversation around competition challenges 
throughout the economy. We believe strongly that many of the problems 
confronting our economy, including shortages, inflation, and 
disruptions, can be ameliorated by curbing anticompetitive economic 
discrimination and promoting free markets through rigorous enforcement 
of the antitrust laws
Conclusion
    Americans are blessed to live in a country that features the 
safest, most abundant, affordable food supply in the world. The supply 
chain challenges the food sector currently faces is not insurmountable. 
Although we expect some inconveniences and distribution inconsistencies 
to be present in the near future, I have no doubt that American 
ingenuity and the dedication of the patriotic individuals that comprise 
our food sector will prevail over the obstacles and headwinds that we 
face in the marketplace. It will take time to adjust to the new 
economic reality, but targeted interventions from our Federal 
policymakers will help us get back on the right track even quicker. To 
this end, we recommend that Congress consider measures to help industry 
attract workers seeking to enter or re-enter the workforce. We need 
legislative solutions to add much-needed capacity to our nation's 
freight and trucking sector. Finally, we need to rededicate our 
antitrust policies to the benefits that flow from free enterprise and 
fair competition, rather than giving dominant players free reign to set 
terms of trade for everyone else in the marketplace.
    With that, I am happy to take your questions.

    The Chairman. Thank you. Mr. Durkin, please begin when you 
are ready.

         STATEMENT OF MIKE DURKIN, PRESIDENT AND CHIEF 
EXECUTIVE OFFICER, LEPRINO FOODS COMPANY, DENVER, CO; ON BEHALF 
                 OF INTERNATIONAL DAIRY FOODS 
                          ASSOCIATION

    Mr. Durkin. Good morning. Good morning, Chairman Scott, and 
Ranking Member Thompson.
    The Chairman. Good morning.
    Mr. Durkin. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the House Committee on Agriculture. My 
name is Mike Durkin, I am the President and CEO of Leprino 
Foods Company, and I am here to testify on behalf of the dairy 
industry and our company. Leprino Foods is a family-owned and 
privately held company headquartered in Denver, Colorado with 
4,500 employees and nine plants across States of California, 
Colorado, New Mexico, Michigan, Pennsylvania, and New York.
    Leprino is the single largest purchaser of milk in the 
United States, and actually supporting over 1,000 dairy farms. 
We are the world's largest producer of mozzarella cheese, and a 
leading supplier of dairy nutrition products, including lactose 
and whey protein. The supply chain challenges have 
significantly impacted our business, and we don't expect them 
to ease anytime soon. I am here to talk about a critical 
component of this disruption that has not received a lot of 
attention lately, and that is exports. America cannot ignore 
the impact the crisis is having on U.S. exports. Mr. Chairman, 
to use your words, I am here to sound the alarm on the export 
crisis we are experiencing.
    Exports are critical to the overall financial health of the 
entire United States agricultural sector, in our case the U.S. 
dairy industry. Leprino exports 26 percent of our milk 
equivalent volume to over 55 countries, well above the industry 
average of 16 percent. I am here to share our story and call on 
this body to help with solutions across all aspects of the 
supply chain, including exports, because this is a severe 
threat to the U.S. agriculture industry.
    Freight rates from Asia and the U.S. West Coast are 
currently 15 times higher than freight rates from the U.S. to 
Asia, creating a clear financial incentive for ships who depart 
empty, with no U.S. goods on board, versus waiting to be 
loaded. As a result, shipping companies are refusing to load 
U.S. agricultural exports, and over 70 percent of the 
containers are returning to Asia empty. In September, volume 
from the California ports was just \3/4\ of the normal export 
volume. This works for carriers. We have been told it is more 
cost effective to skip the Port of Oakland, one of our primary 
export ports, than to accept exports. U.S. agricultural 
exporters, however, are in a crisis.
    For Leprino, over 99 percent of our 2021 ocean shipments 
have been canceled or rebooked to a later date at least once, 
and in some cases up to ten times or more. Over 100 bookings 
this year have been canceled or rebooked 17 times. This equates 
to a 5 month delay for our customers, who depend on our 
products, including infant formula companies around the world, 
that is necessary to feed millions of babies across the world. 
We have been forced to hold loaded containers in carrier yards 
using equipment already in short supply.
    These delays not only put our customers at risk, but we 
have also experienced unprecedented increases in freight and 
storage and demurrage fees. One freight bill of $5,500 was 
dwarfed by the detention and demurrage fees of over $20,000. In 
total, our freight and storage costs have spiked $25 million in 
2021, and we expect it to increase another $25 million in 2022.
    This export crisis may result in irreparable harm to the 
American agriculture, as customers around the world are 
questioning the U.S. dairy industry's reliability as a 
supplier. For example, one of our largest customers have 
incurred over $\1/2\ million in air freight to get the product 
to where they need, and they also informed us recently that 
they will now source their product from Europe. These 
relationships took years, and even decades, to develop, and 
they will not be quickly or easily regained.
    The U.S. dairy industry cannot stay competitive with 
expensive and unreliable freight costs. And as this cascades 
through the entire supply chain, the loss of foreign sales 
pushes more product into the U.S. market, which pressures 
wholesale prices, and ultimately farm milk prices. There is no 
doubt this is contributing to the extended period of weak dairy 
farm margins. In response, the dairy herd is now contracting at 
its fastest rate since 2009. The bipartisan Ocean Shipping 
Reform Act of 2021 (H.R. 4996) begins to address the problem. 
This bill will prohibit the opportunistic carrier practice of 
sailing to Asia empty when U.S. agriculture exports await 
shipment. It has bipartisan cosponsorship, which is growing, 
and should be passed and signed into law.
    The bill is a great start, but more is needed. For example, 
major ports across the world operate at 24/7, and only recently 
did the U.S. begin to do so temporarily. Given the labor 
shortage and required training, however, this action is 
unlikely to provide any relief for at least 6 to 12 months. In 
addition to prohibiting foreign carriers from leaving the U.S. 
empty, the Administration and Congress must work together to 
provide our major ports and port workers with the 
infrastructure and environment to operate and meet demand. 
Thank you for the opportunity to share the exporter 
perspective. I am happy to answer any questions.
    [The prepared statement of Mr. Durkin follows:]

   Prepared Statement of Mike Durkin, President and Chief Executive 
Officer, Leprino Foods Company, Denver, CO; on Behalf of International 
                        Dairy Foods Association
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the House Committee on Agriculture. My name is Mike Durkin. I am 
President and CEO of Leprino Foods Company and I'm here to testify on 
behalf of the dairy industry and our company. Leprino Foods, a family-
owned and privately held company, is headquartered in Denver, Colorado 
and has over 4,500 employees in the U.S. in six states including 
California, Colorado, New Mexico, Michigan, Pennsylvania, and New York. 
Leprino is the largest purchaser of milk in the United States 
supporting over 1,000 dairy farms. We are the world's largest producer 
of mozzarella cheese, and a leading supplier of dairy nutrition 
products, including lactose and whey.
    The supply chain challenges have significantly impacted our 
business, and we don't expect them to ease anytime soon. I'm here to 
talk about a critical component of this disruption that has not 
received as much attention--exports. America cannot ignore the impact 
this crisis is having on U.S. exports.
    Exports are critical to the overall financial health of the entire 
U.S. agriculture sector, and in our case, the U.S. dairy industry. 
Leprino exports 26% of our milk equivalent volume to over 55 countries, 
well-above the industry average of 16%. I'm here to share our story and 
call on you for solutions across all aspects of the supply chain--
including exports--because this is a threat to U.S. agriculture. The 
West Coast port disruptions of 2015 pale in both magnitude and duration 
when compared to those of the current crisis (see chart).
10/4/21--Los Angeles/Long Beach Congestion: 2015 vs. 2020-21
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: American Shipper/based on data from Marin[e] Exchange 
        of Southern California.

    Freight rates from Asia to the U.S. West Coast are currently 15 
times higher than freight rates from the U.S. to Asia, so there is now 
a clear financial incentive for ships to depart U.S. ports empty--with 
no U.S. goods on-board--versus waiting to be loaded. As a result, 
shipping companies are refusing to load U.S. agricultural exports, and 
over 70% of containers are returning to Asia empty. In September alone, 
volume from California ports was just \3/4\ of normal export volume 
(see chart).
Loaded Outbound TEUs Processed at Major California Ports
(30 Day Months)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: Ports of LA, Long Beach, Oakland.

    This seems to be working well for carriers. We've been told it is 
more cost effective to skip the Port of Oakland (one of our primary 
export ports) than to accept exports, and at least one carrier has 
reported record-breaking financial performance. U.S. agricultural 
exporters, however, are in crisis.
    Here is what Leprino has been facing:

   Over 99% of our 2021 ocean shipments have been canceled and 
        re-booked for a later date at least once, if not twice, and in 
        some cases up to ten times or more.

   Over 100 bookings this year have been canceled and re-booked 
        17 times. This equates to a 5 month delay for customers who 
        depend on our products, including infant formula ingredients 
        necessary to feed millions of babies around the world.

   We have been forced to hold loaded containers in carrier 
        yards, using equipment already in short supply.

    These delays not only put our customers at risk, but we have also 
experienced unprecedented increases in freight, storage, and demurrage 
fees. One freight bill of $5,472 was dwarfed by detention and demurrage 
fees of more than $20,000. In total, these costs have spiked $25 
million in 2021 and we currently anticipate a similar $25 million 
impact in 2022.
    While some believe this issue will resolve itself, this export 
crisis may well result in irreparable harm to American agriculture as 
customers around the world are questioning the U.S. dairy industry's 
reliability as a supplier. For example, one of our biggest nutrition 
customers recently informed us they now source from Europe due to 
shipping delays. These relationships take years to develop and will not 
be quickly or easily regained and the U.S. dairy industry cannot stay 
competitive with expensive and unreliable freight practices in markets 
where we are already fighting for market share because of tariff 
disadvantages.
    These export challenges cascade through the supply chain. The loss 
of foreign sales pushes more product onto the U.S. market, which 
pressures wholesale product prices and ultimately farm milk prices. 
This is no doubt contributing to the extended period of weak dairy farm 
margins (see chart). In response, the dairy herd is now contracting at 
its fastest rate since 2009.
Milk Market Income Over Feed Costs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: USDA.

    The bipartisan Ocean Shipping Reform Act of 2021 begins to address 
the problem. This bill will prohibit the opportunistic carrier practice 
of sailing to Asia empty when U.S. agricultural exports await shipment. 
It has bipartisan cosponsorship which is growing and should be passed 
and signed into law.
    That bill is a good start, but so much more is needed.
    For example, most major ports around the world routinely operate 
24/7. Only recently did the Administration and certain U.S. ports agree 
to begin doing so temporarily. Given labor shortages and required 
training, however, this action is unlikely to provide any relief for at 
least 6 months. In addition to prohibiting foreign carriers from 
leaving the U. S. empty, the Administration and Congress must work 
together to provide all our major ports and port workers with the 
infrastructure and environment to operate and meet demand. That is 
crucial.
    I urge all Members on this Committee to work together to allow U.S. 
agriculture and our exports to thrive.
    Thank you for the opportunity to share the exporter perspective.
    The remainder of this written testimony was prepared by our 
respected industry partner, the International Dairy Foods Association. 
On behalf of the entire U.S. dairy industry, I ask that you consider 
these important additions that reach beyond the scope and time allotted 
for my oral testimony.
    Supply chain issues have become an increasing headwind for food and 
agriculture over the past year and a half. Demand for dairy goods is 
near an all-time high, yet inputs and reliable transportation are 
harder and harder to come by in a timely manner while the labor market 
will likely remain strained for months. Our industry has shown itself 
to be resilient and we will continue to work hard to make sure all 
Americans continue to have access to affordable, nutritious, and 
healthy dairy foods. We are working together as an industry to ensure 
these products remain readily available during periods of rising 
demand, such as the approaching holiday season.
    The International Dairy Foods Association (IDFA) represents the 
nation's dairy manufacturing and marketing industry, which supports 
more than 3.3 million jobs that generate $41.6 billion in direct wages 
and $753 billion in overall economic impact. IDFA's diverse membership 
ranges from multinational organizations to single-plant companies, from 
dairy companies and cooperatives to food retailers and suppliers, all 
on the cutting edge of innovation and sustainable business practices. 
Together, they represent 90 percent of the milk, cheese, ice cream, 
yogurt and cultured products, and dairy ingredients produced and 
marketed in the United States and sold throughout the world. Delicious, 
safe and nutritious, dairy foods offer unparalleled health and consumer 
benefits to people of all ages.
    Our testimony will focus on supply chain challenges facing dairy 
companies, both in terms of our domestic operations as well as the 
problems processors are currently encountering in exporting our 
products overseas.
Farm to Table Supply Chain Challenges for U.S. Dairy
    All members of our industry face similar problems impacting our 
domestic supply chains, including labor shortages, limiting production 
and difficulty moving products all the way through to the consumer, 
along with steadily increasingly costs for procuring inputs for our 
products. Supply chain pressures have persisted for so many months and 
at so many levels that every aspect of the dairy business now is 
impacted, creating a high level of uncertainty from farm to table. In 
our industry, the last thing we want is to be unreliable suppliers to 
our customers which will make us unprofitable and unable to compete 
globally as an industry.
    Unfortunately, the reality of today's supply chain means that 
producing dairy products in the United States has gone from complex to 
difficult, and already thin margins have become razor thin. There are 
pain points at every link in the domestic dairy supply chain impacting 
all parts of the industry. Here are a few examples:

   Equipment and Ingredients: Whether ingredients are imported 
        or domestically produced, prices have increased, and 
        availability has significantly tightened. In some cases, our 
        industry is having to find new supply altogether and ships 
        cannot reliably get terminal appointments to offload imports 
        while trucks sit empty at facilities awaiting drivers to 
        distribute ingredients. Importantly, this is true for equipment 
        and supplies necessary to manufacture, such as protective 
        clothing for employees, not just ingredients.

   Product Manufacturing: As demand has increased for dairy 
        products, many companies have expanded operations and invested 
        in new facilities. However, because of these growing supply 
        chain issues, we cannot find enough workers to fully operate 
        even previously existing facilities, leading to lost shifts or 
        running fewer product lines and making fewer products, which 
        puts greater strain on the entire food system.

   Packaging and Storage: Packaging and storing our products 
        has become difficult as the resins and glues required to seal 
        our packaged goods are in short supply and prices have 
        significantly increased. Even wood pallets, which are used for 
        storing and sorting products for distribution, have doubled or 
        tripled in cost. Our industry is scouring the globe for 
        supplies while prices rise and availability shrinks, further 
        impacting our members' bottom lines.

   Distribution: We're facing a major crisis in transportation: 
        a major truck driver shortage and now the beginning of a truck 
        shortage due to a lack of computer chips. Our members are 
        providing attractive incentives to drivers, but there are only 
        so many truck drivers and they are limited in the number of 
        hours they can drive and the weight they can haul.

   Customers: Our customers expect the same high quality, 
        business reliability, and consistency from our members that 
        they've always known. Dairy companies are working to solve 
        problems behind the scenes to deliver on time, but it's getting 
        increasingly difficult to meet those demands, and due to the 
        problems encountered in manufacturing, processors have fewer 
        products to allocate to customers. In many cases, dairy 
        companies may have contractual obligations to make deliveries, 
        which adds another layer of distress that reverberates through 
        our supply chain.

    There are many other examples that are equally well documented--
such as the increasingly empty shelves at grocery stores, missed milk 
deliveries at schools, or restaurants trimming their menus--but the 
story is consistent and worsening across our supply chain.
    Not even considering foreign markets, the above start-to-finish 
domestic supply chain story is a constant struggle for U.S. dairy and 
agriculture across the board. Altogether, without accounting for 
significantly increased labor costs, procurement prices alone are up 
between 20-30% for most U.S. dairy businesses. This level of inflation 
is neither something processors are willing nor able to pass on to 
consumers nor realistic to maintain a profit margin. In sharing all 
these examples, our goal is to provide each Member of this Committee 
with a clear view of the many challenges dairy processors are 
experiencing. These supply chain issues are severe and eroding our 
ability to compete. Our supply chains are stretched beyond anything we 
have ever experienced, and urgent action is required.
Importance of Trade to the U.S. Dairy Industry
    Considering the current domestic supply chain environment, the 
obvious question might be, why bother trying to export? In the United 
States, approximately 1 day's worth of U.S. milk production each week 
goes to exports, which results in approximately $6.5 billion in U.S. 
dairy products being exported to over 133 countries around the world 
every year. Recent estimates show that the United States now exports 
more dairy production than we consume in fluid milk products at home. 
There has never been a time when trade was more important to the U.S. 
dairy industry than it is today.
    Companies and cooperatives in the U.S. dairy exporting community 
are committed to doing as much as possible with as few resources as 
possible to support our long-term global business relationships and 
maintain our presence in global markets. We recognize that once lost, 
our market share will quickly go to competitors in producing countries 
such as those in Europe or New Zealand and is unlikely to be regained 
given their preferential tariffs compared to ours.
    But the value of trade to U.S. dairy is less in what we have built 
and more in what we are building. Looking ahead, with continually 
rising production, we believe that opportunities to share in global 
markets abound if we can create a supply chain to service them. Given 
the abundant resources and tremendous ingenuity and efficiency of 
American agriculture, USDA predicts an additional 25 billion pounds of 
milk will be produced in the United States by 2030. Based on current 
consumption trends, we would need to export 40% of that increase in 
production for dairy farming and processing to remain economically 
viable. If we do not build our globally competitive market access now 
through reduced tariffs, competitive prices, and consistent shipping, 
our farmers will be unable to grow. There is hardly a more critical 
priority for the U.S. dairy industry than trade.
The Export Challenge
    Unfortunately, international business has now become a significant 
challenge and liability as dairy manufacturers struggle to find ways to 
export products. At any given time in recent weeks, between 70-90 cargo 
ships are anchored outside the ports of Los Angeles and Long Beach, 
waiting to unload thousands of containers. Once unloaded, many of these 
ships are finding it more profitable to turn around and depart for Asia 
empty rather than wait to reload U.S. agricultural exports, resulting 
in a backlog of products waiting to be exported. Industry coalition 
data estimates an average of 22% of U.S. agricultural foreign sales are 
currently unable to be fulfilled due to shipping rates, ships departing 
without export cargo, and other detention/demurrage challenges.
    With supply chain pressures, the U.S. dairy industry is losing its 
global competitiveness as exporters are grasping at any opportunities 
to maintain relationships with buyers and trading partners. As 
previously mentioned, many customers require their suppliers to enter 
into contracts, and many of those contracts include clauses that 
stipulate a product's remaining shelf life after delivery, the length 
of time a supplier may be the supplier of choice for that customer, and 
the expected level of products to be delivered over the course of the 
contract. Unforeseen ripples in the supply chain would be expected and 
manageable under normal circumstances, but when shippers are unable to 
obtain container space for export for multiple weeks or even months, 
many customers rightly evaluate their contracts. Although it's no fault 
of any manufacturer, the current supply chain challenges are not the 
fault of the customers either. Regardless, the liability for each is 
enormous.
    U.S. dairy processors take their sales commitments seriously and as 
such have been evaluating every option to meet the terms of global 
contracts, but the export shipping crisis has made performance 
impossible on a consistent basis. Exporters are begging to borrow 
container space on outbound vessels or are losing money on products due 
to freight surcharges but doing so anyway to preserve a global 
contract. We hear reports of rail cars sitting on sidings for weeks due 
to a lack of other options, while shippers have tried to reroute their 
entire distribution chains to access new ports for export. Air freight 
has become one of the only reliable, albeit extremely costly, delivery 
tools. Additionally, U.S. importers, who have very publicly struggled 
to find import shipping capacity, have started leasing their own 
vessels, which has even further decreased the available carrier supply 
for exports. Surely, we can--and must--find a better, more efficient 
way of servicing global customers.
Brainstorming a Better Way
    Across U.S. dairy we recognize that these problems are complex and 
will likely require a variety of solutions. We also recognize that many 
solutions may not be quick fixes. As a business community, we must 
collaboratively brainstorm with Congress and the Administration to 
develop ways to improve the current situation, share information, and 
ultimately solve these problems. IDFA supports Congress taking the 
following steps to benefit U.S. dairy's supply chain:

   Pass the Ocean Shipping Reform Act of 2021 (H.R. 4996): 
        Congress should pass the Ocean Shipping Reform Act of 2021 
        which would address unreasonable detention and demurrage 
        charges, export cargo bookings, and other carrier practices 
        that are currently hurting U.S. agricultural exporters.

   Pass the Infrastructure Investment and Jobs Act (H.R. 3684): 
        The current bipartisan infrastructure bill includes a provision 
        that would help address the current shortage of commercial 
        truck drivers. Specifically, the bill establishes a pilot 
        apprenticeship program to train 18 to 20 year old qualified 
        commercial driver's license (CDL) drivers to operate vehicles 
        in interstate commerce. Not being able to travel across state 
        lines for drivers in this age range is one of the single 
        biggest obstacles to having enough truck drivers. This is 
        despite the fact that 49 states already allow 18 year olds with 
        a CDL to drive within their borders.

   Increase Truck Weight Limits: Congress should pass 
        legislation to increase the gross vehicle weight limits for 
        trucks that travel on Federal highways from the current 80,000 
        pounds to 91,000 pounds with an additional sixth axle. This 
        configuration complies with the Federal bridge formula and is 
        shown to have better braking capacity than 80,000 lb., five-
        axle trucks. This adjustment would allow manufacturers to 
        transport products more efficiently while also reducing 
        industry's carbon footprint.

    In addition, here are some additional ideas we've been discussing 
within our industry:

   Empty Containers for Exports: Whether seeking additional 
        generalized trade commitments by reopening the World Trade 
        Organization's Trade Facilitation Agreement, or by seeking a 
        structure of financial incentives for filling outbound 
        containers (or disincentives for not doing so), or by 
        establishing a code of practice on filling containers to 
        minimum levels when goods are available, all options need to be 
        considered to resolve the crisis of carriers exporting such 
        high quantities of empty containers when a backlog of 
        agricultural exports are waiting to be shipped. Beyond the 
        economic impacts, this current practice of shipping excessive 
        volumes of empty containers creates unnecessary carbon 
        emissions, as well.

   Provide Supply Chain Transparency: Establish one or more 
        additional advisory committees of industry representatives 
        devoted to shedding light on problems in the supply chain to 
        the Administration on a real-time basis before pain points 
        become crises.

   Discuss Options to Prioritize Perishable Goods: It is not 
        uncommon to give preference to perishable goods in trade 
        scenarios; for example, the U.S.-Mexico-Canada Agreement has 
        provisions built into its Chapter on Sanitary and Phytosanitary 
        Measures that allow for expedited import check procedures for 
        perishable goods. Similar provisions could be applied to 
        loading goods for export.

   Consider Threshold for Emergency Protocol for Servicing 
        Exports/Imports: Following the example of the Jones Act, 
        consider whether emergency situations exist (e.g., food 
        security, national security) which require temporary/
        provisional or permanent authorities that require carriers 
        servicing U.S. ports to prioritize offloading or accepting 
        certain goods for import or export, respectively.

   Designate Responsibility for Supply Chains in USTR: Direct 
        the Office of the U.S. Trade Representative to immediately 
        engage in supply chain matters, both domestically and abroad, 
        which are impacting U.S. agricultural exporters, with a view 
        of, for example, developing improved and enhanced trade 
        facilitation text commitments in the future or monitoring 
        state-owned shipping actions by China.

   Review the U.S. Oversight of the Supply Chain: The Federal 
        Maritime Commission (FMC) has limited authority over ocean 
        vessels and has moved slowly to address some of these 
        challenges. At the same time rumors of new offices or agencies 
        exist. Before changing existing Federal authorities, consider 
        directing the Government Accountability Office (GAO) to 
        determine whether additional authorities, new roles, or less 
        Federal intervention is needed to support the resilience of the 
        U.S. supply chain for U.S. agricultural exporters.
Conclusion
    Chairman Scott, Ranking Member Thompson, and Members, the time for 
solutions is urgently upon us. As a dairy industry, we take pride in 
feeding global communities with nutritious and delicious dairy 
products, but we cannot continue to do so in the current environment. 
We request immediate attention to this significant escalating 
challenge. Here, we have suggested actions that can be taken today to 
address and improve our supply chains and offered longer-term solutions 
that require action by Congress and the Administration. Thank you for 
considering our views as part of today's hearing.

    The Chairman. Thank you, Mr. Durkin. And now, Mr. Samson, 
you are recognized when you are ready.

          STATEMENT OF JON SAMSON, VICE PRESIDENT OF 
      CONFERENCES, EXECUTIVE DIRECTOR, AGRICULTURE & FOOD 
   TRANSPORTERS CONFERENCE, AMERICAN TRUCKING ASSOCIATIONS, 
                         ARLINGTON, VA

    Mr. Samson. Good morning. Thank you, Chairman Scott, 
Ranking Member Thompson, Members of the Committee. To be 
honest, I was very excited to be able to come out and join this 
hearing, and then, after hearing both the Chairman and the 
Ranking Member's opening statements, hearing the passion of 
wanting to actually go in and fix this, talking about crisis, 
but there is also opportunity out there. And so, we are 
engaged, we are excited to be here, but to see the Committee 
jump into this, to see the agriculture side really take away 
from the news cycle of we are going to be short Christmas trees 
and Christmas presents, and actually look at our nation's food, 
fuel, fiber, and feed, and look at that as--this is the real 
important piece of the supply chain that we need to fix. And 
so, the fact that you are raising that right now is 
extraordinarily important, and we are extraordinarily excited 
to be part of the process.
    I am proud to testify on behalf of ATA's Agriculture and 
Food Transporters Conference, the specialty advocacy arm within 
the American Trucking Association dealing with those that are 
hauling our food and agriculture products. ATA members play a 
critically important role in our food supply chain. ATA is an 
80 year old federation, and the largest national trade 
association representing the trucking industry, with affiliates 
in all 50 states, and so we have an arm in each state and work 
closely with our state trucking associations. Our membership 
encompasses over 34,000 motor carriers and suppliers directly 
and through affiliated organizations.
    Importantly, for the purposes of today's hearing, ATA 
members serve agriculture producers, agriculture and food 
processors, food distributors, restaurants, many of my fellow 
panelists here. More than 80 percent of U.S. commodities rely 
exclusively on trucking to meet their freight transportation 
needs. Overall, trucking moves 72.5 percent of the nation's 
freight tonnage annually.
    In March 2020--I think it is important to go back and look 
quickly at the supply chain breakdown that we saw during the 
COVID pandemic, understanding that we face a separate supply 
chain concern right now, but we did--in March 2020, as schools 
and restaurants began to shutter at the onset of the pandemic, 
our food supply chains broke down. The markets disappeared over 
night, restaurants closed, schools closed, and so we worked 
closely within the supply chain, within the industry, as well 
as USDA and FDA, to figure out how we can come together, 
communicate, figure out alternative marketplaces to really get 
everybody back on track.
    We saw, and everybody witnessed, the slaughtering of 
chickens, putting those into the landfill, milk being dumped, 
beans being tilled back into the soil, stuff that we did not 
like to see from a U.S. food supply chain, that food waste, and 
so we worked closely to try to limit that. Communications were 
a big piece of that, you can see that in the written testimony, 
as well as looking at any sort of technology to really allow us 
to contact and tap into other marketplaces. And as we saw 
similar shutdowns in the fall, winter of 2020, we started to 
see some of that food waste minimized, and so we believe that, 
through the communication, we were able to see some positive 
impacts out of that.
    In my full written testimony, we touch on five separate key 
issues for motor carriers in the food supply chain. Of course, 
as we are communicating right now with the bipartisan 
infrastructure, the congestion caused by decaying 
infrastructure is definitely a top focus within ATA. Workforce 
development, I know that is top of mind for many people, the 
labor shortages right now, and Mr. Chairman, you had mentioned 
the driver shortage. I believe our economist looks at the 
number of 80,000 short after the pandemic. And so, these 
retention issues, bringing on new drivers, attracting new 
drivers, has been an extraordinarily difficult task, and 
something that we have been fully involved and focused on, and 
hope to have some positive results within the next couple 
years.
    Vaccine mandate consequences, as we know, there are a lot 
of companies out there that are hesitant, especially when it 
comes to the trucking side within the supply chain, and so we 
have been focusing and working with our companies on the 
vaccine mandate as well. Flexibility and cooperation in 
commercial relationships, this is something, of course, within 
that initial shutdown of COVID, we really needed to make sure 
that our relationships within the industry supply chain were 
strong, and this, I believe, is something that we are going to 
be able to point towards as we go into these new food supply 
chain issues that we are currently witnessing.
    And last, and I know it is going to be talked about 
significantly during this hearing, but the port productivity 
issues that we are facing. Everybody is well aware of them, and 
we are trying, from a carrier angle, to work through the supply 
chain issues, and come out with something that is going to be 
workable for everyone. So, with that, Mr. Chairman, I would 
like to open it up to any questions.
    [The prepared statement of Mr. Samson follows:]

   Prepared Statement of Jon Samson, Vice President of Conferences, 
    Executive Director, Agriculture & Food Transporters Conference, 
             American Trucking Associations, Arlington, VA
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, I am grateful for the opportunity to testify on these 
important issues on behalf of the American Trucking Associations 
(ATA).\1\
---------------------------------------------------------------------------
    \1\ American Trucking Associations is the largest national trade 
association for the trucking industry. Through a federation of 50 
affiliated state trucking associations and industry-related conferences 
and councils, ATA is the voice of the industry America depends on most 
to move our nation's freight. Follow ATA on Twitter or on Facebook. 
Trucking Moves America Forward.
---------------------------------------------------------------------------
    ATA is an 88 year old federation and the largest national trade 
organization representing the trucking industry, with affiliates in all 
50 states. ATA's membership encompasses over 34,000 motor carriers and 
suppliers directly and through affiliated organizations. Our 
association represents every sector of the industry, from Less-than-
Truckload to Truckload, agriculture and livestock transporters to auto 
haulers and movers, and from the large motor carriers to owner-operator 
and mom-and-pop one-truck operations. Those members who work in the 
food supply chain, whether they serve producers, packagers, 
distributors, wholesalers and grocers, or others, have overcome 
tremendous challenges over the past eighteen months and continue to 
adjust as inefficiencies arise in international and domestic supply 
chains.
    Agriculture and food transporters play a critical role in our 
nation's economy. We produce the world's safest and most abundant food 
supply and trucking serves the producers and companies at every point 
in the supply chains to support agricultural production, processing, 
export, and domestic distribution. The trucking industry moves over 70 
percent of the nation's freight tonnage every year, and agriculture and 
food transporters are responsible for transporting the subset of goods 
that, unlike stereos and televisions, are perishable products that 
cannot survive excessive wait times on maritime or warehouse docks.
    Trucks deliver critical foodstuffs to store shelves and school 
lunch tables in every community nationwide. We enable flexible multi-
modal supply chains for agricultural producers and their service 
providers by moving goods the last mile from maritime, rail, air, and 
intermodal facilities. Truck drivers perform an indispensable service, 
and their work moving goods across the country is necessary and 
critical to our economy and way of life.
    As evidenced by the response to the COVID-19 pandemic, and as 
highlighted by the current challenges facing our supply chains, 
trucking is the dynamic linchpin of the U.S. economy. Our industry 
currently moves more than 70 percent of the nation's annual freight 
tonnage.\2\ Over the next decade, trucks will be tasked with moving 2.4 
billion more tons of freight than they do today, and will continue to 
deliver the vast majority of goods to American communities.\3\
---------------------------------------------------------------------------
    \2\ U.S. Census Bureau Commodity Flow Survey, 2017.
    \3\ Freight Transportation Forecast 2020 to 2031. American Trucking 
Associations, 2020.
---------------------------------------------------------------------------
    More than 80 percent of U.S. communities rely exclusively on 
trucking to meet their freight transportation needs. In 2017, trucks 
moved $10.4 trillion worth of goods, 71.6% of the value of all goods 
moved in the U.S.\4\ The trucking industry is also one of the country's 
leading employers, including over 3.6 million drivers.\5\ Overall, 
nearly eight million people are employed in trucking-related 
occupations.\6\ Trucking accounts for one out of every eighteen 
American jobs and ``truck driver'' is the top job in 29 states.\7\
---------------------------------------------------------------------------
    \4\ U.S. Census Bureau Commodity Flow Survey, 2017.
    \5\ American Trucking Trends 2020. American Trucking Associations.
    \6\ Ibid.
    \7\ https://www.marketwatch.com/story/keep-on-truckin-in-a-
majority-of-states-its-the-most-popular-job-2015-02-09.
---------------------------------------------------------------------------
    This hearing presents an opportunity for stakeholders to highlight 
major headwinds for agriculture and food transportation, and to 
consider the opportunities that this Committee and the House of 
Representatives have to ensure the safety, efficiency, and reliability 
of the agriculture supply chain during this ongoing national recovery. 
Deteriorating roads and bridges, severe congestion, freight 
bottlenecks, and unprecedented backlogs of cargo at our U.S. ports and 
inland terminals all reduce the resiliency and efficiency of the 
agricultural supply chain. ATA and its Agriculture and Food 
Transporters Conference are grateful for the opportunity to provide 
insights on these challenges and potential solutions.
    As the Committee examines agricultural supply chain challenges, 
please consider five key areas: (1) infrastructure investment, (2) 
workforce development, (3) potential consequences of an employer-based 
vaccine mandate, (4) the role that commercial flexibility played in the 
initial response to COVID-19 challenges, and (5) challenges created by 
equipment and labor shortages at U.S. maritime ports and inland storage 
facilities and distribution centers. I will address each of these areas 
in detail in my testimony, as they are critical to ensuring the 
economic competitiveness of the American trucking, agriculture, and 
food service industries.
    America's truckers proudly answer the call to deliver necessities 
across the country day and night. They perform that duty whether 
challenged by a global pandemic, dilapidated and failing 
infrastructure, and rising prices and regulatory burdens that make it 
harder for companies to operate their businesses. Thank you for holding 
today's hearing to consider these critical issues. I look forward to 
working with you to share information and inform potential legislative 
solutions to protect the safe and efficient movement of our nation's 
goods.
Key Issues for Food and Agriculture Transportation:
(1) Infrastructure Investment
    With H.R. 3684, the Infrastructure Investment and Jobs Act, pending 
final passage by the U.S. House of Representatives, I strongly 
encourage Committee Members to support its historic investment in our 
nation's roads and bridges. Congress is on the cusp of finally ensuring 
that the roads and bridges that carry the nation's economy are safe, 
reliable, and prepared for future growth.
    No legislation is perfect, but the American Trucking Associations 
strongly supports passage of the IIJA because the costs of inaction are 
too high and because it is our best option at this time. Agriculture 
and food transporters working with perishable products depend on a 
well-maintained, reliable, and efficient network of highways that 
enable the timely and safe delivery of their cargo. Without highways in 
good repair, our nation's agriculture and food producers will struggle 
to get their commodities to domestic and global markets; food 
distributors will struggle to get their goods to store shelves, 
restaurants, and schools; and American families will suffer as a 
result.
    For years, underfunded roads and bridges have increasingly choked 
our economy's supply lines, making it costlier and more time-consuming 
to transport all goods, including agricultural and food products. 
Furthermore, congestion caused by decayed infrastructure adds nearly 
$75 billion to the cost of freight transportation each year.\8\ In 
terms of agriculture and food transport, as the Committee is likely 
aware, the consequences of these losses are far-reaching and extend to 
the need to dispose of expired or unsafe food products such as spoiled 
milk, tilled beans, or slaughtered meat products.
---------------------------------------------------------------------------
    \8\ Cost of Congestion to the Trucking Industry: 2018 Update. 
American Transportation Research Institute, Oct. 2018.
---------------------------------------------------------------------------
    The bipartisan IIJA provides important investments to maintain and 
improve our core interstate system, and targets additional funding for 
intermodal freight connectors and projects of national significance 
that are critical for efficient agriculture supply chains. I echo the 
comments of Chris Spear, the CEO and President of the American Trucking 
Associations, who has spoken to this issue before Congress, the 
industry, and national media: Infrastructure is not partisan, and 
anyone in Congress who believes that roads and bridges are political 
hasn't been driving on them. The time to pass a bipartisan 
infrastructure bill is now.
(2) Workforce Development
    The IIJA does more than invest in those critical aspects of our 
nation's infrastructure. It authorizes critical programs and lays a 
path to ensure a highly trained, safe, and diverse workforce is 
available to truck goods across the country. According to statistics 
released just last week, the trucking industry is currently short 
80,000 drivers.\9\ That deficit will only continue to grow without 
studying and modernizing regulations on who can drive in interstate 
commerce, and without targeted investments in programs to attract a 
new, diverse generation of drivers and supply chain workers. By 2030 
and at current trends, the gap could grow to 160,000.\10\ Overall, 
nearly one million new drivers will need to be trained and hired in the 
next decade to keep pace with increasing consumer demand and an aging 
workforce.\11\
---------------------------------------------------------------------------
    \9\ Driver Shortage Update 2021. American Trucking Associations. 
October 25, 2021.
    \10\ Ibid.
    \11\ Ibid.
---------------------------------------------------------------------------
    The truck driver shortage is only one aspect of how unmet labor 
force needs create supply chain inefficiencies. Drivers working at 
maritime ports or transporting goods between domestic distribution 
facilities all rely on local labor forces to load or unload perishable 
cargoes so that trucking companies can keep their assets moving in 
service of their customers and so that drivers can maximize their on-
duty time under Federal hours of service regulations. The staffing 
shortages for these workers substantially decreases driver efficiency 
if they also have to wait for loading and unloading.
    Accordingly, ATA and the members of our Agriculture and Food 
Transporters Conference strongly support the workforce development 
provisions in IIJA that will help ensure a resilient, safe, and diverse 
workforce. In particular I want to highlight the importance of the 
pilot program (based on the DRIVE Safe Act, H.R. 1745) to study 
allowing highly trained younger drivers to participate in interstate 
commerce, the establishment of an advisory board to promote the 
recruitment and retention of women in the trucking workforce (Promoting 
Women in Trucking Workforce Act, H.R. 1341), and the authorization of a 
program to promote and improve job opportunities for a diverse 
transportation workforce (Promoting Service in Transportation Act, H.R. 
3310).
    The DRIVE Safe Act pilot program will allow the U.S. Department of 
Transportation to collect the data to show what 49 states already 
recognize, that 18 to 20 year olds can be trained to operate safely in 
interstate commerce and help meet the critical need for 80,000 new 
truck drivers nationwide. This pilot program will remove an obsolete 
Federal regulatory barrier for up to 3,000 drivers, and will 
demonstrate that young drivers can be trained in trucks equipped with 
the latest safety technology and deployed to add critically needed 
resilience and capacity to national supply chains. To qualify to 
operate in interstate commerce under the pilot program, drivers must 
complete 400 hours of training using leading safety equipment, 
including 240 hours with an experienced mentor, on top of the current 
minimum requirements to obtain a commercial driver's license for 
drivers of all ages. For agriculture and food transporters, the 
capacity that can be unlocked by bringing safe, trained younger drivers 
into the workforce is critically important to ensure the resilience of 
the supply chains on which they depend.
    The Promoting Women in Trucking Workforce Act and the Promoting 
Service in Transportation Act are also important tools for our nation's 
supply chains to attract a younger and more diverse workforce. Although 
women currently make up 47% of the workforce, only 7% of truck drivers 
are women \12\ and only roughly 26% of all transportation and 
warehousing jobs are held by women.\13\ For too long, blue-collar 
professions like trucking have been stigmatized, and the 
disproportionate emphasis on 4 year colleges at the expense of 
vocational schools and the skilled trades has discouraged too many 
potential drivers from getting behind the wheel. ATA supports both of 
these important legislative efforts and applauds their inclusion in the 
IIJA.
---------------------------------------------------------------------------
    \12\ American Trucking Trends 2020. American Trucking Associations.
    \13\ Monthly Employment in the Transportation and Warehousing 
Sector. USDOT Bureau of Transportation Statistics. September 2021.
---------------------------------------------------------------------------
    Agriculture producers, processors, and distributors have seen the 
consequences of an undersized and less resilient workforce as they 
struggled to meet surging demand and adjust to constant challenges over 
the past 2 years. The inclusion of these workforce provisions will play 
a key role in bolstering the transportation industry and helping it 
attract and retain a new generation of labor that will ensure its 
ability to respond to future food supply chain disruptions. ATA 
strongly encourages the Committee to be aware of the importance of 
these workforce provisions in the pending infrastructure bill to the 
reliability of the agriculture and food transportation.
(3) Vaccine Mandate
    The challenges facing our food supply chains are rooted in 
inefficiencies that are out of the control of truckers--potholes, 
closed bridges, congestion, and prohibitions on younger drivers--but 
those challenges impact everyone in the highly competitive trucking 
industry equally. As the Committee studies the challenges facing the 
food supply chain, ATA respectfully requests consideration of the 
negative consequences that an employer-based Federal vaccine mandate 
will have on the resilience and sustainability of the supply chain.
    As mentioned above, there are labor shortages causing 
inefficiencies at ports, inland warehouses, and distribution 
facilities. America's trucking industry is built on a deregulated model 
with hundreds of thousands of licensed motor carriers of all sizes. 
Setting an arbitrary threshold for vaccine mandates based on company 
size puts the companies above that threshold at a disadvantage where 
their drivers and workers can simply leave for jobs at companies where 
they will not be subject to a mandate. Trucking workforce data gathered 
by ATA indicates that an employer-based vaccination mandate based on 
the arbitrary threshold of 100 employees could mean the loss of up to 
37% of drivers for covered companies to retirements, attrition to 
smaller carriers, or conversion to independent contractor owner-
operators. Federal regulations should not play favorites among 
competitive industries but this proposal does exactly that.
    ATA strongly supports efforts to provide access to vaccination and 
COVID-19 testing broadly throughout the country. Our members working in 
the supply chain play a major role in ensuring distribution of vaccines 
and medicines nationwide. More broadly, agriculture and food 
transporters ensure that the institutions and families across the 
country have access to necessities despite the ongoing challenges to 
daily life--milk, eggs, bread, produce, and the COVID-19 vaccine 
itself. Truckers in fleets of all sizes play a role in meeting that 
demand and transporting the goods we all need.
    As of the drafting of this testimony, the Occupational Safety and 
Health Administration's (OSHA) COVID-19 Emergency Temporary Standard 
(ETS) had just cleared the Office of Management and Budget's review. 
While this Committee considers ways to support resiliency in food and 
agricultural supply chains, ATA requests that Members be aware of the 
following necessary provisions that ATA explained to the Administration 
need to be included:

  (1)  An exemption for truck drivers akin to that provided by Canada 
            for its drivers or alternatively deferring coverage of 
            truck drivers to the traditional regulating agency with 
            transportation expertise--the Federal Motor Carrier Safety 
            Administration (FMCSA)--rather than OSHA;

  (2)  Federal contractors that implement the vaccine mandate required 
            in Executive Order 14042 should not have to comply with a 
            second set of OSHA rules--those that implement the E.O. 
            14042 mandate should be deemed compliant with the OSHA ETS 
            and ideally vice versa to avoid overlapping and 
            contradictory requirements; and

  (3)  A reasonable implementation timeline for any ETS of not less 
            than 90 days.

    While much of the country was sequestered in their homes over the 
past eighteen months, the trucking industry served its essential 
function and did so successfully with safety standards developed by 
public health experts. In fact, ATA surveyed its members and provided 
data to the Administration showing that our drivers were well below the 
infection and mortality rates of the general population. We support the 
Administration's goals of increased vaccination rates and clear health 
guidelines to enhance protections for all Americans. We have urged 
trucking industry employees to get vaccinated and will continue to do 
so. We will also continue to work with Federal authorities to increase 
voluntary vaccination rates for our sector.
    Unfortunately, however, the anticipated OSHA rule as outlined 
together with the Federal contractor vaccination mandate may have vast 
unintended consequences. The scope of the mandate was an open question 
as of the drafting of this testimony, but the Committee should know 
that if the ultimately-published ETS and Federal contractor 
requirements do not take into account the effects on our industry, ATA 
may be forced to take action against the ETS and contractor mandate to 
protect the industry. Because of its potential one-size-fits-all 
approach, such a rule would inherently fail to balance the risks of a 
single standard for all industries against the broad impact that such a 
rule will have in exacerbating challenges to the supply chain and 
economy. Even if the ultimate goal is something we all agree on--
increasing vaccination protections and defeating the COVID-19 
pandemic--it is vital that public health measures first do no harm, 
especially to critical elements of our food supply chain.
(4) Supply Chain Adjustments in Response to COVID
    The landscape-level challenges that face the entire trucking 
industry place unique challenges before the food and agriculture 
haulers. As I mentioned, these companies were at the forefront of 
helping their shipper customers adjust to an economy where the entire 
marketplace of mass food distribution disappeared almost overnight. 
Shippers and carriers were forced to find new homes for their products, 
and ATA worked closely with supply chain partners and regulators to 
accommodate those changes while minimizing waste and disruption.
    By focusing on improving communication between supply chain 
partners outside their contractual obligations and addressing the 
ability to repackage from a large-market focus to the consumer level, 
the food supply chain evolved to meet the unique demands of the COVID-
19 pandemic. Supply chain horror stories of dumping tankers of expired 
milk, containers of harvested products left to rot, and disposing of 
thousands of slaughtered animals that went unprocessed in a timely 
manner all illustrate the consequences of inefficiency and highlight 
the need for the private-sector and regulators to strengthen the 
resiliency of supply chains to meet future challenges.
    As shippers' traditional marketplaces collapsed they were left 
scrambling to find other consumers for their products. This immediate 
shift exposed the initial lack of connectivity among partners in the 
supply chain when faced with the dramatic changes wrought by the 
pandemic. However, by bringing together technology providers, logistics 
companies, shippers, government agencies, and charitable organizations, 
supply chains were cooperatively able to piece together short-term 
solutions to minimize disruptions.
    We witnessed schools and restaurants shutter overnight, and many 
food distributors were left with commercially packaged foodstuffs. The 
market took a few days, but started to repackage those goods for 
consumer purchase. Many restaurants turned into ``bodega-like'' 
operations selling packages of uncooked goods to customers who 
ordinarily would have been sit-down restaurant customers. Produce 
trucks parked in parking lots also sold their perishable products 
directly to consumers.
    A common thread in the discussions between supply chain partners is 
that there is no one silver bullet to ensuring resilient food and 
agriculture supply chains. The improved level of communication made 
necessary by COVID-19 response efforts must continue, and unique 
solutions must be found to workforce challenges facing our respective 
industries supply chains struggle to provide necessary capacity to meet 
consumer demand. America's agriculture community produces the world's 
safest and most abundant food supply, and our motor carriers remain 
dedicated to playing their role in bringing those goods to market.
(5) Port Productivity Challenges
    As media and policymakers focus on the backlog of import cargo at 
U.S. maritime ports, particularly on the West Coast, it is an 
opportunity to examine the long-term trends in port practices that 
reduce the resilience of food supply chains. Volumes are surging at a 
time when labor and equipment shortages leave inland distributors 
unable to accommodate the demand. Inabilities to process cargo at 
ports, dray import and export containers between ports and inland 
distribution facilities, and transport inland goods efficiently between 
production facilities and warehouses all create challenges for our food 
supply chain.
    The entire food supply chain would benefit from steps to 
incentivize communication between supply chain partners, realign 
financial incentives by modernizing regulations related to detention 
and demurrage charges by ocean carriers and marine terminal operators, 
and address the chassis and equipment shortage.
Improving Communication
    Private-sector partners need to continue improving their 
communication to avoid supply chain breakdowns, even in the face of 
peak season demands, a lack of carrier capacity, a lack of equipment 
availability, and ongoing labor supply challenges. In that context, 
Congress and Federal regulators must understand the context of the 
current and potential bottlenecks in order to respond accordingly with 
effective and meaningful relief. For instance, a port remaining open 
24/7 will do little to increase the flexibility of the supply chain if 
the port does not have adequate equipment available to move containers, 
they are slow to process the trucks that serve the facilities, inland 
warehouses are full, or if inland warehouses are only staffed to open 
their shipping docks for limited hours. Solutions should focus on 
addressing the constraints specific to those port facilities, not 
merely increasing the amount of time a driver can legally operate in 
order to overcome the inefficiencies.
    In addition to the delays and limited hours of operation at inland 
facilities complicating the carriage of goods to and from ports, the 
ports themselves struggle with disjointed information sharing. ATA 
members working in intermodal freight, as well as those transporting 
agriculture and food, report that information systems and notifications 
vary substantially between facilities. Each terminal within a larger 
port often has its own information sharing system, an inefficient state 
of affairs for truck drivers and supply chain participants that would 
otherwise benefit from more global availability of information. 
Truckers working at ports often must return containers or chassis at 
one terminal then pick up new equipment at a different terminal, and 
most terminals operate on different systems. Miscommunication is often 
exacerbated by short notice of constantly-changing windows of 
availability for cargo and equipment pickup and drop-off at each 
terminal.
Modernizing Incentives at Ports
    The Federal Maritime Commission has studied the issue of unjust and 
unreasonable practices relating to detention and demurrage penalty 
charges levied on carriers and shippers by ocean carriers and marine 
terminal operators. Fines intended to incentivize the efficient 
movement of goods to and from U.S. ports are, obviously, failing to do 
so. Rather, motor carriers and food shippers working at ports are too 
often forced to pay unfair penalties and then weigh the risks of 
pursuing litigation or arbitration with large, global shipping lines to 
recover their losses.
    Too often, the delays for pickup and return of equipment and cargo 
for the movement of food and agriculture goods at ports are due to 
circumstances beyond motor carriers' control. Part of the challenge is 
in obtaining the necessary equipment, particularly chassis, to move 
containers to warehouses. Another aspect of the challenge is that labor 
shortages at those inland facilities slow the loading and unloading of 
goods. Federal hours of service regulations do not account for or 
accommodate labor challenges, so the time a driver spends waiting on a 
chassis to move goods from the port, or missing the delivery window at 
an inland facility because of delays at the port is unrecoverable. 
Drivers and equipment are critical resources for the overall food 
supply chain, and effective utilization of both is critical to 
alleviate the current port backlog.
    The answer to these myriad challenges is not increasing the amount 
of time a driver can be on-duty, but rather restoring financial 
incentives for ocean carriers and marine terminal operators to work 
with shippers and carriers to move goods efficiently. These entities 
should not benefit from unreasonable demurrage charges when cargo is 
not made available to carriers and shippers in a timely manner, and 
they should not be able to levy unfair charges for the late return of 
containers when there is no space for the carrier or shipper to return 
the equipment.
    If drivers are unable to return a container and obtain the proper 
chassis, they cannot pick up their next container, slowing operations 
and contributing to the buildup of containers at the port. In addition 
to improving port information sharing and restoring fairness to the 
financial incentives for moving cargo, there is a critical need to 
incentivize better chassis management and to secure more chassis and 
equipment to move more containers at ports.
Equipment Availability
    There is virtually zero availability of chassis, which is a 
critical chokepoint for U.S. ports at this time. Trucking companies and 
intermodal equipment providers that purchase this equipment rely on 
both domestic and foreign suppliers. Recent trade actions, including 
Section 301 tariffs imposed during the Trump Administration and an 
antidumping and countervailing duty ruling from the Department of 
Commerce and the U.S. International Trade Commission (USITC) earlier 
this year, limit chassis availability from global sources. ATA is 
concerned that the combination of the tariffs and duties only increases 
the cost of chassis without providing a sizeable increase in domestic 
production to meet the demands of the U.S. intermodal marketplace. 
Without increased chassis availability, the carriers serving our food 
supply chain will continue to struggle to meet consumer demand in an 
efficient and timely manner.
    A lack of interoperability for chassis in certain locations further 
strains the motor carriers and shippers moving food and agricultural 
products through our ports. Many ocean carriers require motor carriers 
to use chassis from their preferred intermodal equipment provider in 
order to pick up a container from that shipping line. This is true even 
for merchant haulage where the shipper contracts with the motor carrier 
for land transportation rather than with the ocean carrier. This could 
require a motor carrier to return one chassis and pick up another one 
just to pick up a container from a specific ocean shipping line. This 
inefficient system that allows ocean carriers to sideline competition 
also prevents motor carriers from choosing their own chassis provider, 
adding time and expense that is eventually passed on to consumers.
    Finally, the supply chain challenges that make it harder to move 
agriculture and food products efficiently are manifesting in an 
inability to receive new trucks and the necessary parts to maintain 
fleets. Making it harder to keep trucks that are already operating on 
the road places the economy at risk of an even greater capacity 
shortage. Semiconductor shortages are slowing delivery of new equipment 
because OEM companies are being forced to idle plants as they wait to 
build up sufficient stock to produce trucks. Fleets are cannibalizing 
older equipment to keep their assets moving as best they can. These 
shortages will continue to challenge those companies working in the 
food supply chain, and we encourage the Members of this Committee to 
consider these industry concerns.
Conclusion
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you again for the opportunity to testify before the 
Committee at a moment where significant challenges face our nation's 
agricultural and food product supply chains. The members of the 
American Trucking Associations are working ceaselessly to move goods 
across this country, and on their behalf I am grateful for the 
opportunity to present you with insights on steps that can be taken to 
help the industry.
    The entire ATA federation stands ready to work hand-in-hand with 
you, Congress, and the Biden Administration to address the issues we 
are discussing today. Thank you.

    The Chairman. Yes. Thank you, Mr. Samson. And now I 
recognize Mr. Wells. Please begin when you are ready.

 STATEMENT OF ROD WELLS, CHIEF SUPPLY CHAIN OFFICER, GROWMARK, 
                 INC.; CHAIRMAN OF THE BOARD, 
      AGRICULTURAL RETAILERS ASSOCIATION, BLOOMINGTON, IL

    Mr. Wells. Thank you. Good morning, Chairman Scott, Ranking 
Member Thompson, and distinguished Members of the House 
Committee on Agriculture. Thank you for allowing me to testify 
today regarding the immediate challenges to our nation's food 
supply chain. My name is Rod Wells, and I serve as the Chief 
Supply Chain Officer of GROWMARK, Incorporated, headquartered 
in Bloomington, Illinois. GROWMARK is a North American ag 
cooperative owned by local member companies and farmers, and 
provides grain supplies, farm supplies, and grain marketing 
services. I also appear before you today on behalf of the 
Agricultural Retailers Association, as the Chairman of the ARA 
Board of Directors. ARA represents agricultural retailers, who 
supply farmers and ranchers with crop inputs, feed, equipment, 
technology, and services that help to successfully manage their 
operations.
    The agriculture industry is experiencing supply chain 
disruptions. We must act on both short-term and long-term 
solutions and utilize a multi-pronged approach to mitigate 
these disruptions. The importance of improving our 
infrastructure, crop input production, energy availability, 
access to labor, and regulations that work for rural America is 
very clear now. Rural America's transportation infrastructure 
needs improvement. Rural America contains many of the country's 
natural resources, and is the primary producer of food, fiber, 
and energy. Roads, bridges, highways, and waterways provide the 
first and last links in the supply chain from farm to market 
for all citizens in our country. We compete in a global 
marketplace, and our infrastructure must be world-class and 
efficient.
    In short, ensuring an economically strong supply chain 
infrastructure is critical to the health of the U.S. economy. 
Waterways, ports on our coasts, and freight railroads are safe 
and effective means of transporting commodities. Freight 
railroads need to make track improvements to be in the best 
position to deliver consistent, dependable service, while also 
providing competitive rail rates to shippers. Our waterways 
need new 1,200 locks, and more ports need to be capable of 
offloading containers. Our growing supply chain challenges 
pinpoint an immediate need for waterway, port, and rail track 
upgrades to connect ag retailers and their customers to 
domestic and international markets.
    Trucking is vital to agriculture, and we depend on just-in-
time delivery of farm supplies and services to our customers. 
Our country is experiencing a growing driver shortage, and 
higher shipping costs. 48 states currently allow drivers to 
obtain a commercial driver's license at 18, however, they are 
prohibited from driving in interstate commerce until they are 
21. The DRIVE-SAFE Act (H.R. 1745), legislation we support, 
would create a two-step apprenticeship program to allow these 
younger drivers to safely enter the industry. Hours of service 
regulation should allow more flexibility for drivers working 
within the food supply production system, along with 
streamlining electronic logging device requirements that can be 
a burden for small trucking companies.
    Planning for the 2022 growing season is already underway. 
Seed and crop protection products all rely on the supply chain 
being discussed today. We feel part of improving the supply 
chain involves the timely and science-based regulatory approval 
process for biotechnology and crop protection products. The Ag 
Retailers Association supports biotechnology and crop 
protection products being assessed within the traditional U.S. 
EPA science- and risk-based regulatory process. American 
farmers and ranchers become more sustainable and strengthen the 
food supply system long-term with science-based enhancements.
    Reliable, diverse, and cost-effective energy sources are 
essential for agricultural production and supply chain system. 
Agricultural producers produce renewable fuels that include 
ethanol, biodiesel, solar, wind, and gas from digesters. But 
until renewable energy can meet all demand, traditional 
domestic energy sources must be available.
    The Census shows rural America continues to struggle to 
grow its population, while the demand for qualified workers 
increases. The current H-2A ag guestworker visa program is 
broken and does not work for all of agriculture. We desire an 
H-2A program that is simpler and more flexible.
    The Ag Retailers Association urges Congress to continue to 
explore solutions that improve the supply chain, and also 
promote pro-growth economic policies. As a farm supply 
retailer, I am confident that acting on these priorities will 
help farmers improve production, and contribute to growing the 
economy, while supplying the food, fuel, and fiber that our 
citizens need. Thank you for your commitment to, and support 
of, American agriculture, and I look forward to your questions.
    [The prepared statement of Mr. Wells follows:]

Prepared Statement of Rod Wells, Chief Supply Chain Officer, GROWMARK, 
   Inc.; Chairman of the Board, Agricultural Retailers Association, 
                            Bloomington, IL
Introduction
    Good morning, Chairman Scott, Ranking Member Thompson, and 
distinguished Members of the House Committee on Agriculture. Thank you 
for allowing me to testify today regarding ``The Immediate Challenges 
to our Nation's Food Supply Chain.''
    My name is Rod Wells and I serve as Chief Supply Chain Officer for 
GROWMARK, Inc. headquartered in Bloomington, Illinois. GROWMARK is a 
North American agricultural cooperative serving local ag and energy 
cooperatives, farmers, retailers, and businesses in the U.S. and 
Canada.
    I also appear before you today on behalf of the Agricultural 
Retailers Association (ARA) as the Chairman of the ARA Board of 
Directors. ARA represents agricultural retailers who supply farmers and 
ranchers with products and services. These products include seed, 
nutrients, crop protection products, feed, equipment, and technology. 
Retailers also provide consultative services such as crop scouting, 
soil testing, field mapping, custom planting and application, and the 
development of nutrient management and conservation plans.
    Agricultural retailers range in size from small, family-held 
businesses to large companies and farmer-owned cooperatives with many 
outlet stores. Large and small retail facilities are scattered 
throughout all 50 states and provide critical goods and services, as 
well as jobs and economic opportunities in rural and suburban 
communities.
    The agriculture industry is experiencing supply chain disruptions. 
While there is no easy fix, any solutions require a multi-pronged 
approach including, but not limited to, addressing issues of 
infrastructure, crop input production and regulation, energy, labor, 
and pro-growth economic policies.
Infrastructure
    Rural Roads & Bridges--Rural America's transportation 
infrastructure needs serious investment. Home to 60 million people and 
playing a vital role in the U.S. economy, rural America contains much 
of the country's natural resources, and is the primary source of food, 
fiber, and energy. Roads, bridges, highways, and waterways provide the 
first and last links in the supply chain from farm to market.
    The roads and bridges that serve and connect our country's rural 
areas face significant challenges. Inadequate capacity to handle 
growing levels of traffic and commerce, limited connectivity, the 
inability to adequately accommodate growing freight travel, and 
deteriorating road and bridge conditions top the list. The nation's 
rural roads and bridges have significant deficiencies due to 
underfunding: 15 percent of the nation's major rural roads have 
pavement rated in poor condition, 21 percent rated in mediocre 
condition and ten percent of rural bridges rated structurally 
deficient.
    Railroads--Freight railroads are a safe and effective means of 
transporting bulk commodities and ensuring an economically strong rail 
network is critical to the health of the U.S. economy. Freight rail is 
a vital link that connects thousands of U.S. manufacturers, 
agricultural distributors, retailers, farmers, and energy producers 
with consumers. Freight railroads need to make track improvements to be 
in the best position to deliver consistent, dependable service while 
also providing competitive rail rates to shippers. Modernizing the 
Surface Transportation Board (STB) regulations will ensure that the 
freight railway system works better for both the railroads and 
America's shippers that rely on them.
    The nation's 603 short line and regional railroads operate 29 
percent of the nation's freight rail network. In four states, short 
lines operate 100 percent of freight rail, and in 36 states they 
operate more than 25 percent. For large areas of rural and small-town 
America, short lines offer the sole method for shippers to connect to 
the national rail system, helping businesses and employment stay local. 
The Short Line ``45G'' Rehabilitation Tax Credit, first enacted by 
Congress in 2005 and made permanent in December of 2020 as part of the 
Consolidated Appropriations Act, has allowed short lines to privately 
invest over $5 billion since its inception. Providing incentives for 
these types of rail infrastructure investments is good public policy. 
ARA believes similar financial incentives such as tax credits or grants 
should be made available to agribusinesses that own private industrial 
spur lines or trackage used to load and unload railcars at their 
facilities.
    Ports and Inland Waterways--Many of the agricultural products, 
including essential crop inputs used to produce a sustainable food 
supply and the production of America's farmers and ranchers, utilize 
our country's many ports. Whether these products originate in America 
or arrive from other countries, they are an essential part of supply 
chain resiliency. Recently, Gene Seroka, executive director of the Port 
of Los Angeles, testified before the U.S. House of Representatives' 
Transportation & Infrastructure's Coast Guard and Maritime 
Transportation Subcommittee on the port congestion issues stating, ``we 
must revisit a national strategy that targets infrastructure investment 
and supply chain performance to key industrial sectors of our economy. 
Such a strategy should focus on exports of American products, but also 
on procurement of essential goods for American businesses and 
consumers. For example, we must reverse the impact that retaliatory 
tariffs have had on our agricultural exporters. We must enhance their 
connectivity to major trade gateways through infrastructure investment 
and leverage digital solutions that make it easier for them to marshal 
the equipment necessary to reach foreign markets.''
    As often reported on the national news, there has been a serious 
port backlog since earlier this year. Now more than ever it is 
important for the Federal Maritime Commission (FMC) to act. FMC should 
leverage its authority to limit the impact of rising demurrage and 
detention costs to shippers and, eventually, consumers. We ask Congress 
to review legislation such as the bipartisan ``Ocean Shipping Reform 
Act'' (H.R. 4996) to address practices that are currently damaging U.S. 
agricultural exports.
    Additionally, America's inland waterways system provides the 
lowest-cost, most fuel-efficient and environmentally friendly method to 
transport products. Exports of agricultural goods make up 20 percent of 
farm income and support more than one million jobs. In 2017, 70 percent 
of U.S. agricultural exports, valued at $90.5 billion, traveled by 
water. And every $1 billion in U.S. exports shipped through ports 
supports 15,000 U.S. jobs.
    The system of locks and dams that facilitate this transport 
urgently needs extensive maintenance and modernization. Most were built 
in the 1920s and 1930s and have far exceeded their 50 year design 
lifespan. In 2017, 49 percent of barge vessels experienced delays, up 
from 35 percent in 2010. These delays cost nearly $45 million annually 
and adversely affect the price farmers pay for their inputs and earn 
for their commodities.
    The inland waterways system currently benefits from a successful 
public-private partnership. Commercial users help pay for inland 
waterway construction and rehabilitation through a 29 per gallon 
diesel fuel tax paid into the Inland Waterways Trust Fund (IWTF). Under 
the Water Resources Development Act of 2020, the IWTF funds 35 percent 
of the cost of these projects while 65 percent is funded through the 
Treasury.
    However, we need additional investment to keep commerce flowing on 
our inland waterways. GROWMARK and ARA support prioritizing increased 
funding to complete the 17 Congressionally authorized inland waterways 
navigation projects. In addition, a continued focus to ensure that 
Harbor Maintenance Trust Fund dollars go towards their intended purpose 
of dredging will also help to boost American competitiveness and 
improve supply chain resiliency.
    Rural Broadband--Broadband access is vital to rural economic 
development, education, precision agriculture data transfer, health 
care, and public safety activities. According to the Federal 
Communications Commission's (FCC) latest broadband deployment report, 
14.5 million Americans lack internet connectivity. However, a Broadband 
Now study released in February 2020 estimates that as many as 42 
million Americans do not have the ability to purchase broadband 
internet. An FCC report from 2017 estimates it would cost $80 billion 
to bring high-speed internet to the remaining parts of our country that 
do not have access. Broadband connectivity links farmers and ranchers 
to today's online markets. Without connectivity, rural communities can 
be cut off from domestic and international supply chains. Given the 
high number of communities that lack internet services, digital 
connectivity is a direct need for supply chain resilience.
Crop Input Production and Regulation
    Today, Americans have access to one of the safest, most diverse, 
and most affordable food supplies in history. This is thanks in large 
part to the efficiency, productivity, and innovation of U.S. 
agriculture enabled by agricultural crop protection products, 
fertilizers, seed protections, and biotechnology products. These 
products are approved for use within the United States' robust science- 
and risk-based regulatory system.
    Agricultural retailers employ commercial pesticide applicators that 
receive extensive education and training to apply pesticide products in 
accordance with laws and regulations under the Federal Insecticide, 
Fungicide and Rodenticide Act (FIFRA). EPA has financially supported 
training of certified commercial applicators through state grants. The 
programs generally cover Best Management Practices (BMPs) for safe 
pesticide use as well as environmental issues like endangered species 
and water quality protection. Thousands of agricultural retailers and 
their commercial applicators have raised their professional status by 
also participating in voluntary programs such as the Certified Crop 
Advisor (CCA) program administered by the American Society of Agronomy. 
Our industry is licensed and extensively trained to store, handle, and 
apply Restricted Use Pesticide (RUP) products.
    For healthy and productive growth of nutritious food, plants also 
require essential nutrients. Fertilizers and bio stimulants serve as a 
supplement to the natural supply of soil nutrients, build up soil 
fertility to help satisfy the demands of crop production, and 
compensate for the nutrients removed by harvested crops. Higher crop 
yields are well documented with better crop and soil management. 
Adopting nutrient stewardship contributes to the preservation of 
natural ecosystems by growing more on less land with fewer inputs.
    U.S. agriculture remains the leader in plant breeding innovation 
due to clear, predictable, and science- and risk-based regulations. 
Plant breeders continue to strive to provide solutions to new and 
emerging challenges facing farmers, consumers, and the environment. Ag 
biotechnology such as genetically modified organisms (GMOs) and gene 
editing can help increase global food security. New innovations in 
plant breeding provide benefits such as reducing CO2 
emissions, dramatically increasing crop productivity, providing more 
food to remote communities, reducing input load, and decreasing food 
waste.
    GROWMARK also strongly supports a science- and risk-based 
regulatory system which fosters innovation, values the environmental 
benefits that biotechnology enables agriculture to achieve, and 
recognizes the long and safe track record of plant and animal breeding 
along with overwhelming evidence of the safe use of genetic engineered 
plants and animals. By protecting existing and emergent technologies 
that enhance production, American farmers and ranchers become more 
sustainable and strengthen the food supply long-term.
    The Agricultural Retailers Association is concerned by recent 
actions taken by the U.S. Environmental Protection Agency (EPA) to 
revoke all tolerances for the insecticide chlorpyrifos. We believe the 
actions by EPA are inconsistent with Federal statutes, the agency's own 
extensive record on chlorpyrifos, and sound, science-based and risk-
based regulatory practices. This action by EPA will cause significant 
harm to the food and agricultural industries and directly impact supply 
chains. Other examples of disruptions to the marketplace include the 
U.S. Court of Appeals for the 9th Circuit ruling issued in June 2020 
that canceled the registration of three dicamba herbicides for over-
the-top usage in registered crops. The Federal court decision was 
delivered in the middle of application season, well after seed and 
pesticide product selection decisions were made by American cotton and 
soybean farmers. If EPA had not allowed for these products continued 
use during the 2020 growing season under their long-standing ``Existing 
Stocks'' policies, there may not have been enough alternative products 
available for agricultural retailers or their farmer customers. 
Congress and EPA need to protect the agency's policy on ``Existing 
Stocks'' of pesticide products if there are future cancellations to 
prevent severe disruptions in the marketplace.
    We are concerned with the onslaught of lawsuits filed by anti-
pesticide, non-governmental organizations (NGOs), especially in the 9th 
Circuit, in an effort to secure bans on pesticide products that are 
safe, essential tools used by the industry. A perfect example relates 
to glyphosate, a widely used herbicide that controls broadleaf weeds 
and grasses. It has been registered as a pesticide in the U.S. since 
1974, reviewed and reassessed as safe, and not considered to cause 
cancer (Source: Revised Glyphosate Issue Paper: Evaluation of 
Carcinogenic Potential, EPA's Office of Pesticide Programs, December 
12, 2017). NGOs seek the Federal courts, who have no scientific 
expertise, to impose their decisions over the conclusions of career EPA 
scientists and peer-reviewed scientific data.
    We are concerned with potential future actions by EPA to ban other 
essential crop protection products that will significantly harm crop 
production as there will not be readily available alternative and 
effective replacement products. This scenario may result in food 
shortages and increased prices for American consumers.
Energy
    GROWMARK and ARA also support Federal policies that increase 
domestic energy production, resulting in reduced costs for crop input 
materials manufactured in the U.S. Our nation must remain energy 
independent by including oil, natural gas, and other domestic energy 
supplies, such as renewable fuels like ethanol and biodiesel, in our 
efforts to promote economic growth in the nation's ag sector and reduce 
U.S. dependence on foreign sources of energy. Overall, we support an 
``all of the above'' energy strategy and believe this approach is 
necessary to support a resilient food supply chain.
    According to a recent study conducted by Environmental Health & 
Engineering, Inc., ethanol reduces gasoline's greenhouse gas emissions 
by 46 percent. Additionally, by 2022, USDA anticipates that corn 
ethanol's relative carbon benefits could reach up to 70 percent thanks 
to continued innovation in the ethanol process.
    ARA issued a commissioned study in October 2020 entitled, 
``Economic Impacts to U.S. Biofuels, Agriculture, and the Economy from 
Subsidized Electric Vehicle Penetration.'' The study examined three 
scenarios for electric vehicle (EV) market penetration through 2050 and 
their potential impacts on biofuels consumption, the agricultural 
sector, and the greater economy. The three scenarios include:

  1.  Base Case: EV market penetration increases to 13 percent of 
            light-duty vehicle sales by 2050, following Annual Energy 
            Outlook Reference Case projections.

  2.  ICE Ban by 2050: EV market share reaches 100 percent of light-
            duty and freight vehicle sales by 2050 due to a ban on 
            internal combustion engines (ICE).

  3.  ICE Ban by 2035: EV market share reaches 100 percent of light-
            duty vehicle sales by 2035 and 100 percent freight vehicle 
            sales by 2040 due to a ban on internal combustion engines.

    These scenarios were selected to present a full range of possible 
impacts across the biofuels value chain and supporting supply chains. 
The biofuels value chain includes farm seed, fertilizer, and other 
inputs required for crop production, maintenance, harvesting, 
intermediate transportation, and biofuels manufacturing. The ICE Ban by 
2050 and ICE Ban by 2035 scenarios were designed to represent scenarios 
where non-market policy factors, including a potential ban on the sale 
of vehicles with an internal combustion engine, could require EV 
adoption. Relative to the Base Case, this study found that in 2050:

   U.S. light-duty and freight vehicle consumption of ethanol 
        and biodiesel could decline up to 90 percent to 1.1 billion 
        gallons and up to 61 percent to 0.8 billion gallons, 
        respectively

   Corn and soybean consumption decrease by up to 2.0 billion 
        bushels and up to 470 million bushels, respectively.

   Corn prices fall up to 50 percent to $1.74 per bushel.

   Soybean prices fall up to 44 percent to $4.92 per bushel.

   U.S. Net Farm Income decreases by up to $27 billion.

   U.S. GDP declines by up to $26.4 billion, resulting in 
        cumulative GDP losses of up to $321 billion.

   U.S. job losses could reach up to 255,300 in the year 2050.

    These studies demonstrate that biofuels, like ethanol and 
biodiesel, must continue to be critical pieces of a low-carbon economy. 
According to the U.S. Energy Information Administration (EIA) biodiesel 
is considered to be carbon-neutral because the plants (soybeans) that 
are the source of the feedstock for making the renewable fuel absorb 
carbon dioxide (CO2) as they grow (Source: https://
www.eia.gov/energyexplained/biofuels/biodiesel-and-the-
environment.php). All forms of domestically produced energy should be 
fully utilized to develop and promote low-carbon emission vehicles as 
it will help keep energy, manufacturing, food, and fuel costs low for 
American consumers and ensure economic prosperity for America's 
domestic industries. For these reasons, we oppose efforts to ban the 
internal combustion engine as it would have an adverse impact on the 
U.S. agricultural industry and rural communities.
Labor
    The agricultural community is dependent on a sustainable workforce 
now more than ever. Every farm worker engaged in high-value labor 
intensive crop and livestock production sustains an average of two to 
three off-farm jobs. With the added burden of a global pandemic, 
employers and employees are strained even further.
    The current H-2A ag guestworker visa program is broken and only 
available for part of the agricultural industry. Additionally, 
agriculture needs the H-2A program to be more flexible as it currently 
requires the cooperation of multiple Federal agencies which can 
complicate the program.
    We support the use of vaccines to fight the spread of COVID-19 but 
are concerned with the issuance of an Emergency Temporary Standard by 
OSHA for businesses with 100+ employees as it has the potential to 
create even larger labor shortages within our industry. Agricultural 
retailers currently struggle to find workers for existing job openings. 
Federal policies should provide flexibility for agribusinesses to 
address this issue through increased educational outreach efforts and 
other programs to increase the number of vaccinated workers.
    Our economy is expanding quickly in response to the post COVID-19 
business openings. Supply chains for consumer, industrial, and 
agriculture businesses need to move more products in a short amount of 
time and in higher volumes to keep pace with demand. Trucking demand is 
outpacing the supply of available drivers. As noted above, road 
infrastructure is important and truck deliveries are critical to keep 
supplies on our retail shelves, raw materials to manufacturers, and 
agriculture productive. A practical proposal with immediate results 
would be to increase weight limits for trucks on roads to 88,000 pounds 
from June 30-November 1 across the nation. Resupplying America would 
boost the economy by ensuring raw materials and finished goods are in 
the right place for purchase during this period of high demand.
    Allowing higher payloads to resupply America's supply chains is the 
right policy to consider because it would increase efficiency, reduce 
costs, and lower emissions with fewer trucks in a short amount of time. 
The increased weight on the roads would occur before most areas have 
significant freezing and thawing. Increased inventory would be 
available to consumers, easing price increases and providing inputs for 
manufacturing and agriculture.
    Seventy percent of the nation's freight is carried by commercial 
trucks, yet as our economy strengthens, motor carriers have difficulty 
sourcing the drivers they need to handle growing capacity. According to 
a recent estimate by the American Trucking Associations issued October 
25, 2021, the nation needs an additional 80,000 truck drivers 
immediately--a shortage that is expected to surpass more than 160,000 
by 2030. In many supply chains, companies are being forced to increase 
prices to account for higher transportation costs. This will ultimately 
result in higher prices for consumers on everything from electronics to 
food.
    While 48 states currently allow drivers to obtain a commercial 
driver's license at 18, they are prohibited from driving in interstate 
commerce until they are 21. The DRIVE-Safe Act, legislation we support, 
would create a two-step apprenticeship program to allow these younger 
drivers to enter the industry safely. Candidates would be accompanied 
in the cab by experienced drivers for a total of 400 hours of on-duty 
time with at least 240 hours of driving time. Trucks would be required 
to be outfitted with the latest safety technology including active 
braking collision mitigation systems, forward-facing event recording 
cameras, speed limiters set at 65 miles per hour or less and automatic 
or automatic manual transmissions.
    The Farm-Related Restricted Commercial Driver's License (CDL), or 
more commonly referred to as the ``Seasonal Ag CDL'' program, has been 
an essential seasonal program for farm-related service industries since 
1992. These industries have historically had a very strong 
transportation safety record and it has not been diminished since these 
Federal regulations have been in place. The Seasonal Ag CDL program has 
helped promote economic growth for America's agricultural industries 
serving the essential needs of farmers during the busy planting and 
harvesting seasons. Due to challenging weather events, the increase in 
crop production diversification, technological advances, and weight 
increases in light duty pickup trucks and agricultural equipment over 
the past several decades, it is necessary to modernize the Federal 
regulations providing the framework for these state-administered 
programs. The temporary shutdown of the state department of motor 
vehicles offices throughout the nation during the height of the [COVID-
19] pandemic also caused major disruptions for farm-related service 
industries and their rural communities.
    Please support modernizing the Farm-Related Restricted CDL program 
with the following reforms:

   Provide more flexibility by expanding the total days allowed 
        to utilize Farm-Related Restricted CDL drivers up to 270 days 
        to accommodate for the longer seasons, which can fluctuate from 
        year to year due to climate change as well as more diversified 
        crop production. The state would maintain the ability to set 
        the seasonal periods these days could be utilized by the 
        industry.

   Ensure the new 12 month seasons restart each calendar year 
        on January 1 to prevent any overlap of seasons from the 
        previous year.

   Ensure Farm-Related Restricted CDL drivers can also operate 
        Class A commercial vehicles in recognition of the advances and 
        changes made to light duty pickup trucks, agricultural 
        equipment, and trailers over the past 30 years.

   Eliminate the requirement for in-person seasonal renewal of 
        the Farm-Related Restricted CDL

    There is a strong need for long-term modifications to this program 
to ensure economic growth for our industries and their rural 
communities while continuing to maintain a strong transportation safety 
record. This essential seasonal CDL program is currently authorized in 
24 states. The surface transportation reauthorization bill offers an 
opportunity to enact needed reforms that can help provide necessary 
transportation flexibility for farm-related service industries and 
ensure there are no disruptions to America's agricultural production 
and the supply chain.
    The Hours of Service (HOS) agricultural operation exemption has 
been vital for our industry to ensure ``just in time'' delivery of farm 
supplies and other essential products and services to farm and ranch 
customers. The electronic logging device (ELD) requirements highlighted 
issues with the existing HOS regulations and the need to modernize the 
agricultural exemption. While it has had the largest impact on the 
livestock industry, there has also been an impact on farm supply 
transporters and smaller trucking operations. To addresses these 
issues, ARA requests support of legislation eliminating the HOS ag 
exemption's planting and harvesting season provision. Over 30 states 
already have a year-round ``planting and harvesting season'' 
designation. Eliminating this provision ensures the HOS ag exemption is 
year-round for all states, promoting regulatory consistency and 
alleviating unnecessary regulatory burdens highlighted by the ELD 
mandate. We also request support for expanding the current air mile 
radius of 150 air miles up to 200 air miles for farm supply 
transporters following an FMCSA pilot program to collect safety data to 
address continued industry consolidation and driver shortages.
    These regulatory changes will help our nation's freight continue to 
move while preserving the safety of our highway system.
Pro-Growth Economic Policies
    The Agricultural Retailers Association sees a need to support and 
advocate for pro-growth economic policies that will aid our members by 
developing a more business-friendly marketplace in which to operate. 
There are several barriers to entry within the American tax code we 
would like to see changed to protect our freedom and license to 
operate. These pro-growth policies will also positively impact our 
nation's food supply chain and its resiliency.
    Protecting current tax provisions is also paramount in promoting 
growth. The estate tax has long been a detriment to our member's 
business and, as such, we support its full repeal.
    ARA also supports a workable sale and use tax collection system to 
shield retailers and farmers from burdensome tax compliance 
requirements and we continue to advocate for efforts to streamline 
these requirements.
    ARA recently signed onto a letter to Congressional leadership 
regarding the need to preserve several tax provisions that would 
support new and multi-generational farm operations, thus ensuring a 
robust and dependable food supply chain. The letter noted that with 
more than 370 million acres expected to change hands in the next 2 
decades, tax policies will determine agricultural producers' ability to 
secure affordable land to start or expand their operations. Highlighted 
were three critically important tax provisions:

   Stepped-Up Basis: Assets in agriculture are typically held 
        by one owner for several decades, so resetting the basis on the 
        value of the land, buildings, and livestock on the date of the 
        owner's death under a step-up in basis is important for 
        surviving family members and business partners to ensure the 
        future financial stability of the operation.

   Like-Kind Exchanges: This provision allows businesses to buy 
        and sell like assets without tax consequences, thus helping 
        farmers and ranchers, who are typically ``land rich and cash 
        poor,'' maintain cash flow and reinvest in their businesses.

   Sec. 199A Business Income Deduction: In order to maintain a 
        reasonable level of taxation for pass-through businesses, like 
        farms and ranches, it is critical to preserve Section 199A 
        business income deduction.

    We also support a consistent corporate tax structure and oppose 
changes to the current corporate tax structure. These provisions are 
fundamental to the financial health of production agriculture and the 
businesses that supply its inputs, transport its products, and market 
its commodities.
    ARA strongly advocates for the free and fair trade of agricultural 
products, equipment, and crop inputs that are essential to food supply 
chain resiliency. We believe this will create opportunities for 
economic benefit for farmers, ranchers, retailers, and other members of 
the supply chain. ARA members and their farmer customers purchase crop 
inputs from both domestic and international manufacturers. While ARA 
strongly supports the domestic crop input manufacturing industry, and 
policies that will make them more efficient and competitive globally, 
our primary interest lies in achieving competitive sources of products 
with which our retailer and distributor members can best serve their 
growers.
    We have consistently supported reducing both domestic and 
international trade barriers. The agriculture industry is heavily 
weather dependent; thus, to ensure a strong U.S. food supply, farmers 
require large volumes of agriculture inputs during tight time spans 
during the planting and harvest seasons. Hence, it is necessary for the 
U.S. agriculture industry to have a strong and steady supply of crop 
protection products and fertilizers available to ensure adequate supply 
and to avoid wild price swings in the market. Our policy position 
supporting fair and free trade of agricultural products is a top 
priority that includes foreign and domestic manufacturers alike and 
treats imports and exports equally.
Conclusion
    In closing, any long-term solutions crafted to address the 
challenging disruptions to the food supply chain we face will only be 
found through the continued partnership between the agricultural 
retailer, their farmer customers, and regulating authorities.
    America's farmers are among the most resilient people on the 
planet, and they should be commended for their hard work and dedication 
to feeding a growing world population. As a farm supply retailer, I am 
confident that mitigating supply chain disruptions in our industry and 
working to lessen regulatory burdens that hinder production, will 
significantly contribute to a burgeoning economy.
    Thank you for your continued commitment to supporting America's 
agriculture industry and I look forward to your questions.

    The Chairman. Thank you, Mr. Wells, and I want to thank 
each of you for your very informative testimonies, and I just 
appreciate your sense of urgency and understanding of what we 
are doing. Our job here today is to keep our food supply chain 
operative and functioning at the level that we really, really 
need. And so, let me begin the questions.
    I will tell you this, I am very, very worried. I am worried 
that we could possibly have a major delay in our food supply 
chain if we do not address this pressing issue of a need for 
commercial truck drivers. It is an extraordinary profession, 
and we are now pulling the covers off all of that to really--I 
have magnified my deep appreciation for truck drivers. They 
hold the key right now as to whether or not we will have a food 
supply challenge and shortage. We do not have a food shortage, 
but the supply is in the hands of our truck drivers.
    So, I just want to stress to you the urgency that I feel 
about this, because as Chairman of the Agriculture Committee, 
first and foremost, our number one priority is to make sure our 
people are eating, that our schoolchildren are getting their 
meals. But I am hearing from our school boards, you all know 
the story, the food may be there, but the utensils, something 
like the forks and spoons--you mentioned something about the 
type of paper and packaging that our meat processors have. All 
of this is coming from places like China, and that is why I am 
saying this is such an important issue here.
    And so, let me start with you, Mr. Samson. You are with the 
Trucking Association, correct?
    Mr. Samson. Correct.
    The Chairman. All right. We have a two-pronged problem 
here. Number one--and it has come out, 15,000 driver vacancies 
right now, but I have just heard that number is up to 80,000. 
And then on top of that, I am informed that our truck drivers' 
careers last less than a year for 90 percent of them. If this 
isn't a barnburner of a crisis waiting to happen--and our 
failure to address it properly could be detrimental to our 
nation, and the world, because we supply food. And as you can 
see, in Los Angeles, in Long Beach, 40 percent--those ports in 
California bring in 40 percent of our trade, and our 
commodities.
    One of the other things I found out about this, as I am 
getting into it, and this is a danger, but we will put this on 
the back burner for now, but we are too dependent on China for 
some very basics. Deere Tractor, I talked to them, they depend 
on China for some of their equipment that they can't get. That 
delays it. So, I just want to stress the importance of this 
hearing, and I am moving--as I said, as we speak now, my staff 
is meeting with the committee staffs of the Transportation and 
Infrastructure Committee, the Education and Labor Committee, 
and, of course, our Agriculture Committee, and Secretary 
Vilsack is already moving on this. We have a little something 
in the infrastructure bill that is a pilot for some of the 
things I am talking about.
    But share with me this answer--this question. What is it 
that is causing this, because if we go get these drivers, and 
don't address the fact that 90 percent of them don't last a 
year--please tell us why that is happening, and what we must do 
to fix it so that, as we recruit new drivers, we are also 
moving simultaneously to address those issues of retaining 
those drivers. And that is why I call this movement that we are 
making jointly with the Agriculture Committee, and then we 
bring in those departments as well--because the Labor 
Department is going to have to be key to help us get out there, 
and identify some of these drivers that may have quit that we 
can identify, that have the license already, that we have a 
need here, and could come and help us in our need.
    So, I want to just bring those to you, and I want us to 
leave here with an understanding that we are not going to let 
this happen any way, any shape, to have a delay in our food 
supply system. Why is it that we can't keep these drivers a 
year, 90 percent of them?
    Mr. Samson. I guess I will start with the driver shortage 
issue. Of course, this is something that was pre-pandemic, 
something that has been a systemic problem in trucking for 
years, and the COVID pandemic just exacerbated the issue, and 
that is why we saw an uptick, I believe, from about 55,000 
short to 80,000 short. What we are doing within the industry, 
we are trying to increase pay, of course, increase incentives, 
increase flexibility. Of course, the over the road truck driver 
could be a taxing position to have. We have a lot of 
competition as well within other industries. The truck driver 
is a great--a fantastic career, but then, all of a sudden, if 
they need to stay home, or stay closer to family, then they 
will go to an alternative construction, or other job in a 
similar career path, as they would be for a truck driver.
    And so, from a trucking industry, we are looking at, of 
course, the DRIVE-SAFE Act (H.R. 1745). We are looking at 
recruiting younger drivers right now. We miss that 18 to 20 
year old recruitment. We can't go to high schools, we can't go 
to the Future Farmers of America, and recruit them as an 
original career. And so, if they come in at 21 or 25, they have 
probably already had a career, and so if we are able to get to 
them, educate them on the industry, maybe they buy in a little 
bit more as we are moving forward, and build a career out of 
that, as opposed to an alternative career. And so, there are a 
lot of things going on, both military, women in trucking, urban 
as well, and that is kind of been our focus, but retainment has 
definitely been a big issue.
    The Chairman. Yes. Thank you very much. And now I recognize 
the gentleman from Georgia, Mr. Austin Scott, for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and I 
appreciate you having this meeting. I am going to focus on Mr. 
Schwalls from Colquitt County, my district, with a few 
questions.
    I think a lot has been said here, but I do want to point 
out, in my part of Georgia, Mr. Chairman, in southwest 
Georgia's economic region, the unemployment rate is 2.8 
percent, and that includes Colquitt County. And in Tift County, 
which is just to the east of Mr. Schwalls's district, it is 2.3 
percent.
    And one of the things that we do have a problem with, and 
the reason the unemployment rate is so low, which is a good 
thing, but the labor participation rate is also down, and that 
is a bad thing, and so I do think that the Federal Government 
has made some of these issues worse with some of the enhanced 
unemployment benefits, and other things that have been paid 
out. And I do hope that since those enhanced unemployment 
benefits have stopped that the labor force participation rate 
will move back to a more normal level. But did I understand 
you, Mr. Schwalls, to say that your price of fuel is up 48 
percent?
    Mr. Schwalls. Yes, sir.
    Mr. Austin Scott of Georgia. Is that since January of this 
year?
    Mr. Schwalls. Yes, sir, that is what we are experiencing 
currently.
    Mr. Austin Scott of Georgia. So, it is costing Americans 
more to get to the grocery store, as well as costing Americans 
to get out of the grocery store, and certainly the increased 
cost of fuel and transportation increases the cost of 
everything.
    One of my concerns in talking with the farmers back home is 
products that we have always been able to get--you don't use it 
a whole lot in--or I should say you wouldn't use as much as a 
cotton grower, I don't think, but Roundup, for example. The 
farmers that I know are being told that they need to go ahead 
and make their purchases for next year this year if they want 
the chemicals. You spoke to it a little bit, but could you 
speak more to the crop protection products, and their 
availability? And one of the things I want to point out to the 
people that may be watching this that are not in ag production 
is farmers have a window of time in which they have to apply--
whether it is a pesticide, or a fertilizer, or some other type 
of chemical, you have windows in which you have to do 
everything from plant the seed, to fertilize the crop, to put 
the crop protection products there. Can you speak to that 
supply chain issue, and the potential damage to the supply of 
food for the American citizens?
    Mr. Schwalls. Yes, sir, thank you. I think Mr. Cinco 
alluded earlier, he was talking about the hardship of trying to 
secure the products which you need for manufacturing on their 
side, of course from us, from a production side. It was very 
difficult and very hard on our business to try to secure 
products earlier in the year, as we were not using those 
products for, obviously, a great deal of time for crop being 
made in the spring, and then through the summer and the fall, 
but we were trying to secure those products to ensure that we 
would have crop protection products.
    People in the crop protection product business were telling 
me, back as early as February, that there would be strains on 
the supply chain. So, as we started trying to secure that, and 
then, of course, we saw price increases coming after that. As 
you mentioned a while ago, biphosphate, Roundup, for example, 
is basically non-existent at this point. Many of these 
chemicals that we are looking for: fungicides, bactericides, 
those sort of things are getting harder and harder to find, and 
it is becoming a longer and a longer period of time even if you 
can find it. So, you have the issue of the crop protection 
products being a lot more expensive, not being readily 
available, and now it is getting to the point where they are 
not available at all, or certainly not in the time period of 
which to be able to make a crop.
    So that is going to be an incredible strain--it is an 
incredible strain that is going to continue to get worse, it 
appears, the strain on being able to secure these products in 
order for us to be able to produce the crops. So, obviously, 
the less protection products we have, the less yields we are 
going to have, and crop failures, and that is going to tax the 
American farm, but also the American food supply chain.
    Mr. Austin Scott of Georgia. Thank you for that answer. 
And, Mr. Chairman, I am almost out of time, but I am--look, 
when I go to the grocery store in Tifton, Georgia, there are 
many times that I come home without the yogurts that my kids 
want to eat, and I know what the impact of the price increases 
has done to my family, and I certainly know that it is hurt a 
lot of people very bad in this country. And so, I appreciate 
you having this hearing, and I look forward to working with you 
to help solve the problems.
    The Chairman. Thank you very much, Congressman Scott. And 
now I recognize the gentleman from California, Mr. Costa, who 
is also the Chairman of the Subcommittee on Livestock and 
Foreign Agriculture. You are recognized for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman. Mr. Durkin, 
in your testimony you talked about the importance at Leprino 
Foods, that export 26 percent of their products. In California, 
the number one agricultural state in the union, we export 44 
percent of our agricultural products. Clearly, when you talked 
about an example that you may lose some market share as a 
result of this supply chain crunch, there is no guarantee you 
are going to get that customer back, right?
    Mr. Durkin. Absolutely. As I mentioned earlier, this took 
decades of relationship building and--over time. We have no 
idea whether we will be able to regain that customer, and our 
hope is over time we will. The ability to be able to do that, 
though, means that we need to be competitive. In order to be 
competitive, we need to make sure that we have shipping rates 
and prices that we can, obviously, go to our customer----
    Mr. Costa. That is a good segue, because you also 
referenced the importance of the bipartisan Ocean Shipping and 
Reform Act of 2021 (H.R. 4996) that I have been working with my 
colleagues on, and Representative Garamendi. And I think that 
we need to look at this effort, this crisis that we are in, and 
certainly we saw underlying tones of it when restaurants and 
schools were closed last spring because of the pandemic. When 
you take a complicated, complex food supply chain and you turn 
it upside down, the disruptions can occur.
    And the--now, one of the factors that--we have talked about 
multiple factors that are causing the supply chain crunch that 
we are dealing with, but also demand by American consumers for 
products as this economy is beginning to come back. I mean, the 
60 to 70 container ships that we see at Long Beach and Los 
Angeles Port, they are telling me that--I mean, this is in part 
because of the pent-up demand as a result of the pandemic and 
other factors, and the economy growing.
    To you, and to the other witnesses, I think we need to look 
at this in short-term and long-term solutions. Certainly, the 
issue in the short-term efforts, the 24/7 operations with Long 
Beach and L.A. is a positive, but I think we ought to do that 
with Oakland, don't you think? And we ought to do that with 
some of other ports and harbors during this crisis. The 
infrastructure package, that deals more with long-term efforts 
to increase our capacity in those areas. On the Ocean Shipping 
and Reform Act, do you put that in the long-term, or the short-
term? We would like to get that passed this year so the 
Maritime Commission can deal with these containers that are 
going back empty.
    Mr. Durkin. That would be a short-term, absolutely.
    Mr. Costa. Right.
    Mr. Durkin. But we need to get it passed immediately.
    Mr. Costa. Yes. And the task force that the President has 
set up is helpful with the different disciplines, DOT, USDA, 
the Trade Representatives. Chairman Scott talked about the 
efforts to reach out with the corresponding efforts of the 
other three committees that have jurisdiction in this area. I 
think we have to be working together in a collaborative effort 
to list both short-term and long-term solutions, and we have to 
do it at the same time. Any of the other witnesses, Mr. Durkin 
and others, have advice to give us on how we orchestrate that?
    Mr. Samson. Congressman Costa, good to see you. I would say 
that agency-wide we are working very closely with both USDA, 
DOT, and I think having the committees of jurisdiction working 
as closely would be extraordinarily helpful. I think, when you 
are looking at the L.A./Long Beach port system and the 24/7, we 
are running into bottleneck issues. As you continue down the 
process, we are running into equipment/chassis issues, we are 
running into driver issues----
    Mr. Costa. And we have had those for a number of years, and 
we are devising rail corridors that will help, but that is the 
longer-term infrastructure package that will update our 
capacity.
    Mr. Samson. I think you are looking at communication 
problems. I think the ship line has one goal, of offloading and 
then heading out. I think the port itself has another goal, the 
carrier has another goal, and the warehouse has another goal. 
And I think, unless you have the communication throughout that 
entire supply chain, and everybody on the same page, I think we 
are going to continue to see those issues. But I think, to your 
point----
    Mr. Costa. And our products that are coming in and going 
out. Mr. Durkin, you and I discussed about the perishable 
nature, and they are not all the same.
    Mr. Durkin. They are not all the same, Representative 
Thompson [Costa], yes, absolutely, and you have concerns on 
this. We will be able to get the product that--out of date in a 
certain period of time, and obviously our customers are waiting 
for that, and if they miss a window on that, it is an issue 
that we have and they have.
    Mr. Costa. Would any other witnesses care to comment? My 
time is expiring here, Mr. Chairman, but I think that when you 
hit on the collaboration of the other corresponding 
jurisdictional committees, as well as the task force that the 
President has set up, we ought to have a meeting together and 
really divide these into short-term efforts and longer-term 
efforts to figure out how we can do both at the same time to 
address this crisis that all of us know is upon us.
    The Chairman. You are absolutely right, Congressman Costa, 
and that is why we are moving with all deliveries, feed--and, 
as I mentioned, we are already in contact with Education and 
Labor, and the Labor Secretary. We are already in contact--of 
course, as you know, we are working closely with Secretary 
Vilsack, and, of course, Transportation and Infrastructure.
    Mr. Costa. Well, you have my complete support, and 
Committee, and let us know how we can help you.
    The Chairman. I thank you.
    We certainly will, thank you. And now I recognize the 
gentleman from Nebraska, Mr. Bacon. You are recognized for 5 
minutes.
    Mr. Bacon. Thank you, Mr. Chairman. I appreciate the time 
today and appreciate all the panelists that are here, and their 
testimony. My first question is to Jon Schwalls. You mentioned 
fertilizers are up 35 percent. I have heard the same thing from 
our agriculture producers in Nebraska, and what do you think is 
contributing to these inputs being so much higher, and 
fertilizer being probably the best example?
    Mr. Schwalls. Well, what I am being told is the lack of 
tech supplies, that we use a tremendous amount of tech 
materials that are using crop protection products imported from 
China. So, I am being told the lack of tech supplies coming in, 
and then obviously--so there seems to be the same demand for 
these products, but there is a very short side of supply.
    Mr. Bacon. Thank you. It is a big concern in Nebraska, the 
price of these inputs, so I am sure that is a concern for all 
of our farmers right now, not just in Nebraska. My next 
question is to Mr. Wells. You say 70 percent of our exports use 
water, our agriculture exports. Can you talk a little about the 
state of our lock system? Because I hear a lot of concerns on 
that as well.
    Mr. Wells. Absolutely. GROWMARK ships a tremendous amount 
of crop nutrition production via the inland waterway system. We 
have a number of facilities that are located on that inland 
waterway system, and we are impacted quite a lot from high 
water situations, from low water situations, where they are 
having to dredge. We are also a big proponent of increasing our 
lock system and repairing our lock and dam system: 1,200 locks 
would be our goal. As they bring tows up the river, without 
1,200 locks, they are breaking those tows. It just adds to the 
time delay and the time lag for us to get products into our 
facility, so those would be a few comments I would make on that 
subject.
    Mr. Bacon. I appreciate those comments. The research I have 
done--you have Brazil rebuilding their locks, and they are 
going to be triple the size of ours, so we could produce corn, 
soybeans, beef and pork at a price more competitive than 
anybody in the world, but if we can't--if our logistics adds to 
the cost over our competitors, that is going to cut into our 
trade, so I think it is important to put some priority on the 
lock system on our--in our ports. It is--been a proponent of 
that.
    Finally, I would just like to transition to our trucking 
side of this. An 80,000 shortage of truck drivers, that is a 
grave concern. I know a lot of our trades are in the same boat, 
whether it is welders and what not, and I could go on and on. 
Could you again talk a little about some of the things we could 
do to incentivize folks to get into the trucking industry? You 
mentioned it a little bit, but I would love to hear a little 
more.
    Mr. Samson. Sure. Yes, no, we have been working on 
industry-wide incentives, trying to figure out how to increase 
driver pay, increase flexibility, provide them a schedule that 
may be a little bit more family friendly, benefits, bonuses. 
And, of course, we are also trying to work on the younger 
drivers, bringing them in. We have done--there are a lot of 
high schools right now that are looking at CDL programs. We 
have been working closely with FFA. I know they have almost 
700,000 FFA students that are part of the system.
    And so, we have been reaching out to the younger set. We 
have always been reaching out on the military side, trying to 
get more women in trucking, trying to reach out to those folks 
that are in the urban communities, really educating them that 
this is a really--this is a fantastic career, this is a 
fantastic opportunity, and this is something that we have been 
pushing on--and the image of the industry as well. We have 
really been pushing hard. Agriculture does that very well on 
their side, but from a trucking standpoint, we have also been 
showing them that this is a valuable career path, and something 
that should be looked at.
    Mr. Bacon. What impresses me in Nebraska, a lot of the 
trucking companies will pay folks to go through the training, 
with health insurance, and then you have a great job when you 
come out, and I think that is a model for a lot of our trades 
right now that we could build on. Now, one of the things that 
concerns me is that we have two percent unemployment in 
Nebraska, we have only about 61 percent workforce 
participation, and that is sort of true nationally. In your 
view, are there Federal policies that are inhibiting folks from 
getting back into the workforce? We are sitting at 61 percent, 
it used to be around 67 percent, 68, if I have my numbers 
right, and yet we only have two percent unemployment in 
Nebraska. I know it is under five nationally, roughly. Are 
there things the Federal Government is doing that is inhibiting 
folks getting back in the workforce, in your view?
    Mr. Samson. I think it has been difficult to figure out 
exactly why they have stayed out of the workforce. There has 
been incentives industry-wide--or sector-wide, not just in 
trucking, but all places. We are starting to see an increase in 
hourly wages, and we still haven't seen a lot of those workers 
come back. And so, we have heard a handful of things, but 
haven't quite been able to put our finger on the pulse of 
exactly what is keeping these people outside of the current 
workforce.
    Mr. Bacon. Well, thank you very much for your time, and Mr. 
Chairman, I yield back.
    The Chairman. Thank you, sir. And now I recognize the 
gentlewoman from North Carolina, Ms. Alma Adams, who is also 
the Vice Chair of our Committee on Agriculture, you are 
recognized for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Thank you to the 
Ranking Member as well for hosting the hearing today and thank 
you to the witnesses for your testimony. The COVID-19 pandemic 
has highlighted a number of underlying issues with our supply 
chain, but perhaps the clearest, the fragility of our food 
supply chain. The pandemic has also amplified the importance of 
having a durable and an adaptable food supply chain, one of the 
most complex yet important logistics programs that we need for 
our sustainability.
    As we heard from our witnesses today, some of the 
challenges our supply chain continues to face are congestion at 
ports, and driver and labor shortages, and while these 
shortages are affecting the entire country, we must not forget 
the impact that they have on our school districts, and our food 
service institutions. These institutions continue to struggle 
to provide children and adults with adequate food as they 
respond to supply chain disruption.
    Mr. Cinco, in your testimony you mentioned that bakers are 
often providing baked goods to the Federal feeding programs, 
such as school breakfast, lunch programs, SNAP, and WIC, so can 
you elaborate a little bit on how the various supply chain 
disruptions could impact bakers' ability to continue to serve 
that program?
    Mr. Cinco. Yes. Thanks, Congresswoman. The impact of the 
specifications for the ingredients for the school products 
makes it difficult to get the specific ingredients you have to 
have. Durum flour, for example, comes from North Dakota, and 
the crop was 50 percent less than what was expected. The price 
has gone up almost to double. It is hard to get, it is hard to 
make, and until those specifications get adjusted or moved, I 
think we are going to have some issues with supplying the 
schools.
    Ms. Adams. Okay. So, Mr. Ferrara, the COVID-19 pandemic 
continues to impact the ability of labor to prepare food for 
school districts, for restaurants, retail, and institutional 
food service settings, such as hospitals and prisons, so what 
policy measures can address labor shortages in the 
institutional food sector?
    Mr. Ferrara. Was that for Mr. Ferrara? I am sorry, ma'am, 
we have a----
    Ms. Adams. Yes. Yes, Mr. Ferrara. Yes.
    Mr. Ferrara. Okay. Yes.
    Ms. Adams. Yes.
    Mr. Ferrara. Yes, ma'am, I think this is going to take a 
full approach. There is not going to be one single bullet item. 
I do think we need to change the conversation. There is dignity 
of work, and dignity in working in a supermarket. You think of 
the different career paths, chefs, bakers, technology, customer 
service, there are so many different opportunities that I think 
we need to continue to focus on educating our young people, 
educating others that maybe are sitting out of the workforce 
that these are great jobs and great opportunities to come back 
and to work in stores.
    Particularly for retail, there is a tremendous amount of 
flexibility. Whether you are looking for full time or part 
time, it could be really attractive to those folks who are 
looking for a little bit more flexibility in their lifestyle.
    Ms. Adams. Right. Mr. Durkin, USDA has stated that the 
COVID-19 pandemic exposed a food system that was rigid, 
consolidated, and fragile. So, what was this experience, was it 
your experience, and can you elaborate a little bit based on 
your own company's experience?
    Mr. Durkin. Yes. I mean, COVID-19 actually had a 
significant impact; however, I would say, a testament to our 
organization and all of our workforce, that actually we were 
able to get through the pandemic in a very, very positive way. 
We actually would say there wasn't one customer order that we 
did not--that did not miss. We were confident in that. It 
continued to face some challenges. Like the rest of the 
panelists--my co-panelists on this, we have some labor 
shortages that we certainly are dealing with, but, from a port 
issue standpoint, that has actually been our biggest challenge, 
going forward.
    And I view this--and, as I said earlier, to--using the 
Chairman's words, this is--exports are in a crisis, and any 
help that the House Agriculture Committee, and this body, can 
help on that, I think will be really, really important, and 
useful for the entire----
    Ms. Adams. Thank you. Thank you. Mr. Samson, in your 
testimony you mentioned that there is currently an 80,000 truck 
driver shortage. According to current trends, that gap could 
double by 2030, so what factors do you attribute to the 
shortage of truck drivers, and how does that compare to the 
pre-pandemic environment?
    Mr. Samson. I think, quickly, we have an aging workforce, 
which is one of the big issues, and the problems that they ran 
into with having to deal with the COVID pandemic drove a lot of 
those that were close to retirement towards retirement. I think 
we are having an issue with trying to bring these younger folks 
in is a big deal that we are currently focused on. And so, 
there are a handful of things that we are trying to do to 
retain and recruit, as the Chairman had expressed earlier, but 
it is a difficult environment right now.
    Ms. Adams. Thank you, sir. I am out of time. Mr. Chairman, 
I yield back.
    The Chairman. Thank you very much. And now I recognize the 
gentleman from Tennessee, Mr. DesJarlais. You are recognized 
for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman, and I thank all of 
you for being here today to discuss the supply chain shortage. 
I want to focus a little bit, though, on the mandates, and how 
that is impacting our shortage of workers not just in the 
trucking industry, but on the railroads. CSX has a mandate 
coming on November 8. We have the Federal mandate slated to 
take effect on November 22, and, Mr. Samson and Mr. Wells, how 
helpful would it be if these mandates were delayed, pushed 
back? And then I also want to talk about natural immunity.
    Mr. Samson. Sure. Just quickly, I just want to make it 
clear that the trucking industry is not anti-vaccination, we 
are anti-supply chain inefficiency, and what we have heard from 
a lot of our carriers is you have some very large carriers that 
have vaccine hesitancy in their drivers. And let us just say 50 
percent of their drivers are not vaccinated, and we have heard 
80 percent of those 50 percent will never become vaccinated. 
And so, we are looking at the potential of them leaving larger 
companies to go to a company that is under 100 drivers, or they 
have the alternative to leave the industry altogether. And so, 
we are looking at that as it compounding--it negatively 
significantly compounding the driver shortage issue, and 
growing that, which is of great concern to our industry.
    Mr. DesJarlais. All right. And I have Big G and Titan 
Trucking in my district in Shelbyville, Tennessee, and they 
have been sounding the alarm as well. I have heard numbers 40 
percent, you said 50 percent, and these are educated people. 
They have been through the worst of the pandemic. Here we are, 
the Delta variant is subsiding, we have been 18 months into 
this, we have had first responders, frontline workers, police 
officers, our military personnel, border agents, I mean, just 
all walks of life that have made it through the pandemic.
    And I am pro-vaccine, I am vaccinated, but it is not right 
for everyone, and thankfully we have excellent therapeutics, 
and monoclonal antibodies, which can keep you out of the 
hospital 70 percent of the time. We know that the deaths with 
this pandemic, 95 percent have occurred in people over 50. You 
start looking at the younger age groups, and I can understand 
some of their concerns about the vaccine and some of the side 
effects.
    Plus, we don't know how long that the vaccine actually 
works. We know that--I am due for a booster. I had Pfizer back 
in November. I am not 65, so we know that the vaccine 
efficiency does wane with time, but natural immunity, on the 
other hand, if we are not afraid to follow the science, which 
we shouldn't be, that is what this whole thing has been about, 
according to the CDC, Dr. Fauci, and others, we need to look at 
the studies coming out of Israel, and Britain, and other 
European countries that show natural immunity to be superior to 
the vaccine.
    I was on a Fox show the other night where the host said 
that, yes, but they said that the natural immunity only lasts 
16 months. Well, guess what, they have been tracking it 16 
months, so at 18 months they will probably say 18. At 2 years, 
they may say 2 years. Bottom line is SARS-1, that happened 20 
years ago, those people are still immune, so why aren't we 
looking at natural immunity, and counting that as the same as 
being vaccinated? It just doesn't make any sense. And I get 
that they want to get as many people vaccinated as possible, 
but what you are telling me is we could have a catastrophe here 
in a short time, in terms of supply chain, if up to 40 or 50 
percent of your truckers leave. And Mr. Wells, do you agree 
with that, in terms of----
    Mr. Wells. Yes. We are, yes. We are short of workers at 
this point in time. We have, I believe, around 290 openings 
today just in Illinois, Iowa, and Wisconsin for our area; but, 
mandates, such as a vaccine mandate, we are really concerned 
that it will lead to more openings. We operate a lot in rural 
America, as you well know, and it is hard to find labor in 
rural settings to begin with. They may be a little more 
reluctant, and so--I heard a study repeated on the radio the 
other day that they expect potentially up to 33 percent of the 
workforce that are unvaccinated to leave the workforce.
    Mr. DesJarlais. Yes.
    I think it would be helpful for you guys if you issued 
letters. I have written letters on behalf of TVA, Arnold Air 
Force Base, that deal with hypersonic weapons. You can't 
replace some of these skilled people. You can't just replace a 
trucker overnight. And so, I think if we could ask, at the very 
least, for a pause in this mandate, push it back after the 
holidays, let us see how the pandemic turns into an endemic, 
and look at the new drugs that are coming out, consider natural 
immunity, and we just need some more time. This hard mandate 
just feels like it is going to create a disaster, almost like 
we saw in the withdrawal from Afghanistan. We need a 
contingency plan, so I would urge you guys to write letters to 
the President, the Administration, and ask at the very least 
for a pause so we can look at this. Let us follow the science.
    People aren't afraid to. I don't blame people for looking 
at things skeptically, but we can handle the truth. We just 
need to know the truth and thank you guys. I know I am out of 
time. Thank you, Mr. Chairman, for your indulgement.
    The Chairman. Thank you. And now I recognize the 
gentlewoman from Connecticut, Mrs. Hayes, who is also the 
Chairwoman of the Subcommittee on Nutrition, Oversight, and 
Department Operations. You are recognized for 5 minutes, Mrs. 
Hayes.
    Mrs. Hayes. Thank you.
    The Chairman. You may want to unmute, Mrs. Hayes.
    Mrs. Hayes. I am sorry. Thank you, Mr. Chairman.
    The Chairman. Sure.
    Mrs. Hayes. Thank you, once again, for holding this very 
important hearing. I have heard of the immense daily impact of 
global supply chain disruptions from constituents all over my 
district. 90 percent of Connecticut restaurant operators report 
paying more for food. Connecticut Costco stores imposed a one 
per customer limit on paper towels and toilet paper in early 
October due to disruptions in shipments, and school districts 
have reported continued anxiety of supply chain disruptions 
interfering with their ability to feed children during the 
school day. These trends are disturbing, but they can be fixed.
    When faced with empty grocery store shelves and struggling 
producers in 2020, we tackled the issue with emergency 
policies. Our COVID-19 response bills provided direct payments 
to agricultural producers, established grants for farmworkers, 
meat packing workers, and frontline grocery workers, invested 
in and expanded processing capacity for small producers. 
Additionally, the USDA announced that they will use a total of 
$2 billion to address supply chain issues nationally and in 
schools. This week I joined the Ocean Shipping Reform Act, 
which would also help address global disruptions.
    While all of this has worked to mitigate what could have 
been a more dire situation, we still clearly have more work to 
do. In the testimony today we heard how a lack of labor 
availability is at the core of industry disruptions. Of course, 
we must ensure our agricultural supply chains are resilient, 
stable, and fortified for the future, but we cannot do so at 
the expense of workers' dignity and compensation.
    So, Mr. Ferrara, in addition to grocery store owners 
raising wages, offering overtime compensation and sign-on 
bonuses, you recommended that Congress invest in workforce 
training programs for workers entering the grocery industry. 
Can you go more into detail into how that would benefit workers 
looking for long-term stable employment?
    Mr. Ferrara. Yes, Congresswoman, and I'm glad you mentioned 
what our members have done, over 93 percent have increased 
wages, bonuses, provided other benefits to their members. We 
have a tremendous opportunity--when you think of the grocery 
store, there are so many different departments within that 
store that are specialized, and we have opportunities to help 
train bakers, to help train chefs, to help train deli workers, 
florists, meat cutters in our stores. We cut meat in our stores 
still.
    These are skilled jobs, they are high demand, and it is 
really a tremendous opportunity for us to get to folks, 
particularly local--excuse me, young folks, to get them into 
the workforce with a skill that will stay with them, and can be 
very, very beneficial throughout their career. And we would 
gladly work with you and the other members to be able to do 
that.
    Mrs. Hayes. Thank you. On my other Committee of Education 
and Labor, I have been intensely focused on career training 
programs, technical programs, that would address some of the 
very things that you have just said. Additionally, a lack of 
access to H-2A workers has impacted dairy farms across the 
country, especially those in my district. Earlier this year we 
voted to pass the Farm Worker Modernization Act (H.R. 1603), 
which would help address the H-2A bottleneck, and improve 
workforce protections for H-2A workers. Mr. Durkin, can you 
explain how impediments to accessing H-2A visas have affected 
your members, particularly small dairy farms?
    Mr. Durkin. Yes. Obviously, the labor shortage is a 
significant impact across the country, and dairy farmers are by 
no means exempt from that, so clearly anything that we can do 
on that end to support our farmers. We don't own any of the 
farms personally. We supply all of our milk--get all of our 
milk through the DFA and co-ops across the country, and we--
they are valuable supporters of us. And anything we do, we say 
it all starts with milk, and so anything we can do to help the 
farmer be more successful on their end is a benefit to us.
    Mrs. Hayes. Thank you. And, last, I am deeply concerned 
about reports of disruptions to school food deliveries across 
Connecticut and the nation. Mr. Cinco, you mentioned in your 
testimony that several of your members may no longer be able to 
supply baked goods to schools due to global disruptions. In 
your opinion, how can we strengthen local supply chains to 
prevent such catastrophic disruptions?
    Mr. Cinco. Well, Congresswoman, I think we need to worry 
about the transportation of ingredients. We can't do anything 
about the weather situations that cause disruptions in durum 
flour, but if we could get the material here, we could make it 
and distribute it. It is just very difficult to get it here at 
this point. Other than that, I would say that is about the 
extent of that.
    Mrs. Hayes. Well, thank you for your input. I think that is 
what we are all trying to do, to lessen the disruptions, and 
open up access to the supply chain. My time has expired, Mr. 
Chairman. I yield back. Thank you.
    The Chairman. Thank you, Mrs. Hayes. And now I recognize 
the gentleman from Illinois, Mr. Davis. You are recognized for 
5 minutes.
    Mr. Davis. Thank you, Mr. Chairman. I think this 
stakeholder conversation is a very important one for us to 
have, and we have to try to continue to mitigate the ways 
Americans are actually being crushed by high prices on gas, 
groceries, natural gas, and to no fault of any of the 
industries that are represented here today.
    Every sector is being crushed beneath the weight of this 
Administration's rampant spending agenda that is driving high 
costs and inflation. There is a shortage of everything from 
semiconductors to shrimp paste right now in this country. And 
when we look at this problem holistically, there is an obvious 
worker shortage that--as all of you have testified, and as my 
colleagues have continually brought up, there is a worker 
shortage that is contributing greatly to our supply chain 
issues. There are approximately 11 million work ready adults, 
certified by their state workforce agencies, who are receiving 
SNAP benefits, but could start working immediately to fill some 
of the 10.6 million jobs that are open today. Chairman Scott 
mentioned it. Mr. Samson mentioned the thousands of truck 
driving jobs that are available.
    We have to look under our jurisdiction to what we can do to 
invest in our SNAP Education and Training Program to get these 
families that are receiving benefits trained for the jobs that 
we know are open. And, frankly, we tried that, when we were in 
the Majority, during the last farm bill, and some of us were 
called evil for saying if we don't do it then, when the economy 
is great, when will we ever do it? Now we see the failure of 
that failed policy is that we don't have enough workers trained 
to address this new supply chain crisis, and this 
Administration seems to want to do nothing about it.
    Now, as we look--we can shift our workforce development 
programs, especially in the industries that all of you 
represent today, and we can fill these jobs, we can put this 
piece in the puzzle. But I want to start with Mr. Wells, since 
I know him the best--I would like to start by asking you, what 
do you think we can do to maybe work with our SNAP Workforce 
and Training Program to pair up our community colleges in 
places like Bloomington and Normal, and be able to get people 
trained to take the jobs you mentioned are available at 
GROWMARK just a few minutes ago?
    Mr. Wells. Yes. Actually, we are reaching out to community 
colleges in a lot of the areas that we do business. We have 
technology that we purchased recently that allows them to, for 
instance, virtually drive a spray machine, and so--they are 
very high-tech machines, and so, Congressman, we are working 
very diligently in those areas, and see that as an opportunity 
to source that level of labor, so we would be happy to engage 
in that.
    Mr. Davis. Great. Anybody else want to tackle that issue?
    Mr. Ferrara?
    Mr. Ferrara. One of the opportunities, Congressman, in the 
grocery business, retail and wholesale, is we will train you. 
On the job training. Get us in the--our distribution center, 
get us at our stores, we will teach you to drive a forklift, we 
will teach you to slice meat, we will teach you to be a baker. 
We talk about truck drivers, some of our members will pay for 
trucking school, for those that go through that. One of our 
members told us yesterday that three of their truck drivers 
made over $150,000 a year. We need to be talking more about 
that, and those kind of careers that can get people into these 
jobs, and really making great wages for their family.
    Mr. Davis. Well--and you mentioned, you know--and your 
industries employ a lot of our blue-collar workforce. Don't 
underestimate how many blue-collar workers actually have 
student debt. They went to college, they incurred debt, and 
they didn't get a degree, and now they are working in 
industries that have shortages right now, and they are making 
good money at that.
    But there is a new benefit that all of us, Republicans and 
Democrats passed in the CARES Act (Pub. L. 116-136) that allows 
employers to pay down student debt and have that debt tax-free 
for their employee up to $250. This is a great recruitment and 
retention tool that many of the companies that you all 
represent ought to actually take advantage of. You don't have 
to fill out some grant paperwork. You don't have to wait for 
appropriations for a program to apply for. This is actually 
using the same provisions as the Tuition Reimbursement Program 
that many of your companies that you represent have used for 
years. Take advantage of this. If you need more information, go 
to my website, rodneydavis.house.gov, and you will be able to 
see some information on this student loan repayment program. 
But get employers engaged. This is a new program that you could 
all take advantage of. And I have to go to another hearing, so 
I am going to yield back.
    The Chairman. Thank you. And now I recognize the gentleman 
from Illinois, Mr. Rush. You are recognized for 5 minutes. Mr. 
Rush, you are recognized. You may need to unmute. No sound?
    Voice. Okay. Well, go to Ms. Pingree while he works out his 
technical issues.
    The Chairman. Okay. If word can get to Mr. Rush, we will 
allow him time to work out those communication difficulties, 
and we will come back to him. Staff, let me know when he is 
available. And we will now recognize the gentlewoman from 
Maine, Ms. Pingree, for 5 minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman. Thank you 
to all of the witnesses for being with us today to talk about 
such an important topic, and I really appreciate all of the 
answers that you have been giving us. I will bring up a couple 
of questions.
    For Mr. Ferrara from the National Grocers Association, 
about consolidation, I really appreciated your comments in the 
testimony about how consolidation has exacerbated supply chain 
issues. We all saw the impacts of this in another highly 
consolidated sector, in meat processing, early in the pandemic 
when a small number of very large meat plants shut down, 
significantly reducing processing capacity and disrupting the 
supply chain nationwide. Could you expand a little on--about 
how consolidation in the food and agriculture sector, including 
grocery retail, is affecting the supply chains, and do you have 
any recommendations that you would make to improve competition, 
and level the playing field for small and independent 
businesses?
    Mr. Ferrara. Yes, Congresswoman. As we have seen the most 
dominant players get larger, their suppliers have to get larger 
to be able to just compete with them and engage with them, and 
that does leave a lot of the local and smaller regional folks 
maybe not at the most competitive advantage to be able to 
compete. One thing about independent grocers is that we are so 
local, we are so connected to those local food systems, to 
those local producers, that we were able to take advantage of 
that, quite frankly, during the pandemic.
    We certainly felt the impacts of the meat shortages during 
those few weeks, but I think we had an advantage in, one, we 
have butchers in our store. They are cutting meat. We were able 
to work with other suppliers. A lot of our members were able to 
work with local producers, local ranchers and meat packers, to 
be able to get supply, and to keep their shelves full. I think 
it is an area where it is a huge advantage for independent 
grocers to work with local producers. They are tied in so 
strongly, and it is an area that they can differentiate, but we 
do need to have a focus on really how the dominant players in 
the marketplace are influencing the full supply chain, and that 
includes the impact on local producers.
    Ms. Pingree. Yes. Thanks for your answer. I think it is a 
really important focus for this Committee, and one that does 
come up, and I appreciate your remarks about being able to 
purchase more locally because you have that connection. We 
certainly saw that in a state like Maine, where there was great 
demand for buying more locally, and I think that is also an 
important part of the investments that we need to be making, is 
making it possible for more food to be sold locally.
    I guess I will have anybody on the panel answer my second 
question. The agriculture sector is, in particular, on the 
front lines of climate change, and we have seen the impact of 
more frequent and extreme weather events. Just a few weeks ago 
Hurricane Ida destroyed crops and livestock, and they took key 
crop input production facilities offline. The drought out West 
has had similar devastating impacts. Mr. Cinco, you mentioned 
some of the challenges with durum wheat, which was dramatically 
affected by the drought, the ability to get that. So, while we 
are here today talking about trucking shortages, labor 
shortages, some of those things in the supply chain, it is much 
harder to impact the weather issues that are dealing with our 
food supply, and our availability, and that is something that 
doesn't appear to be going away in the future. Mr. Cinco, I 
don't know if you want to comment on that, or anybody else, 
just about how we factor that into these future supply chain 
challenges.
    Mr. Cinco. There is going to have to be some formulation 
changes, there is going to have to be some technological 
advances in the food industry. As I said before, gluten is a 
very short commodity right now, and most of my suppliers are 
coming up with enzymes that reduce the usage of gluten in the 
facility, so we have gone from 25,000 pounds a week down to, 
like, 12,000 or 13,000, which is helping us. Even though you 
are paying for an enzyme, at least you can produce, and you 
don't have to fight the lack of gluten in the world. So, I 
think technology, going forward, is going to help for the 
baking industry itself.
    Ms. Pingree. Yes. That is an interesting perspective. 
Anybody else who has been talking to us about supply chain 
issues and availability want to weigh in on this issue of 
weather that is going to continue to be unpredictable, and how 
we attempt to plan around that?
    Mr. Wells. I believe, on the biotechnology side, for row 
crops, certainly there has been tremendous advances in 
biotechnology. There is a lot of talk about developing more 
heat-resistant hybrids of corn, more drought-resistant hybrids, 
and so I think it is important that we, again, utilize that 
technology to the advancement of the industry, and to feed the 
country.
    Ms. Pingree. Yes. Resistance, and crop resistance, and all 
of those kinds of things I think are an important part of the 
research going into the future, so thank you for that. I am 
over my time, but I really appreciate all of you being here 
with us today, and I yield back, Mr. Chairman.
    The Chairman. Thank you, Ms. Pingree. And now I recognize 
the gentleman from Georgia, Mr. Allen. You are recognized for 5 
minutes.
    Mr. Allen. Well, thank you, Mr. Chairman.
    Can you hear me okay?
    The Chairman. Yes, we can.
    Mr. Allen. Good. Thank you. And thanks for having this 
hearing today. This is very critical. We need to have a sense 
of urgency with this issue, and we need an all of government 
approach, because we have talked about this now for months, and 
we talk about solutions, that sort of thing, and we are talking 
top-down solutions. We are talking about spending more money, 
and all these other ideologue--that really don't address the 
problem. And, of course, we continue to do the same thing, and 
expect a different result, and we know what that is.
    So, my concern is that we could solve this problem, but we 
can't solve it under the current template, meaning that, 
whether it is incentivizing people to go to work, for example, 
we have 25 million work capable people on the SNAP Program 
right now that would enjoy a great opportunity to make $150,000 
a year. They just need to be trained up. We have ten million 
people sitting on the sidelines, for whatever reason, because 
of loan forgiveness, and all these other things, or some 
government stimulus program, they are not motivated to work.
    So, what we have done is created this whatever, utopia, you 
want to call it, and now we have a huge labor problem. We have 
a Labor Department that won't even allow legal programs to work 
for--to get people in here. We have solved our labor problem 
for generations with immigrant labor. And so here we are, and 
we can't even get those programs to work. The Labor Department 
is creating havoc with that.
    So, somewhere--and I want to hear from every witness. 
Somewhere we have to do this from the bottom up, rather than 
the top down. And what I want to know is what do we need to do 
in the--the fastest way to do it is the Executive Branch, and I 
will give you an example. In the 1980s the air traffic 
controllers pretty much went on strike, and it shut down the 
airline industry. President Reagan immediately--it got his full 
attention, he addressed it, and he fixed it. And, much to the 
chagrin of the union, but, again, you have a situation where 
the country was at stake, and he did it with Executive Orders, 
which is his privilege in the event of an emergency. We have an 
emergency here.
    So, what I want to hear from the witnesses is what do we--
and Congress moves entirely too slow, but where do we need to 
put pressure on the White House to either relax union 
jurisdictional rules, pause regulations, whatever we have to do 
to fix this problem and get this economy moving again. And, I 
will start, Mr. Cinco, with you, and go through the entire 
panel.
    Mr. Cinco. Congressman, we could use people that just want 
to be here. The 24/7 work/life balance, so for another sake I 
am using it, is very difficult for us, but the fresh bread that 
needs to go to places can't be stored for days. So, we need to 
find a way to incentivize weekend work, or extra shifts, or 
things like that. Like, people don't want to work midnights. 
People--there are a lot of jobs out there where people can go 
to places where they don't have to work midnights, they don't 
have to work the weekends. It is very difficult for us to keep 
people here around the clock. That would be somewhere to start.
    Which we do that, but it becomes financially tough on a 
bakery of our size to pay extra money. I mean, bread is a 
commodity that everybody buys, and the increase that we would 
pay is going to increase to the end-user, and it is going to be 
detrimental to our survival, so to speak.
    Mr. Allen. Yes. Mr. Wells, I am sorry. I am out of time 
here. But anyway, I think you need to share that with this 
panel. As we go forward, what do we need to do to correct this 
situation immediately and fix this problem? And I think if we 
put our heads together, and we do it bottom up, we will get it 
done. Thank you, and I yield back, Mr. Chairman.
    The Chairman. Thank you, Mr. Allen, and you are absolutely 
right. We have to move out here right now, and get this problem 
solved. The gentleman from Illinois, Mr. Rush, you are 
recognized for 5 minutes.
    Mr. Rush. I certainly want to thank you, Mr. Chairman. This 
has been a very outstanding hearing, and I glad about it. Mr. 
Chairman, I have heard from stakeholders in my district, and 
around our nation, about the unsustainable and dramatic cost 
increase due to issues in the supply chain. I am currently 
drafting a letter to the FTC, asking them to immediately begin 
to investigate and review price gouging in the supply chain.
    Mr. Durkin, you mentioned that for U.S. dairy businesses, 
procurement prices are up between 20 to 30 percent. And, Mr. 
Wells, in your testimony you describe how the port backlog is 
resulting in rising--and retention costs to shippers, and 
eventually to consumers. Mr. Durkin and Mr. Wells, for your 
industries, can you expand upon the extent to which your 
members have suffered large cost increases, and more 
importantly, is price gouging in the food supply chain a 
problem that the Federal Government should be seeking to 
address? Why, or why not?
    Mr. Durkin. Absolutely we are having challenges from a cost 
standpoint, and I would argue, in my 40 years in business, it 
has been unprecedented, in terms of--across the board, where 
the increases are happening. Focusing on the export side of it, 
as I mentioned in my testimony, we have seen increases going up 
not only on the freight costs going across, but then demurrage 
charges that actually--booking will get rolled--we will get 
charged on those bookings or on those rolls, and it will 
happen, and we have no idea that a booking has been rolled, and 
we get charge after charge after charge. So, a $5,000 bill 
turns into a $20,000 bill. So, is that actually impacting us? 
Absolutely.
    Mr. Rush. Mr. Wells?
    Mr. Wells. Congressman, we routinely face demurrage charges 
with the nature of our business. As you know, agriculture moves 
extremely quickly, and when weather windows allow us to 
operate, we need to operate, and so it leads to a lot of 
congestion, and has for years. The prices for products that 
farmers pay for have gone up considerably. I would point to a 
convergence of factors. Feedstocks, natural gas, which is a 
primary piece of--and nitrogen production has gone up. 
Transportation has gone up for reasons that we have talked 
about today. I can't point to any instances where I can say 
price gouging occurred, but I could tell you that it is of 
great concern to our members, and to our farmer-owners, the 
rising costs that they are paying today.
    Mr. Rush. Thank you. I recently met with members of the 
National Confectioners Association, where we discussed supply 
chain issues. While Chicago confectioners have the same supply 
chain problem that other food manufacturers do, they bear an 
additional burden. That is because the USDA rigidly controls 
the import of sugar and is slow to allow adequate supplies to 
enter the U.S. even when they are needed. We are seeing the 
highest sugar prices in many years, and yet--at the same time, 
USDA steadfastly claims there is enough sugar on the market. To 
be frank, my constituents feel differently. That is--Mr. Cinco, 
do you agree with me that it is time to finally reform our 
sugar policies, and if so, what reforms do you recommend?
    Mr. Cinco. Yes, you are very correct, Congressman. The 
sugar is at a high price. We are seeing upwards of 20 percent 
increases in granulated sugar. The beet sugar that we are using 
out of Michigan is all dependent on the crops, as we referred 
to before, depending on the weather, and how the crop reacts. 
That is a very important part of how much we have in the 
country. So, if their crop is good, it seems to be less of a 
problem. When their crop is bad, USDA doesn't let us import.
    There is a hearing coming up, speaking about sweeteners, in 
mid-November about honey, about how much we are going to import 
of that, so that is going to be the next problem on the 
sweetener side that is going to be a price gouge, I guess, as 
you said before. But yes, we need to look at how we import 
that.
    Mr. Rush. Thank you. Mr. Chairman, thank you so much. I 
yield back.
    The Chairman. Thank you, Mr. Rush. I appreciate it. And now 
I recognize the gentleman from Pennsylvania, our Ranking Member 
Thompson. You are recognized for 5 minutes, Mr. Ranking Member.
    Mr. Thompson. Thank you, Mr. Chairman. Congress has a job 
to do to address many of the issues that are being brought up 
to our attention today, however, action by the Administration 
to provide regulatory relief, or what I would say would be 
regulatory flexibility, would have the swiftest impacts on the 
current bottlenecks in the supply chain. And I am going to 
start with Mr. Wells. Mr. Wells, what immediate action can the 
Biden Administration take, through USDA or other Departments, 
to provide regulatory relief, or regulatory flexibility, and 
mitigate the current crisis?
    Mr. Wells. One of our biggest challenges is in the 
transportation sector, as many have talked. I think there are 
some things that can be done with potentially raising weight 
limits for transportation that would allow more product to be 
transported at one point in time. We talked about hours-of-
service exemptions. We talked about the air miles, increasing 
air miles from 150 to 200 miles. Those would all be some 
immediate impacts on the transportation side of the business, 
where we face tremendous pressure.
    Mr. Thompson. Mr. Wells, thank you for those very concrete 
recommendations. I want to note to other members of the panel 
that may have any suggestions for what this Administration 
could do immediately, whether it is USDA, or another agency 
department, for increased regulatory flexibility.
    Mr. Durkin. I mean, from the standpoint of--we talked about 
the Ocean Shipping Reform Act, and what we need to do there. 
That is something that has to get done and get done 
immediately. And I know the bill is out there, but when we 
follow kind of the timing on this, the delay in terms of 
getting it approved by the House, and then going to the Senate, 
my concern is what can be done very quickly on that, and the 
same thing on the 24/7. The Administration put a lot of focus 
on that, but that is not a law, it is not an Executive Order, 
and that needs to be done immediately as well.
    Mr. Thompson. Yes. We saw, throughout 2020, with the Trump 
Administration, a significant amount of flexibility was 
exercised through waivers because we were in a health crisis, 
but we are in a significant crisis when it comes to impediments 
to the food supply chain, so point well taken. Biden 
Administration might want to look at some of the--that 
flexibilities--similar flexibilities exercised previously. Any 
other panelists have--go ahead, Mr. Ferrara.
    Mr. Ferrara. Yes, sir. I would also add a reinforced hours 
of service waiver. That has been something the Trump 
Administration and the Biden Administration have both been very 
flexible on, but we are going to need to continue to have that, 
and even a longer-term waiver is important. The other is the 
WIC Program, the Women, Infants, and Children's. With the 
supply chain challenges we are having, if there are shortages 
of certain WIC package items, I think it is very important that 
we are quickly, emphasis on quickly, providing the flexibility 
so that those participants can get the item that they need that 
is available in the store, that they are not in a situation 
having to go without those items. So, I think that is something 
that could be done quickly.
    Mr. Thompson. Very good. Anyone else? Go ahead, Mr. Samson.
    Mr. Samson. I would just like to add on that the hours-of-
service flexibility piece and the emergency declarations were 
definitely helpful, both on the wait side and the hours-of-
service side. But you get into the port as well, and what used 
to be four to five turns from a truck is now down to three 
because of the detention time that they are waiting in line. 
And so being able to pause a clock, whether it is in the port 
or if it is going around an urban area, is nice to be able to 
try to limit the congestion that they are actually sitting in.
    Mr. Thompson. Thank you. I see this crisis every bit as 
dangerous as what we experienced with the plague of 2020, 
because this is an assault on our economy, and an assault on 
getting access to nutrition. The WIC Program is a great example 
of that, and I would hope the Biden Administration would rise 
to the occasion, much as we saw the previous Administration do 
throughout 2020.
    Mr. Durkin, I just want to circle back. I really--your 
testimony highlights, as you refer to it as the export crisis. 
Can you provide just an estimate of the cost that this crisis 
is to your business, and the dairy industry more broadly?
    Mr. Durkin. Well, from our standpoint, I talked about the 
incremental freight and storage charges that we have incurred, 
and clearly it is in the millions of dollars, there is no doubt 
about that. What can't be measured is the potential loss of 
customers that not only we have, but really the dairy industry 
as a whole. So--we are a large purchaser of milk, we are a 
large part of the dairy industry, but you can multiply our 
numbers by hundreds, and then you really kind of get into the 
impact of what it is having on the overall dairy industry, 
which is significant.
    Mr. Thompson. I think, Mr. Chairman, we have some really 
good folks who are pending for confirmation at USTR, 
specifically in the agriculture area. It would be great if we 
could get them confirmed, and, quite frankly, they go to work 
working with our trading partners, and our trading partners put 
pressure to--well, put pressure on our trading partners to make 
sure they are not taking back these storage containers empty, 
but full of good, American-produced agriculture commodities. 
So, thank you, Mr. Chairman.
    The Chairman. Yes. Thank you, Ranking Member, and you are 
absolutely right. Now I recognize the gentlewoman from New 
Hampshire, Ms. Kuster. You are recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman. Today's 
hearing topic hits close to home for my district, and my 
region. Northern New England isn't an area you can easily pass 
through on your way to someplace else. We are at the end of 
many delivery lines, and it must be very deliberate to get to 
us. The vast majority of goods not already produced in New 
England have to be trucked into our region, and, of course, 
there is a lot of labor and time required to do just that. So, 
these realities have long contributed to higher prices for some 
goods. The pandemic supply chain disruptions have exacerbated 
the challenges we face.
    I do appreciate, in the grand scheme, our nation's food 
supply chains are incredibly efficient and resilient, and the 
steps we took with the COVID relief packages in 2022, 
especially the American Rescue Plan this year, have gone a long 
way to help supply chain stakeholders, from farmers all the way 
to grocers, remain solvent, and weather these very challenging 
times. Nevertheless, it is clear it will take food supply 
chains a long time to recover. I want to make sure my 
constituents, especially those who struggle with hunger and 
food insecurity, are able to access and afford nutritious food. 
This takes on added meaning as we head into the holiday season 
with our families.
    To ensure that happens, while also not shortchanging our 
farmers and frontline workers all along the food supply chain, 
is very challenging, but it is a balance we must strike. One 
important thing we can do, and I am seeing this happen with 
grocers and co-ops in my district, is buying and sourcing 
locally wherever possible. A silver lining of the pandemic has 
been heightened consumer interest in supporting local 
agriculture and producers with food choices.
    Mr. Ferrara, from your position with NGA, I am curious if 
you are seeing your members increasingly working with local 
food producers, and sourced from regionally connected 
distributors, and what can we do to help foster these 
relationships?
    Mr. Ferrara. Yes, Congresswoman, thank you for the 
question. Again, this is an area that independent grocers 
really take upon very seriously. It is an area how they 
differentiate from their chain competition. They are local, 
they know their local producers, they know the local farmers, 
and, quite frankly, customers come to their stores to be able 
to source those local items from local producers. But I think 
we really need to look at the supply chain and ensure that 
those local producers continue to have a chance, because we are 
going to continue to see more consolidation, and more influence 
from the largest power buyers across this country, and it is 
really important that those local producers have an outlet for 
their products, and the independent grocer is the perfect 
outlet for that.
    We need to make sure that the industry is competitive, and 
that the anti-trust laws are enforced, so that those 
independent grocers can continue to serve those communities, 
like your district, and can serve those customers who need 
access to nutritious and a wide variety of foods.
    Ms. Kuster. Thank you so much. Now, shifting gears 
slightly, stakeholders in my district have been sharing with me 
examples of backlogs, where food and value-add products 
themselves are not in short supply, but packaging for them is 
hard to come by. Mr. Durkin, could you comment on what 
challenge is your company, or IDFA more broadly, still seeing 
in terms of packaging shortages, and have you been developing 
strategies to mitigate packaging supply challenges, or even 
minimize packaging, as we move forward?
    Mr. Durkin. I mean, obviously there we have been--there 
isn't probably an input item we haven't had a challenge with 
this year, so packaging is a good example of that. We have had 
certain challenges where we have had to work with our suppliers 
to try to get that in place. We have avoided certain things, 
but there has--come down to situations just really in the last 
couple of weeks where we have had to change out production 
schedule because of delays in receiving our packaging.
    What we have also seen, as we mentioned earlier, and the 
panelists have also said this, is the inflationary component of 
this as well, so all of our packaging costs have gone up. And, 
to your point, we have been, and continue to work from a 
sustainability standpoint to reduce the amount of--obviously 
cardboard, as an example, and other packaging-type materials to 
make sure that we can--are good corporate citizens in that 
regard. But in the near-term, that availability is still a 
challenge, and we are working with our suppliers to try to 
eliminate that.
    Ms. Kuster. Well, thank you. My time is coming to a close, 
but I am very grateful to the panel, and to everything we are 
doing, to work together to ensure that we have a safe, healthy, 
accessible, and affordable food supply chain for all Americans 
as we head into the holidays. So, thank you very much. With 
that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much as well. Now I recognize 
for 5 minutes the gentleman from South Dakota, Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman, and before I ask my 
questions, I just want to thank Mr. Durkin. Sir, in your 
testimony you highlighted the bill that I have with John 
Garamendi related to the ocean shipping reforms that haven't 
taken place for 30 years, but are much needed, so I just wanted 
to say thank you.
    Clearly, these supply chain problems are a terrible 
problem, and they are rippling from almost every segment of the 
American economy. It is good to hear a lot of agreement on some 
of the things that might help. Mr. Wells, in your testimony you 
mentioned the power of unlocking all of these safe 18, 19, 20 
year old drivers, and how much that could alleviate the 
shortage of drivers in the trucking industry. Mr. Ferrara, you 
noted that every industry has these shortages, but that getting 
these young truckers on the road really would help. Mr. Samson, 
you estimated that we are short 80,000 truck drivers, and you 
suggested that this pilot could unlock opportunities, perhaps 
as many as 3,000.
    You gentlemen probably know this, but I am leading a letter 
that has 55 signatories that is calling on DOT to expedite 
their reconsideration of a Trump Administration rulemaking.\2\ 
It would take just exactly the action that you gentlemen 
highlighted, getting these safe drivers, who are already 
driving intrastate loads into the interstate system. What I 
want to ask of Mr. Wells, Mr. Ferrara, Mr. Samson, what are 
your thoughts on the long-term--and clearly the pilot is 
helpful--what are the prospects for long-term reforms, and to 
what extent could they help with our long-term supply chain 
weaknesses? Let us start with Mr. Wells.
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    \2\ Editor's note: the letter referred to is located on p. 144.
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    Mr. Wells. Yes, this is a good start. Obviously, the 
earlier you get folks into the industry, the better chance you 
have for them to develop a career out of it. So, while this is 
a short-term fix, it also could yield long-term results in the 
fact that those drivers, those youngsters, would tend to stay 
in the business longer. So, I think they are both part and 
parcel.
    Mr. Johnson. Yes. I think Mr. Samson will correct me if I 
am wrong, but I think the average age that somebody begins 
truck driving is in their 30s, and so getting people connected 
younger, presumably, would help them make better careers even 
earlier. Mr. Ferrara, any thoughts on long-term prospects?
    Mr. Ferrara. Yes, absolutely. We need to get into high 
schools. We need to get into--not everyone is destined for 
college, and everyone wants to be weighted down with college 
debt, and these are good paying--these are great jobs, great 
careers, and let us get to these young folks early. Let us make 
sure they are exposed to these opportunities in their community 
and give them the tools and resources they need at the right 
age so that we can get them involved early on, and we can give 
them the tools they need to be very successful in their 
careers.
    Mr. Johnson. Yes, because these truck drivers--this is the 
glue that holds the American economy together. Let us get more 
safe drivers out on the road. Your thoughts, sir?
    Mr. Samson. First, I want to thank you for your Ocean 
Shipping Reform Act legislation. We have been intimately 
involved in that, and believe it is going to have extraordinary 
impact to kind of start to loosen the logjam. As far as the 
driver issue goes, we have worked with FFA. They have 700,000 
folks that are part of FFA. We went out to their meeting, 
explained there are not 700,000 agriculture jobs, but there are 
jobs that go and work with agriculture, whether it is 
transportation, or whether it is working in a warehouse, and 
giving them this viable, fantastic career option is a great way 
to kind of educate these young kids, and get them into the 
industry. And so, I think the DRIVE-SAFE Act is a foot in the 
door. I think we have additional opportunity that we can build 
on, but, as Mr. Ferrara said, getting into the high schools, 
getting into these younger folks before they get too much into 
their career option, gives them a choice that they wouldn't 
regularly have.
    Mr. Johnson. Thank you very much, gentlemen. Mr. Chairman, 
I just want to thank so many of my colleagues who have gotten 
on the Under-21 letter that I am circulating, and so many that 
have gotten on the Ocean Shipping Reform Act that Mr. Garamendi 
and I are pushing. We can do so much more together than we can 
on our own. Thank you, sir, for your leadership. I yield back.
    The Chairman. Yes. Thank you very much, Mr. Johnson, and 
you are absolutely correct, and I want to commend you for the 
leadership you are providing on this issue as well. And now I 
recognize the gentlewoman from Illinois, Mrs. Bustos, who is 
also the Chair of the Subcommittee on General Farm Commodities 
and Risk Management. You are now recognized for 5 minutes, Mrs. 
Bustos.
    Mrs. Bustos. All right, thank you so much, Mr. Chairman, 
and I really appreciate you holding this very timely hearing 
today. I want to thank all of our witnesses for your testimony 
also. Let me start by saying, Mr. Wells, welcome to a fellow 
Illinoisan. It is great to have you here with the Agriculture 
Committee. Now, in your testimony you mentioned the dire state 
of disrepair that our rural roads and our bridges are in, and, 
believe me, I know exactly what you are talking about. I have 
this 14 county, 7,000\2\ mile district, and when I am driving--
whether it is Joe Davis County, to the far northwest corner, or 
whether it is down to Mercer County, one county south of where 
I am, I am driving a lot of miles over these roads and these 
bridges, and see the desperate need for revitalization.
    Obviously, it is not just you and I who experience how bad 
our hard infrastructure is. I hear it over and over again from 
our family farmers, who are really just trying to get their 
goods from one end of the district to the other, from one part 
of the state to the other, or whether it is--to get their 
commodities over to the Mississippi River, whether they are 
crossing the river to go into Iowa, whether they are sending 
their commodities down the river through our locks and dam 
system.
    And really, with each year that goes by, our roads, and our 
bridges, and our locks, and our dams, you look back--especially 
the locks and dams built during the Depression Era, but 
everything is getting older and older, and it becomes that much 
more difficult for our ag producers to get their goods to 
market. So, Mr. Wells, can you speak on the impact that the 
bipartisan Infrastructure Investment and Jobs Act (Pub. L. 117-
58), the $150 billion investment in that for roads and bridges, 
or the nearly $20 billion investment in our waterway 
infrastructure, how will that impact our farmers in a region 
like ours, since you know Illinois well?
    Mr. Wells. Yes, thank you, Congresswoman. We support that 
Act. As you so eloquently stated, the roads and the bridges in 
Illinois--I travel a lot across the Midwest, and other areas, 
and I have to say that ours win the prize, potentially, for 
being in disrepair. As you mentioned, the locking system is 
critical to the flow of goods and services to our customers, 
from fertilizers coming upriver, as you know, to grains going 
back down the river. So, we are supportive, we think that will 
be a great start, and we appreciate the support on the 
infrastructure.
    Mrs. Bustos. Absolutely. Can you talk a little bit about 
how these investments in our infrastructure will translate into 
food and agricultural supply, that the supply chain investments 
are--and what we are facing with our supply chain issues right 
now?
    Mr. Wells. Yes. It--you know, farming is very time 
sensitive, right? And so, as we ship products upriver, it is 
imperative that we have adequate locks and dams to get products 
to the right place at the right time. Some of our locks are not 
very far away from a catastrophe that would just totally stop 
transportation on the river, and would lead to critical 
shortages of fertilizer products, and the same going downriver. 
We rely heavily on that river system to get products to the 
market, to get products to the Gulf, and so any breakdown in 
that system could be catastrophic to our producers and our 
farmer-owners.
    Mrs. Bustos. Yes, to the tune of billions of dollars. I 
have a minute 20 seconds left. I would like to take the rest of 
my time to address some troubling issues that were raised in 
testimony today. I certainly agree that the issues that our 
entire ag and food supply chain face are serious. We know that, 
we are seeing that. I look forward to continuing to work with 
those on this panel, our witnesses, our colleagues on the 
Agriculture Committee, and, of course, with the Biden 
Administration to find solutions in a timely and an effective 
manner.
    But, we have heard from our tremendous panel of witnesses 
about a bunch of issues that our food and our ag supply chain 
face, including trucking, that Mr. Johnson was just asking 
about, shipping slowdowns, I mean, global commerce, increase in 
input prices, the labor shortages that we are all hearing 
about. I do find an issue with the Renewable Fuel Standard part 
that was talked about earlier. I think it is shortsighted. 
Intentionally undercutting demand for domestically produced 
biofuels would pull the rug out from beneath our corn and our 
soybean growers and create a whole new cascade of supply chain 
issues in our food, fuel, and fiber sectors.
    So, I just want to say this Committee needs to focus on 
solutions for the wide array of issues that we are discussing 
today, rather than on stopgap measures that could end up doing 
more harm than good, and I just wanted to make sure that I 
addressed that. With that, with my 11 seconds over, I will 
yield back. Thank you so much.
    The Chairman. Thank you, Mrs. Bustos. And now I recognize 
the gentleman from Indiana, Mr. Baird. You are recognized for 5 
minutes.
    Mr. Baird. Thank you, Chairman Scott, and Ranking Member 
Thompson. I really appreciate having this hearing. And, I 
really appreciate all the witnesses here. I mean, you bring the 
ideas, and you cite the main parts of our supply chain that 
have been disrupted in the last year or so, and so that is 
really beneficial to us trying to make decisions, so I thank 
each and every one of you for being here and sharing your 
concepts with that.
    But, Mr. Schwalls, in your comments, you mentioned the 
increasing costs and shortage of inputs like fertilizers and 
crop production tools, and I can appreciate that. These 
disruptions are very concerning to me, particularly as I 
similarly continue to hear from our farmers in my district, who 
are concerned about the increasing input costs, and the 
decreasing margins, and unfortunately compounding the supply 
chain troubles, we now hear that the Administration and the EPA 
have begun revoking some of the key crop protection tools and 
the pesticides for the U.S. agriculture.
    And so, as Mr. Wells mentioned in his testimony, in August 
the EPA made an overly conservative decision to revoke the 
approval of chlorpyrifos for use on food products, and 
unfortunately, the decision was made despite the agency's own 
findings, and that the product does not pose potential risk for 
concern and backed up by U.S. Court of Appeals ruling. So, Mr. 
Schwalls, can you share your perspective about--and this is 
just one example, but how the impact of regulating this 
pesticide, as well as others, will further compound the supply 
chain issues for producers? You care to elaborate on that?
    Mr. Schwalls. Yes, sir, thank you, chlorpyrifos is a very 
important chemical used in the ag industry, from pecans, to 
onions, to corn, cabbage. It is widely used, and has been for 
30 or 40 years. The main food my family eats is--comes from 
the--our--from our farm, and chlorpyrifos is a chemical that we 
do use. It is a crop protectant that we have been using for 
years and years. So, while I obviously do not feel like it 
poses a potential risk of concern, and it ended up--the fact 
that my family is eating the food produced on a farm that is 
using chlorpyrifos, now I do err on the side of caution, but I 
follow the science and the research.
    For our company, we constantly run trials on different 
seeds, growing practices, and crop protection practices, so any 
changes made by the EPA would need to be trialed and tested on 
the farm level to see what the result of those changes would 
have on efficacy, crop quality, nutrition, and yields before we 
would need to make a transition to any other crop protection 
products.
    Mr. Baird. So, I appreciate your comments, and you know I 
am a very science-based individual, and I think that is 
important in the decision-making process. I am not sure that we 
used the appropriate science to make those kinds of decisions, 
and so if anyone else--any one of the other witnesses would 
like to make a comment in this regard? I think I have about a 
minute and 20 seconds left, so you can make your comments.
    Mr. Wells. Well, I would just add that farm plans are made 
well in advance of the growing season, so growers are sitting 
down and making those plans today, and so having consistent 
science- and risk-based methods of evaluating those products to 
ensure that we have a steady supply and access to them is 
really critically important. Uncertainty, marketplace 
disruptions, just make it very difficult to plan, and in some 
cases, there may not be alternate products that fit the need 
that the growers have for the product that was evaluated, and 
potentially canceled.
    Mr. Baird. Thank you. I have about 30 seconds left. Anyone 
else? If not, I really appreciate your thoughts and your 
perspective, and I appreciate you being here, testifying to 
this Committee. And with that, Mr. Chairman, I yield back.
    The Chairman. Thank you, Mr. Baird. And now I recognize the 
gentleman from Arizona, Mr. O'Halleran. You are now recognized 
for 5 minutes.
    Mr. O'Halleran. Thank you, Chairman Scott, and Ranking 
Member Thompson, for holding this important hearing today. And 
I am sitting here looking at my remarks, and then I thought, 
what a surprise. We are surprised that we don't know that our 
ports haven't been in good shape for the last 20 years? Are we 
surprised that the truck drivers across this country--that we 
have had a shortage even before the pandemic? What else have we 
been surprised about? That our roads are not in good shape? We 
as a Congress, we as a country, have to start looking forward 
aggressively, making sure we don't deal with just a crisis, but 
looking forward into our future.
    The pandemic has tested our food supply chain. Thanks to 
the work of many companies, and their essential workers, we 
were able to get through that. There were some stocked shelves 
that weren't stocked in a while. We also had to bring the 
National Guard in, but it happened, and people did not have to 
starve to death in our country. I am concerned that if we do 
not address the potential choke points that have emerged in our 
nation's food supply in the coming months, we remain at risk 
for potential shortages during future national emergencies.
    And also, it is not just about food. It is about everything 
that goes into the core of allowing farms and the agricultural 
industry to work. The pandemic showed that our supply chain is 
overly dependent on foreign adversaries, like, China. Moving 
forward, we need to ensure that our supply chain is secure, to 
ensure that we do not see disruptions and delays in getting 
Americans the food and other necessities that we depend upon.
    I am also very concerned about the increased food costs we 
are seeing. This impacts families, it impacts restaurants, it 
impacts the fabric of our communities. These problems are 
compounded for Americans who live on Tribal reservations or in 
rural communities. Congresswoman Bustos highlighted the roadway 
system. The cost of traveling right now because of gas prices 
is a tremendous cost to rural areas and Tribal lands. For 
instance, nearly 25 percent of Native Americans are faced with 
food insecurity. 15 percent of rural Americans are food-
insecure as well. Price pressures will only further harm these 
rural and Tribal communities, in which most of Arizona's first 
district is comprised of. It already is struggling to assess 
healthy and nutritious food to feed their families.
    Americans who live in rural and Tribal communities are 
already prone to pre-existing health disparities like diabetes. 
Access to high quality food is absolutely critical in these 
areas, and I would like to work with the panel on some other 
solutions on these issues.
    Mr. Durkin, southern Arizona has a number of dairy farms, 
that I know supply many American dairy producers. Can you talk 
through some of the supply chain issues that you are seeing in 
the entire dairy industry, from the farmer to the end consumer?
    Mr. Durkin. Yes. Well, the supply chain issues that we have 
talked about, I, again, express all the perspectives that my 
fellow panelists have had. Everything from the trucking side, 
to--we have had issues just recently where we have had to defer 
some milk coming into our plants because of unavailability to 
have truck drivers available. You take the truck driver 
availability, and then the equipment unavailability, per se, 
are all interrelated, when even you then get to the port issue 
that I focused on heavily at this hearing. When that equipment 
gets tied up, that causes backlogs in the entire industry, so 
it follows through the entire supply chain. So, whether it is 
an equipment issue, a personnel issue, that--all that--it just 
is a circular thing that you don't seem to be able to get out 
of. So, the issues that we have talked about, and the solutions 
that my fellow panelists have also talked about, and myself, 
are clearly needed, and needed now.
    Mr. O'Halleran. Are you surprised at all that we are in 
this situation, based on the years of addressing the import and 
export markets, and not doing it correctly, and also the state 
of the infrastructure in our country?
    Mr. Durkin. So, I would say I am surprised to a point, that 
it is as deep of a crisis that it is actually at. We have 
started to raise the issue back at the first of the year, 
probably even a little bit before that, as we started to see 
things happening, but I would argue we are at a point where--I 
know things were talked about, and I was on a panel discussion 
with--just a couple weeks ago on this specific issue, and they 
had the head of the Long Beach Port on that panel, and actually 
he had recommended 24/7 actually back a couple of years ago. 
So, this is something that we foresaw coming in. Obviously, 
nobody saw a pandemic that was about to hit us, so that clearly 
has exacerbated the issue, but certainly there were warning 
signs that this was on its way.
    Mr. O'Halleran. Thank you very much, and, Mr. Chairman, I 
yield back.
    The Chairman. Thank you, Mr. O'Halleran. And now I 
recognize the gentleman from Ohio, Mr. Balderson. You are now 
recognized for 5 minutes.
    Mr. Balderson. Mr. Chairman, thank you very much, and I 
want to thank all of you for being here today, and I want to 
thank Chairman Scott and Ranking Member Thompson for doing this 
important hearing. My direction goes towards Mr. Samson. Mr. 
Samson, I hope everyone participating in this hearing 
understands just how important the DRIVE-SAFE Act is, as it 
serves to address both the supply chain crisis and the ongoing 
shortage of qualified truck drivers. I was proud to offer this 
bill as an amendment during the Transportation and 
Infrastructure Committee's markup of their transportation bill 
last Congress, and also this Congress. It is clear that the 
trucking industry needs our help, but I am hoping you can touch 
on what ATA and the industry is doing to recruit and retain 
truckers on their own. And I know you have spoken a little bit 
about it, but if you could just give a couple other things, 
that would be great.
    Mr. Samson. Thank you, Congressman, and thank you for your 
support of DRIVE-SAFE Act, something that we have been working 
closely with your office and others to try to recruit these 
younger folks into the industry. I think we have touched on it 
a little bit today, but we are trying to incentivize not only 
new drivers to come in, but also retain, and the Chairman noted 
the high turnover rate at the beginning of the hearing. We have 
benefits, we have higher salaries, we have flexibility. We are 
really attempting to educate those that are coming into the 
industry how great of a potential career that this is, and so 
we are working closely with them in order to do that.
    Something we haven't touched on today is a significant DMV 
backlog of CDLs that we are trying to loosen up, and get that 
process started to get it back operating at the top efficiency, 
and so that is another piece that we have not quite touched on, 
but I think is very important here as well.
    Mr. Balderson. That is great that you did that, and we are 
going to touch on that in just a second, but I do want to do a 
follow up, and just make sure everyone is aware, the Wall 
Street Journal did a video on their website yesterday that 
discussed the benefits and bonuses that trucking companies are 
offering to new and existing employees, and I encourage 
everyone to watch that.\3\
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    \3\ Editor's note: the video referred to is retained in Committee 
file.
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    Mr. Samson, as you just started to state there, during the 
onset of the pandemic the Trump Administration acted quickly to 
put in place a variety of waivers for CDL and CLP holders to 
ensure trucks were able to deliver critical supplies, such as 
PPE and medical equipment, and food on time. Can you discuss 
some of the waivers you felt had the biggest impact in ensuring 
timely delivery of goods over the pandemic?
    Mr. Samson. Of course. Yes, no, we had a handful of ones 
that were very positive towards the industry on obtaining CDLs. 
There were certain things that were waived from the DMV 
standpoint that allowed us to get quicker access to those, and 
now, since then, we have continued to see the backlog start to 
pile up. But during the process, we were able to obtain CDLs a 
little bit more efficiently. Some of the other declarations 
that were put out there, one of them, of course, was on the 
weight side. They were allowed--provided the states to increase 
weights to get certain products from A to B, which, of course, 
with a driver shortage, with an equipment shortage, that 
allowed us to increase our productivity over the course of the 
pandemic as well.
    Mr. Balderson. Okay. And my follow up to you, do you think 
extending some of these waivers through the duration of the 
supply chain crisis would be helpful?
    Mr. Samson. I do, and I think my colleague Mr. Ferrara 
would agree, especially on the foodstuff side of things, the 
livestock side of things. We know we have had a gas and oil 
issue as well, and so far throughout the pandemic it seems like 
these have been extraordinarily helpful to the industry, and 
also come across as very safe and efficient so far as well.
    Mr. Balderson. Thank you for your responses, Mr. Samson. 
Mr. Chairman, I yield back my remaining time. Thank you.
    The Chairman. Thank you very much. And now I recognize the 
gentleman from California. Mr. Carbajal is recognized for 5 
minutes.
    Mr. Carbajal. Thank you, Mr. Chairman, and thank you to all 
the witnesses being here today. The COVID-19 pandemic has 
disrupted every aspect of our lives, and has created supply 
chain disruption, as many of you have touched on, including 
container shortages and shipping delays. The agriculture sector 
is especially impacted by these delays, including producers in 
my Central Coast District. As Chair of the Transportation and 
Infrastructure Subcommittee on Coast Guard and Maritime 
Transportation, I am actively exploring ways to address this 
issue with my colleagues.
    Mr. Schwalls, have you been forced to take on certain costs 
or losses associated with crops arriving in poor condition due 
to delays and congestion? And what types of policies from the 
USDA or Congressional action would be helpful, from your 
vantage point, to address these added challenges in the market 
for fresh, frozen, and processed fruits and vegetables?
    Mr. Schwalls. Well, thank you. Yes, sir, we have a lot of 
challenges with the supply chain that--and it has caused 
disruption, and caused a loss of crop and yield. And when you 
consider the fact that all of the agricultural costs go in 
and--on an acre basis, and all of the returns come back on a by 
the box, or by the ton, or whatever particular commodity it may 
be--so it is--the input costs are pretty much identical, 
regardless of the yields. So, when we are able to have a better 
crop utilization, obviously it lowers the impact of the costs 
of the product that is being grown, and also the amount of land 
that is required to grow that crop.
    So, we think that there is a tremendous amount of 
opportunity, looking forward, for food security and safety for 
the American public for--utilize different things like fresh 
frozen, fresh prepared, where we could add shelf life and 
stability to the food supply chain. Many of the commodities, 
especially in the fruits and vegetables industry, those are 
seasonal commodities, so they are not readily available. 
Someone was thinking earlier, a Congresslady, I believe, about 
buying local and locally sourced, and that is true, but there 
is a tremendous amount of time of the year where products are 
not available local. They are only available in the areas 
where, obviously, they have a growing season at that time.
    And the crop utilization during those times could be spread 
out a lot to cover the rest of the year, because there is a lot 
of waste that goes in as--where the--a situation where, 
essentially, unless the product is flawless, especially not 
being able to use on a retail basis. And--so we are having to 
find--subvert areas to use that, such as food service, which we 
all know that that had a massive increase during COVID, and it 
is--that industry is still greatly off today. So, we need to 
re-look at how are we utilizing the products that are being 
grown now, the crops that are being grown, and how to further 
increase the shelf life and the--so that we can take an 
approach that gives greater security to food stability for the 
people of the nation.
    The Chairman. Does the gentleman have additional questions?
    Mr. Carbajal. Yes. I am sorry, I was muted. I just wanted 
to say thank you to Mr. Durkin for meeting with me this week, 
and I appreciate him being a witness today. Mr. Durkin, I know 
you have already addressed these questions, but if you can 
expand on them a little bit more, I would appreciate it. How 
long has ongoing port congestion affected food and agriculture 
trade involving either U.S. imports or exports, from your 
vantage point?
    Mr. Durkin. Yes. I think the impact is that--as I mentioned 
just a few minutes ago, it has gone back--we noticed the 
increase back in the, what I would call late 2020, when it 
started to really see the impact, and really became acute right 
at the end of the year to the beginning of the year of 2021 and 
has gotten continually to get--what I call worse, and 
maintaining.
    The unfortunate part about this is, given the current 
situation from a--operating from a--whether from a shipping 
reform--things that we are looking to do in the Ocean Shipping 
Reform Act, as well as, I know, the 24/7, we are 6 to 12 months 
out before any of those things will have an impact on our 
ability to reduce the backlog on those ports. That is the 
concern. My hope is that the Committee, and obviously Congress, 
is that we can enact some of these things either through other 
types of bills, or Executive Orders, or what we need to do to 
address the situation immediately.
    Mr. Carbajal. Can you also touch on how your company has 
been personally impacted with increases in transportation 
costs, and how it is affecting your market share in other 
countries?
    Mr. Durkin. Yes. We are actually seeing--basically talking 
about millions of dollars. We saw, in 2021, a $25 million 
increase in terms of our freight and transportation costs. That 
is going to be another $25 million going into 2022. Throw on 
top of that the potential loss from a customer standpoint, 
given the inability to get some of our products to our 
customers. That is the concern. Short-term abilities on the 
freight and storage, the longer-term impact to not only us, but 
the rest of the dairy industry, on ability to--losing customers 
to potentially other dairy exporting countries.
    The Chairman. The gentleman's time has expired. I now 
recognize the gentleman from Texas, Mr. Cloud. You are now 
recognized for 5 minutes.
    Mr. Cloud. Thank you, Mr. Chairman, and I do appreciate 
your comments at the beginning of this hearing to highlight 
that we are leading the world in ag, and that we have a great 
nation. We certainly do. The U.S. ag industry leads the world, 
really, in innovation over the last year. As we have seen the 
inputs decrease, and the outputs increase, that is a wonderful 
thing not only for the industry, but just for the world's food 
supply at large. In spite of that, we are looking at what some 
people have called the most expensive Thanksgiving ever.
    Mr. Schwalls, you mentioned in your statement some of the 
costs that you are seeing. Could you kind of relay that to us 
again, some of the costs you are seeing, and what you are 
dealing with?
    Mr. Schwalls. Yes, thank you very much. Increase in costs, 
the main components--we have three essential costs in the fruit 
and vegetable industry, from our perspective. We have a growing 
and production cost, then we have the packing cost, and then, 
of course, we have the transportation cost. The vast majority 
of the products that we sell to retailers, we deliver. So, we 
do absorb a tremendous amount of that cost. A lot of the 
products that we are selling are on contract with programs 
where the prices are locked in, and we take into account the 
cost of the transportation prior to that. But there is no way 
to track those numbers now, and so we have to absorb the 
increase in the transportation costs----
    Mr. Cloud. Right. Yes, go ahead.
    Mr. Schwalls. Sorry. So, we are absorbing the 
transportation costs. Then, as far as the field input costs, 
fertilizers being--are moving--we had another six percent 
increase, I believe it was yesterday, on fertilizers. Those are 
currently up 35 percent year to date. The extra products up 25 
percent, with fuel being a massive increase force at 48 
percent.
    Mr. Cloud. Right.
    Mr. Schwalls. We need some significant areas, obviously, 
and the majority of this stuff is affected directly by 
transportation. If we could have----
    Mr. Cloud. Yes. You mentioned fertilizers 35 percent, crop 
protection products 25 percent, fuel 48 percent, mulch and drip 
tape 35 percent, packing supplies 30 percent, refrigerants 20 
percent, freight 40 percent. It occurs to me that the vast 
majority of those things, probably 80 percent of it are either 
products or byproducts of the oil and gas industry, and we have 
seen, for the last few months, really, an attack against the 
oil and gas industry here in the United States, while promoting 
it overseas, even begging OPEC to produce more. I think that is 
kind of a backwards approach to it. It is important that as we 
continue to move towards a cleaner air, cleaner water, brighter 
future, that we do so in a sensible and responsible way, and 
not one that increases food costs for our families.
    I wanted to talk a little bit about the trucking issue. It 
has been talked about a lot, but one little thing I wanted to 
key in on is that I noticed that California, they have 
implemented a law restricting gig workers and independent 
contractors. This has notably--my understanding is that it has 
reduced the workforce, specifically truckers in California. 
They are also considering moving everything away from diesel 
trucks in short order. I am curious about what this would do. 
Right now, we have a major Federal investment in the ports in 
California, we have a major Federal investment in the highways, 
under the assumption that we are going to be using these ports 
not only for the region of California, but as a gateway to the 
food supply and resources for the entire nation, and it is 
curious to me that California would present a stranglehold on 
the U.S. economy in that way, and that might be something worth 
a discussion later on.
    But I wanted to ask--I think, Mr. Cinco, you had mentioned 
in your testimony the vaccine mandates, and some of the issues 
were involved in that when it came to workforce right now. We 
have a number of issues with workforce. Some have been 
discussed already, some of the policies implemented under COVID 
that have kind of outlived their usefulness in keeping workers 
at home. Could you speak to that, please?
    Mr. Cinco. We are very fragile with our workforce right 
now. We have shut down lines specifically to--when you are 
short people, we just scavenge lines together and shut lines 
down. I think if these mandates come into effect now, before 
the holidays, it is going to make it even worse. This is, like 
you said, the most expensive Thanksgiving in history, and to 
make bread, and buns, and things for actual Thanksgiving, 
stuffing bread, stuff like that, we are not going to be able to 
produce a lot of that product if they have these mandates 
because we, like, every other industry, have--40, 50 percent of 
our workforce is vaccinated, and the rest of them are not. And, 
as I have heard before, I don't think there is going to be a 
lot of people running to go get vaccinated if you get mandated. 
So that is just going to cut into our workforce, and make the 
fragileness expire.
    The Chairman. Thank you. The gentleman's time has expired. 
I now recognize the gentleman from California, Mr. Harder. You 
are recognized for 5 minutes.
    Mr. Harder. Thank you, Mr. Chairman. I want to begin by 
thanking Chairman Scott and Ranking Member Thompson for hosting 
this hearing on the critical issues around our food supply 
chain, and thanks also to all of our witnesses for joining us.
    I represent California's Central Valley. We are the fruit 
and nut basket of the world, and we make our living selling our 
produce in every corner of the globe, and that means we 
actually have to be able to actually get our products there so 
they can be consumed around the globe. So today I would like to 
focus my remarks and questions primarily on the portion of the 
supply chain that has been top of mind for every one of my 
producers, processors, and distributors.
    For the last few months, I have been closely monitoring the 
disaster unfolding at our ports. In 2 months alone last year 
shippers rejected more than 177,000 crates of American 
products, instead sending empty shipping containers back to 
China to be filled with Chinese goods. When I talk to farmers 
and ranchers in my community, they tell me it is taking weeks 
longer than normal to get their products onto a truck, to the 
port, and onto a ship. Each one of those delays hits their 
bottom lines at a time when they simply can't afford it.
    And to make matters worse, ports like the one in Long Beach 
are seeing huge backups in part because they have local rules 
that prioritize beachfront views over actually getting crates 
in and out of the door every day. All of that together means 
the farmers and ranchers in my community, really the backbone 
of our entire economy, are losing money every single day. When 
the supply chain fails, it hits our community first, and it 
hits us the hardest. That is why I am working with my 
colleagues, and Representative Garamendi on his bipartisan 
bill, to update our global shipping regulations to combat 
China's influence on international shipping, as well as working 
with the letter of my Agriculture Committee colleague, Mr. 
Dusty Johnson, that urges the Department of Transportation to 
implement the Congressionally authorized Under-21 Commercial 
Driver Pilot Program to get more truckers onto the roads.
    So, my first question is for Mr. Durkin. Mr. Durkin, as the 
President and CEO of Leprino Foods, which I know well, given 
their presence in my district, it would be helpful to hear 
directly about how the dairy industry specifically has been 
impacted with the ports and supply chain backups in California. 
What has been the biggest challenge, and where exactly could 
Congress be a better partner to you?
    Mr. Durkin. Yes. The biggest challenge, obviously, is 
getting all of our products loaded onto a ship, and getting out 
to all the countries, and to our customers where we need to 
have that put. Everything from having a right, as we talked 
about, from a trucking standpoint, getting it to and from the 
ports, but when we have bookings that get rolled multiple 
times, as I put in my testimony--and one, as an example, we had 
over 100 bookings this past year that were rolled 17 times. 
That created a 5 month delay, not just weeks. At this point we 
would be happy with weeks, but months it actually really turns 
into significant issues for not only Leprino, really the dairy 
industry as whole.
    And I know that working with California dairies who, 
surprise, supply a lot of our milk in the State of California, 
they are running into the same issues as well, so clearly the 
Ocean Shipping Reform Act, and what it has done in terms of 
putting guidance over the empty containers that go back, 
obviously, and the demurrage fees and excess charges that 
happen would be significant, and a big help for both dairy 
companies, as well as all of agriculture, so we are excited 
about that, and anything we can do on the 24/7--but our biggest 
concern, really, is the timing of this. As I mentioned earlier, 
we noticed this issue back in January, where it really got to 
be a significant issue. We are now really getting to where this 
is almost a year later, in terms of this. So anything we can do 
to get that Ocean Shipping Reform Act passed quickly would be 
helpful.
    Mr. Harder. Thank you. I agree. Urgency is imperative here. 
It has already taken a lot longer than it should have. Thank 
you for that. My second question is for Mr. Samson. Mr. Samson, 
I am very glad you are here to share your testimony and 
demonstrate how important it is not just to grow and sell our 
ag commodities, but to get them from point A to point B, and 
beyond. Anybody who lives in our area, and drives down I-5, or 
Highway 99, every day knows how important trucking is to our 
region. I have heard from you that we have 80,000 drivers short 
of where we need to be right now.
    In my district we have programs that actually train 
students so they can graduate directly from high school into 
the trucking business, but they can't actually take a lot of 
jobs because they are not eligible until they are 21. I don't 
think that makes a whole lot of sense. As I said, I am working 
with my colleague, Dusty Johnson, to try to make sure that we 
are reforming these Federal rules. But I would love to hear 
from you about what else we can do in Congress to address the 
shortage that we are seeing in the trucking industry.
    Mr. Samson. To give you a quick example--and thank you, 
Congressman--out of your district, we have a handful of great 
members out of the Central Valley, and earlier this summer, 
when they started harvesting carrots and other produce out of 
the Southern Valley--or the Central Valley, they were running 
into, of course, the driver shortage--and getting the products 
harvested and to the processing plant. And so, we were working 
with Governor Newsom, and Caltrans, and this body as well, to 
try to see if we could get some increase in truck weights just 
until we got through that harvest period.
    And so, we constantly are trying to focus on what can we do 
in the near-term as we know these commodities are either 
harvested in short order, or they are going to be tilled back 
under, and left behind. And so, we try to figure out how we can 
best focus on these as we are moving forward, and we were able 
to do that outside of your district as well.
    The Chairman. Thank you. The gentleman's time has expired. 
Now I recognize the gentleman from Iowa, Mr. Feenstra, for 5 
minutes.
    Mr. Feenstra. Thank you so much, Chairman Scott, and thank 
you, Ranking Member Thompson, for holding this hearing today on 
the national food supply chain, and the concerns that we have. 
I represent the 4th District in Iowa. This is probably one of 
the largest ag industries in our nation. We are number one or 
two when it comes to soybean and corn production. And, with 
that, I would like to address a concern regarding fertilizer 
costs.
    This has been brought up already, but I would like to ask 
Mr. Wells, some of our farmers who have been able to guarantee 
fertilizer availability for next planting season have also 
reported prices being quoted to them that are six times higher 
than 2021. Mr. Wells, can you shed any light on the main 
factors that are driving this dramatic increase, and is there 
any way that we can mitigate this as we move forward?
    Mr. Wells. Yes. Speaking specifically to a couple of 
products, nitrogen and phosphate, one of the feedstocks and one 
of the catalysts to make the products are natural gas, and, of 
course, everyone knows the impacts to the energy complex. We 
have talked about that. Natural gas has skyrocketed in price, 
and it directly impacts the prices of those particular 
products. And so, if you take into account weather--Hurricane 
Ida shut down a significant amount of production in the State 
of Louisiana, which took tons out of the marketplace, 
transportation costs, getting things in a timely fashion, it 
has just been--I hate to use the term perfect storm, but it has 
been a perfect storm of high input costs, high transportation 
costs, shutdowns. There have been a number of turnarounds 
related to COVID that were delayed that took tons out of the 
market, so there are a number of factors that have led to the 
increase in prices.
    Mr. Feenstra. Absolutely, and that is what we are seeing, 
and my greatest fear is what this does for the future, when you 
have our producers putting in their corn and soybeans this 
spring, obviously, that input cost goes directly to them, but 
it also then--hopefully it will--through the commodity prices 
will get--will increase, and then that cost gets passed on to 
the consumer. Do you also see these mitigating factors--I mean, 
is this a concern for you also in what you see as we move 
forward in the food supply chain?
    Mr. Wells. Can you state that again, please?
    Mr. Feenstra. Yes. I was just wondering, if you look at 
future yields, and future crop production, and things like 
that, I mean, is there a concern where we are--have such 
increased costs when it comes to fertilizer?
    Mr. Wells. Yes. Obviously, anytime you have dramatic 
increases in costs for the farmer, it leads to widespread 
concern. Farmers, as has been stated, buy at retail and sell at 
wholesale, so they are kind of caught in the middle of all 
that, and so they have to accept prices given to them on the 
retail side. Yes, we are concerned about that.
    Mr. Feenstra. Yes. It is very significant, I agree. I want 
to address a comment made earlier by Mr. Cinco regarding the 
Renewable Fuel Standard and biofuels impacting soybean oil 
prices and availability. You think about over the last decade, 
soybean production and processing capacity has grown 
dramatically, significantly. In fact, October, the WASDE Report 
forecast soybean production at 4.4 billion bushels. That is up 
74 million bushels from the year before, based on the higher 
yields. While our farmers are projected to produce a record 
crop this year, the biodiesel and renewable diesel industry are 
using approximately the same amount of soybean oil that they 
did compared to last year at this time.
    So, my question, Mr. Cinco, is, were your comments 
subjective? I mean, it seems like you are going after the 
biofuel industry, and I would need to ask you that question, 
why?
    Mr. Cinco. Actually--so the way it is for me, I buy soybean 
oil twofold. I buy it on the market commodity, and then there 
is the basis, which is the transportation, refining, and all of 
that. Last November, typically for us it is 10 a pound. It 
went to 54. You cannot get quotes from vendors that you don't 
do business with, competitive quotes, because they don't have 
the capacity to do that. They are telling us the shortage will 
be the next 6 months for sure. The refining capacity is at a 
premium right now.
    The refiners are actually going to build more capacity, but 
it is not supposed to go online until 2023. They are telling us 
that next year is going to be a terrible year. My prices of 
soybean oil have tripled from----
    Mr. Feenstra. I guess thank you for those comments, but I 
see it a different way. I mean, biofuels obviously, just like 
everybody else, have dramatic input costs, transportation and 
all these things, and I just don't think that we need to wreck 
an industry that is providing a great----
    Mr. Cinco. I am not saying to wreck it, I am saying delay 
it, because right now there are companies that I am hearing 
that have booked their soybean oil for the quantities that they 
need for a quarter, and they want it on June 3, but it is not 
showing up until June 6 because there is no drivers, the 
refining capacity they are----
    Mr. Feenstra. Yes.
    Well, I appreciate your comments, Mr. Cinco. Thank you so 
much, and these are all big issues. And I am obviously very 
passionate about the ag industry, and how it affects Iowa. 
Thank you, Mr. Chairman, and I yield back.
    The Chairman. Thank you. Now I recognize the gentlewoman 
from Iowa, Mrs. Axne, for 5 minutes.
    Mrs. Axne. Thank you, Chairman Scott, and I want to echo 
the words of my fellow colleague from Iowa, Representative 
Feenstra, in talking about our farmers. So, before I get to my 
questions for our witnesses here, I would like to ask for 
unanimous consent to submit an op-ed from American Soybean 
Association CEO Stephen Censky. Mr. Chairman?
    Voice. Without objection----
    The Chairman. Without objection. I am sorry.
    [The op-ed referred to is located on p. 137.]
    Mrs. Axne. Thank you. Mr. Censky's op-ed corrects the 
record on some misconceptions about soybean oil production. I 
want to let folks know, as Representative Feenstra said, our 
farmers are working hard to harvest a record soybean crop this 
year, producing more soybeans with less land and energy use, 
and we will continue to meet the needs of consumers to feed and 
fuel the world. And now the new markets for domestic soybean 
oil are translating directly into new investments in soybean 
crush capacity across the Midwest, which means more money in 
rural economies, like those here in Iowa, and more return for 
Iowa farmers, and more protein and oil for use by America's 
food processors. So, any suggestion to reduce the amount of 
biodiesel blended in our nation's fuel supply isn't based on 
facts, and will work against, unfortunately, our farmers, our 
rural communities, and our climate objectives.
    Now, I am thankful to the Chairman for holding this 
hearing, as the effects of COVID-19 pandemic continue disrupt 
our nation's supply chain, leading to bottlenecks, and, of 
course, to delays and uncertainty. As consumer habits have 
shifted in response to the pandemic, we have seen a drastic 
increase of imports into the United States, which has been 
overwhelming our supply chain, and exacerbating infrastructure 
issues.
    I strongly urge my colleagues to support the Infrastructure 
Investment and Jobs Act because it is a bipartisan legislation 
to help us provide significant and long overdue investments in 
our crumbling infrastructure. And as many of our witnesses have 
testified, this legislation will address years of 
underinvestment, and allow us to meet the needs of the future. 
So, I appreciate the President's leadership in developing the 
Build Back Better agenda to help grow our economy, and create 
good paying jobs. Our witnesses have also pointed to specific 
legislation before this Congress that will address specific 
issues within the supply chain, and I look forward to hearing 
more about that.
    So, Mr. Durkin, my question--as my State of Iowa is our 
nation's second largest exporter of ag products, I am concerned 
about how some foreign-owned shipping companies are essentially 
dictating trade. They are bringing in imports into our ports, 
but yet they are leaving with empty ships, without our products 
being exported on them. This is very contrary to standard 
import/export trade. Can you elaborate on your testimony on how 
the Ocean Shipping Reform Act can address this problem, and 
other solutions that we might act on here in Congress?
    Mr. Durkin. Two of the key components of that shipping 
reform bill, one is that it would put a limit on terms of the 
empty containers that are going back. There was always a 
portion of that did go back--given the import/export imbalance, 
but that number was at around ten percent prior to COVID, and 
now we are at 70 percent, so there clearly is an issue that has 
kind of escalated to a point--where I call this, obviously, is 
a crisis. And then the second component of that is when those 
orders get rolled, and we lose those bookings, as I mentioned, 
there are fees from--demurrage fees, and other excess charges 
that us, as well as other companies, have to handle. And I 
notice--that is a big component--a second component of the 
Ocean Shipping Reform Act that would help.
    And, again, I can't emphasize enough how quickly--if we can 
get this thing--get it kind of--I know it has bipartisan 
support, how quickly we can get this bill passed and approved, 
and I think that would be a big help.
    [The information referred to is located on p. 185.]
    Mrs. Axne. Thank you for that, and really appreciate that. 
Now, my second question, Mr. Samson, you noticed in your 
testimony the trucking industry needs about 80,000 more drivers 
to meet demand. I will tell you, I always have Iowans in my 
office on this issue. We know these are tough jobs, but they 
are critical to our nation. So, can you expand to us here what 
the industry is able to do to recruit workers so that we can 
better support those efforts?
    Mr. Samson. We are understanding that there is an aging 
workforce. We are understanding that COVID had a strain on the 
industry, an industry that really showed up, and kind of 
provided--that--they were heroes during the COVID pandemic. 
What we are trying to do is go out and recruit younger drivers. 
We are trying to diversify the workforce. We are trying to 
bring in those from the military. Women in trucking has been a 
big piece as well. That percentage continues to grow, 
incentivized through monetary, or benefits, or flexibility, and 
so there are multiple things that we are trying to focus on to 
make sure that we get these drivers into the industry, but then 
we also keep them as well, we retain those employees as well.
    The Chairman. Thank you. The gentlelady's time has expired. 
I now recognize the gentlelady from Illinois, Mrs. Miller, for 
5 minutes.
    Mrs. Miller. Thank you, Mr. Chairman. I have a question for 
Mr. Ferrara. Mr. Ferrara, in your testimony you mentioned that 
you have advocated for the government to help your member 
stores attract talent. How do you--or do you know offhand how 
many employees your member stores lost due to overburdensome, 
unconstitutional vaccine and mask mandates? And furthermore, do 
you think it would be helpful for the Federal Government to 
halt Federal COVID vaccine mandates and mask mandates?
    Mr. Ferrara. Congresswoman, first thing I would say is, we 
do, as an industry, support vaccines. We were a big part of 
helping get those vaccines into communities, and, of course, 
prioritizing our workers. The concerns that we have, for any 
mandate, particularly going into the holidays, are one, how is 
this going to be implemented, the impact, of course, it will 
have on our workforce, who is going to be responsible for 
testing, how are we accessing those tests, who is paying for 
the test, and then, of course, the penalties that these 
businesses could be fined, upwards of $13,000 in OSHA 
penalties. So that is obviously a concern up and down the full 
supply chain.
    I think our industry, again, has been very proactive in 
working toward incentivizing, and helping get those workers 
vaccinated, done clinics at their stores, at their distribution 
facilities, and we are committed to continuing to do those.
    Mrs. Miller. Okay. Thank you. And, Mr. Cinco, in your 
testimony you mentioned that an experienced workforce is 
leaving your industry at an alarming rate due to issues facing 
the world, new issues. Can you tell me how the COVID-19 vaccine 
mandates and mask mandates have impacted your workforce, and 
also, can you tell me how unemployment benefits, which have not 
had work requirements since March of 2020, how have they 
impacted your workforce?
    Mr. Cinco. So, the mask mandate issue, as I mentioned 
before--we are very fragile with the amount of people that we 
have, and if the masks and everything keep getting mandated, we 
are going to have less people showing up, because there is 45 
to 50 percent of us are vaccinated. We are not against 
vaccines, but we can't force it on our employees. At the 
holidays, it will be a complete catastrophe for us if the 
mandates are there.
    As for the unemployment benefits, I think it affected us 
because the wage difference between somebody who wasn't working 
and the actual pay that they would get if they were working 
didn't seem like it was fair. So, the difference between the 
two didn't measure up to what they were actually having to do 
in the bakery.
    Mrs. Miller. Yes. Yes, I agree. And, Mr. Wells, China is 
the leading producer of agriculture chemicals, and now with the 
ongoing trade, economic and defense tensions between our two 
countries, would you please describe the risk that U.S. farmers 
face from disruptions of critical production tools, and then 
also how can we begin to mitigate against this risk?
    Mr. Wells. Disruption in these critical production tools 
can, obviously, lead to delayed planning. If crop protection 
products are late to the market, it can obviously impact the 
control of weeds, and weeds compete with crops, and can reduce 
yields. And so, from multiple standpoints, it can lead to 
reduced productivity and reduced profitability, by extension 
for farmers, and it could also lead to higher food prices if 
less is produced. And so that would be most impactful, 
obviously, on people that can least afford it.
    Mrs. Miller. Yes.
    Mr. Wells. I think we can mitigate the risk by crafting 
policies that promote trade and ensure regulatory certainty for 
those who produce these pesticide products. The importance of 
good trade relationships can't be overlooked, as well as the 
certainty of the U.S. EPA's regulatory approval process that I 
touched on earlier. So those are some things to mitigate, and 
some of the impacts they could have.
    Mrs. Miller. Okay. Thank you. And I represent a highly 
productive district in Illinois, Illinois District 15. We 
produce a lot of soybeans, and, actually, my family, we are 
soybean producers, and it is actually--this is an alarming 
situation that we are in. Thank you so much. And I----
    The Chairman. Thank you. The gentlewoman from Washington is 
now recognized, Ms. Schrier, for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman. Well, supply chain 
dysfunction made worse by the pandemic was first brought to my 
attention over a year ago by hay farmers in Ellensburg, 
Washington. Since then, I have been in frequent communication 
with growers and exporters all around the 8th District, and 
even around the country, about these issues that they are 
facing, and I am hearing it from my colleagues as well. It has 
become more apparent to others.
    For more than a year, these farmers have shared with me how 
pandemic conditions, but also the behavior, the really bad 
behavior, of foreign-owned shipping carriers, you could almost 
refer to them as a cartel, are hurting their industry. They are 
threatening export markets, they are threatening relationships 
that have been built up over decades with foreign purchasers, 
and the costs and the availability of transportation to both 
domestic and export markets continue to be a big challenge for 
wheat, cherry, apple, pear growers, hay growers in my district. 
I would mention that, even with trucking, some growers in my 
district have said that the cost for a truck to the East Coast 
has more than doubled in the last year, and others say that the 
cost to move fruit just to a port to be loaded on a ship for 
export costs as much as the entire trip did just about a year 
ago. And a lot of you know this, because you are living it.
    There has been some discussion about the Federal Maritime 
Commission, and, Mr. Wells, in your testimony you talked about 
how it could be doing more to alleviate the backlog at our 
ports. I was wondering, because sometimes it feels like they 
just don't have the teeth to do what they need to do, 
especially since we have no American shipping companies to 
compete, I was wondering what teeth you think the Commission 
has, what more they can do to enforce rules, and in addition to 
the Ocean Shipping Reform Act of 2021, which I am proud to 
support, what else can Congress do to help?
    Mr. Wells. Yes, great questions. Frankly, I probably need 
to get back with you, Congresswoman, on that. I am not up to 
speed fully on the maritime and the port, given my central 
Illinois background. But if I could get written comments back 
to you, I can address that question at a later time.
    [The information referred to is located on p. 190.]
    Ms. Schrier. That would be amazing. Does anybody else have 
comments about that, as to, like, what--where is our leverage? 
What specifically can the Federal Maritime Commission do?
    Mr. Durkin. Well, obviously--Congresswoman, this is Mike 
Durkin. I think the--we--there are a fair amount of goods that 
come into the U.S., obviously, from an import standpoint. Our 
inability to--we--if you look at it from a leverage standpoint, 
there is clear leverage, so--with all the imports that are 
coming in, and I still think there is an opportunity, with the 
Ocean Shipping Reform Act, to make sure that those containers 
that aren't going back--when you think about 70 percent of 
those containers going back empty, it just is really hard to 
understand how we can let that happen; and, then, again, when 
that happens, and we have no control over that, and then fees 
are then charged to the exporting company as well, therein lies 
the double thing.
    Ms. Schrier. Okay.
    Mr. Durkin. So if you looked at, as I mentioned earlier, 
from 2020 through 2022, our freight and storage costs will have 
doubled, as a company, in 2 years. That is the effect that this 
is having.
    Ms. Schrier. It is unbelievable. And those D&D fees, they 
can't contest them, or they will be blackballed by the 
industry. I wanted to touch on two more items really quickly. 
One is I just wanted to talk about the school food supply. Over 
the past few weeks my office has heard from schools, and 
parents, and local officials throughout my district about 
insufficient food stocks in schools, and the inconsistent 
supply of school lunches. I just got an e-mail from my son's 
middle school the other day saying, ``Hey, we don't have enough 
food, if you can just send your kids with lunches, that would 
be so much better, it would take the pressure off.''
    The Washington State Office of Superintendent of Public 
Instruction raised similar issues and said that it could take 
up to a year for them to get the funds from the USDA's recent 
$3 billion announcement regarding supply chain issues, and so I 
just wanted to state that in upcoming weeks I will be sending a 
letter to USDA with some questions about how we are going to 
implement this, and make sure we can actually get the food to 
our kids.
    Last item I wanted to touch on was that I have heard a lot 
of hyperbole--I believe it is hyperbole, as a physician--about 
vaccine mandates, and how people are just going to fall apart, 
and they won't do their jobs if you ask them to do that. We 
have looked at police departments, we have looked at airlines--
the mandates do work, and--even though all the crying wolf 
about how we thought we were going to have thousands of police 
officers in Washington State who would leave their jobs, it 
ended up being 35.
    And so, I just want to kind of pull the air out of that 
argument and say that it would be a real bummer if a truck 
driver carrying all those turkeys to market got COVID mid-
transit, and then couldn't work. And my colleague said you 
can't just pull a trucker out of nowhere. It is a really big 
deal to make sure that our workforce stays healthy and can do 
their jobs. With that, I yield back. Thank you.
    The Chairman. Thank you. And now I recognize the gentleman 
from Alabama, Mr. Moore, for 5 minutes. Mr. Moore, you may need 
to unmute.
    Voice. If Mr. Moore is not ready, go with Mrs. Fischbach.
    The Chairman. If Mr. Moore is not ready, we will work with 
him until he gets ready. And now I recognize the gentlelady 
from Minnesota, Mrs. Fischbach, 5 minutes.
    Mrs. Fischbach. Thank you Mr. Chairman. I appreciate the 
opportunity, and I do appreciate the conversation, and about an 
issue that is so important right now. And we just had some 
awesome questions and discussion today, but I just had a 
question for Mr. Cinco. You noted that high input and commodity 
costs are affecting your business, and we see inflation across 
the board in all of the commodities. Farmers' cost of 
production is increasing alongside everyone else, and they are 
doing what they can to ensure that their product gets to 
market.
    Much of this is due to the bottlenecks in the supply chain, 
that we have been hearing about today. It appears that most 
commodities have increased in costs, but the increase in 
wholesale sugars' costs have been much less than other 
commodities. Is that your observation?
    Mr. Cinco. Yes, that is correct. Soybean oil has about 
tripled, gluten has gone up three times what my contracted 
price was because of the supply--lack of--lack thereof. Sugar's 
gone up about 15 percent. The other commodities, like yeast and 
things like that, most of the input I am getting is it is 10 to 
12 percent, basically all because of freight. It is drivers 
that--they don't--can't get drivers, they want to make sure 
that you can get the product. So I am hearing 10 to 15 percent 
on those commodities, but it is strictly--their argument is 
strictly freight. Sugar is 15 to 20. It is a little higher, but 
it is not, compared to the rest of them, flour, oil, gluten.
    Mrs. Fischbach. And you mentioned a couple, and I am just 
wondering, which one have you seen the greatest increase in 
costs?
    Mr. Cinco. Soybean oil.
    Mrs. Fischbach. I need to get my pencil ready.
    Mr. Cinco. Soybean oil.
    Mrs. Fischbach. Okay.
    Mr. Cinco. Gluten--during the mid-part of the year I got 
force majeure on a contract that went from 80 to $2.65. Next 
year's contract is $1.35.
    Mrs. Fischbach. Okay.
    Mr. Cinco. So it spiked, then it came back. Flour has gone, 
with all the processing fees, from 18 a pound to 28 a pound 
starting in January. My new contract in January will be 28.
    Mrs. Fischbach. Okay. All right. Well, thank you very much. 
And I think I am just going to kind of open this up for 
everybody, and anyone who would like to chime in, the current 
hours of service emergency declaration from the Federal Motor 
Carrier Safety Administration has allowed flexibility to ensure 
that disruptions in the supply chain are minimized. The current 
declaration ends on November 30. What are the potential impacts 
on the supply chain on everything from cattle processing to 
stocking grocery store shelves, if anyone wants to chime in on 
that one?
    Mr. Ferrara. Congresswoman, this is Greg Ferrara with the 
Grocers, I will take the first stab at that. It has been an 
incredibly important tool. While I was talking with our member 
wholesalers yesterday, I was just remarking that the 
flexibility that this has given them has allowed them to get 
orders that otherwise might have been left on a distribution 
center dock to the store as they managed the complete--the lack 
of--uncertainty around whether freight is coming in and when 
freight is going out. So, it effectively means that there are--
able to get product to the stores--to the store shelves, and 
that they are able to be as efficient as they can.
    And, of course, what has been really great about this is 
really it has been done in a safe way, and so we would continue 
to ask for the flexibility, and for that to be extended for as 
long as possible, so that we could give some certainty to our 
distributors. Jon?
    Mr. Samson. And just to add briefly to that, Congresswoman, 
especially from a foodstuff standpoint, since we are seeing 
these supplier issues, these backups, we still are seeing some 
scant shelves at the grocery store. Could potentially even 
broaden this to look at school shipments and deliveries to the 
schools that we are seeing, not being able to properly stock 
their meals for the children, and so I think it has been a 
great tool to provide flexibility for those that are hauling 
both food, and from the livestock side as well.
    Mrs. Fischbach. Well, thank you all very much. And, unless 
there is someone who wanted to add something else, Mr. 
Chairman, I will yield back my remaining time, and thank you 
very, very much.
    The Chairman. Thank you very much. And now I recognize the 
gentlewoman from Virginia, Ms. Spanberger, who is also the 
Chair of the Subcommittee on Conservation and Forestry. You are 
now recognized for 5 minutes.
    Ms. Spanberger. Thank you so very much, Mr. Chairman. And, 
as we have heard from our witnesses today, the impacts of the 
coronavirus pandemic continue to reverberate throughout the 
U.S. economy, global supply chains, and our agricultural 
sector. And if there is one thing that we have learned from 
this experience, it is that the U.S. supply chains lack 
resilience, and are not adequately prepared for the kind of 
disruptions that occurred.
    Certainly, we couldn't necessarily have anticipated all of 
the disruptions that we have seen over the last year and a half 
because of the pandemic, but we have to ensure and recognize 
that disruptions in the future are possible, and we have to 
ensure that this--disruptions on this scale never occur again. 
So, while there is really no silver bullet, making our 
agricultural and food supply chains more resilient really 
requires addressing a multitude of factors that have caused 
some of these bottlenecks. It is a priority for consumers, it 
is a priority for those represented among our witnesses today, 
and, frankly, it is a priority from a national security 
perspective.
    So many of the factors that we are looking at result from 
decades long trends that have been exacerbated by the pandemic, 
including industry consolidation, and changes in the 
composition of our workforce, and there has been a fundamental, 
at times, mismatch between the labor needs of an employer, and 
the available labor. And as a Member of this Committee, I am 
keenly aware of these challenges, and I have been working hard 
to address them. So, the availability of labor across our food 
supply chain has long been a challenge with significant 
economic and national security implications. That is why I was 
a proud original cosponsor, and proud to vote for the Farm 
Workforce Modernization Act (H.R. 1603), a common-sense 
bipartisan bill that would reform our broken immigration 
system, and ensure our agricultural sector has the workforce it 
needs. And I would hope that the U.S. Senate will pass this 
bill without further delay.
    I am also deeply concerned about the difficulties posed by 
our overburdened freight infrastructure and workforce, and so, 
to that end, I was proud to cosponsor H.R. 4966, the Ocean 
Shipping Reform Act. This legislation would help reduce port 
congestion by giving Federal Maritime Commission the authority 
to levy fines against ocean carriers that refuse to take U.S. 
exports on return trips from port. Really, without a robust 
freight workforce and infrastructure, America cannot compete 
globally. And, to that end, I was proud to support the creation 
of an Under-21 Commercial Driver Pilot Program to empower those 
18 to 21 that want to enter a career in truck driving to do so, 
and I urge the Department of Transportation to prioritize the 
implementation of this program. Likewise, I am also encouraged 
by the Senate-passed Infrastructure Investment and Jobs Act, 
which contained similar provisions to recruit and train truck 
drivers, while making long-term investments in our highways, 
bridges, rails, ports, and other freight infrastructure.
    So, for all of the panelists, before I ask any additional 
questions, it does seem that we have a bit of a consensus 
across the panel, so I do want to ask each of our panelists 
whether they agree that Congress should prioritize passing the 
provisions that invest in our truck driver workforce, and 
invest in our aging infrastructure, such as those contained in 
the bipartisan Infrastructure Investment and Jobs Act. And, to 
be very clear, I am not asking about the whole piece of 
legislation. I am just asking if you think we got it right on 
the truck driver workforce piece and recognizing the need to 
invest in our infrastructure.
    Mr. Schwalls. Yes, ma'am. There is a tremendous need for an 
increase and investment into trucking in general. I think there 
could be further--we discussed today education, recruiting 
truck drivers at a younger age, and use of CTA programs at the 
high school level to try to recruit those truck drivers where 
they could actually get into the industry before they are 21 
years old. I think there are other--certainly other things 
could be done, and I have heard a lot of discussion today about 
things that could affect the trucking industry, but currently a 
thing I think that deters truckers and--from getting into the 
industry, or staying in the industry--I believe we need a 
moratorium on e-logs, such as we had back during COVID-19, to 
mitigate some of the costs in the ship lanes and time delays, 
and relax some DOT regulations for non-egregious violations.
    I think there is certainly a possibility to allow a lot of 
these--in the system for at least 2 to 5 years so trucking 
companies could afford to invest in added infrastructure. And 
also, as far as the--concerned, allow more double trailers on 
interstate and state roads to be able to help unclog the ports 
and the distribution centers that are there. And all in all, 
decrease regulations that interfere with supply chain 
logistics. I don't believe that any regulations should deny 
people from the--food security.
    Ms. Spanberger. Thank you very much. And, Mr. Wells, I will 
go to you.
    Mr. Wells. Yes, in the essence of time, I would agree, 100 
percent. I think Jon hit on a lot of key points, and we would 
agree with him.
    Ms. Spanberger. Mr. Ferrara?
    Mr. Ferrara. Agreed.
    Ms. Spanberger. Mr. Durkin?
    Mr. Durkin. We agree.
    Ms. Spanberger. Thank you. Well, I have so many other 
questions, but I am really appreciative of your time, Mr. 
Chairman, I am appreciative of this Committee, and I want to 
just thank all of our witnesses for your work in making sure 
that you are bringing light and clear understanding to so many 
of the supply chain issues that our country is facing. 
Certainly, I think you have commitments from so many of our 
Agriculture Committee Members to continue working on this 
issue, addressing the bottlenecks--addressing the reforms that 
need to occur, and again, I just thank you for your time and 
your testimony today.
    The Chairman. Thank you, Ms. Spanberger. And now I 
recognize the gentleman from Alabama, Mr. Moore, for 5 minutes.
    Mr. Moore. Thank you, Mr. Chairman. Can you hear me okay 
now?
    The Chairman. Yes, I can.
    Mr. Moore. We were having some issues here in the office, 
but I think we have them worked out. So, Mr. Wells, I want to 
ask a question real quick. I would like you to elaborate a 
little bit on your answers you gave to Congressman Bacon, and 
on one of the points you made in your testimony regarding the 
use of inland waterways. In my home State of Alabama, we are 
fortunate to have over 1,200 miles of inland waterways, which 
we use to transport approximately $1.5 billion in freight every 
year, and support about 200,000 jobs in that region. In your 
testimony you described a need for extensive maintenance and 
modernization of our locks and dams, right alongside the need 
to address congestion in our ports. Can you go into a little 
more detail regarding the need for strategic investment in 
these areas, and what improvements should we prioritize to 
alleviate future challenges to our supply chain?
    Mr. Wells. Sure. Well, the port congestion I think speaks 
for itself. I think we have all seen pictures of containers 
stacked at ports. Regarding the inland waterway system, 
GROWMARK would move roughly 1,500 barges a year on the inland 
waterway system, Mississippi, Ohio, Illinois predominantly. As 
I stated earlier, the need for regular maintenance, many of 
these locks and dams were built in the 1920s and 1930s with a 
50 year useful life. They have exceeded that, obviously, today. 
They are at real risk, many of them, of failing on us, and so 
failure of that lock and dam system, any one of those, would be 
potentially catastrophic to the movement of goods up and down 
that river, from grain, to fertilizers, to coal or other 
products.
    When tows come up, they have to be broken if they are less 
than 1,200 locks, and so that just takes time. They have to 
disassemble them, push them through, get the other half, push 
them through, reassemble them. And so, the need for repair and 
replacement is high, and we are at great risk of really 
impact--further impact to the supply chain.
    Mr. Moore. Thank you, Mr. Wells. And I might add, you guys 
find this probably unusual, but I actually have my CDLs, and 
have a company, and so I have been having a hard time finding 
drivers. It is across the board out there. And, it is 
interesting, I talk to my superintendent all the time, we 
actually put out advertisements to interview, and out of ten 
you might get maybe six that answer, and then one that shows up 
for the interview, and then the rate that they want to receive 
in salary almost puts the freight cost--you know, it--we just 
can't adjust that quickly in this part of the world.
    This isn't a question, but I think it is worth mentioning. 
State governments have had a hand in addressing this issue for 
some period of time, and Congressman Cloud mentioned during his 
time, at the Federal level we can do what we can, but when 
states like California are passing laws that cover thousands of 
independent drivers and contractors with red tape, they only 
add to the problem in our supply chain. I actually had a call 
with a friend of mine this morning that is a CDL driver, and 
they moved from California, these independents, because of some 
of the requirements. It didn't make sense for them to work in 
California. So, there are some things we can do, and I hope we 
will continue to pursue reducing government regulations to 
increase--decrease costs, I should say.
    So, with that, Mr. Chairman, I have a little time left, but 
I will just yield back, and I appreciate the witnesses for 
their time today.
    The Chairman. Thank you very much. And now I recognize the 
gentleman from Florida, Mr. Lawson, for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman, and welcome other 
witnesses to the Committee. Mr. Samson, you spoke about the 
importance of improving communication between supply chain 
suppliers to avoid a supply chain breakdown and provide 
Congress and Federal regulators a better understanding of how 
to provide effective and meaningful relief. At the risk of not 
sounding like a broken record, if possible, could you tell us 
again what your ideal communication system would look like, and 
what steps should be taken by Congress to incentivize the 
communication network?
    Mr. Samson. So briefly--thank you, Congressman. Briefly, I 
just want to go back to the breakdown, March 2020, of our COVID 
pandemic. The communication that we were able to establish 
along the supply chain, everyone from growers, through 
processors, into the grocery or the manufacturing side, had the 
same goal in mind, and so the communication, once established, 
was fruitful. We were able to go through and have a good 
conversation, figure out how to make things more efficient 
moving forward, and minimize or eliminate food waste.
    Now, the communication that we have currently in our food 
supply breakdown doesn't have everybody looking towards that 
same direction. And I think I had mentioned this earlier today, 
but the fact that the ocean liners have a certain agenda of 
what they want to accomplish, the ports have their own issues 
that they are dealing with, and then the carriers, all the way 
to the warehouses. And so I think the communication is 
extraordinarily important to get everybody on that same page, 
and I think some things, like the Ocean Shipping Reform Act, 
will assist in pushing the carriers in that direction. I think 
being able to get the warehouses--if the port is operating 24/
7, the warehouses need to operate 24/7, or else you are going 
to run into those constant bottleneck issues. So I think in 
order for us to actually work together and fix this issue on a 
communication side, everybody has to be speaking towards the 
same direction, and I don't think we are getting that right 
now.
    Mr. Lawson. Okay. Did anyone else care to comment on that? 
If not, I will go to my next question. Clearly, and hearing 
most of the discussion today, we are talking about the 
situation that we have with truckers and truck drivers, and 
things that can be recommended. Here in Tallahassee, at the 
community college, they set up a program to train truck 
drivers, which I think is very significant. But I hope that 
someone on the panel can tell me, in their perspective, what 
they think of--because when I calculate--since March of last 
year--that might come up to as much as $3,600, or $4,000.
    What do you think has caused the problem--because that is 
not enough money for them to survive--for so many of them to 
leave the industry? And this is one of the things that I am 
asking to the panel, because there has to be something that is 
going on, other than the amount of money that they have from 
stimulus dollars, for their families. Because I know, for 
example, that I had a young man that I coached when I was 
coaching basketball, and he is still a truck driver, and I had 
the opportunity to talk to him, and--but I couldn't get a clear 
picture. And before my time has run out, I would like to see 
what can I hear from the panel?
    Mr. Wells. I guess, from a trucking standpoint, it has been 
difficult for us to pinpoint why we are not seeing more 
interest. We are getting carriers that are paying for the 
training itself. We are getting grant money, state grant money, 
that is able to provide for these drivers going through these 
different college programs. We are getting the younger high 
school education in there as well, and we are still not quite 
sure--there are other alternative careers out there that have a 
similar path and similar pay structure, and so that is one 
thing that we see as competing with what we are trying to do 
here, but it has been difficult to really pinpoint that.
    Mr. Ferrara. Congressman, only other thing I would add is I 
think that a lot of people are jumping around. You can go get 
$18 an hour to make a burrito right now, and I think there are 
a lot of people who are jumping around. They may not be working 
this week. They can pick up gig jobs doing Uber or Doordash, or 
whatever it is. There are just a lot of opportunities out 
there. We need to help people focus on careers so we can get 
them focused on the long-term.
    Mr. Lawson. Thank you very much. Mr. Chairman, I yield 
back.
    The Chairman. Thank you very much. And now I recognize the 
gentleman from California, Mr. LaMalfa, for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman, for having this key 
hearing at a key time here on our supply chain, and what that 
means for all American consumers. Covered a lot of good info 
today. I think we still really need to drill right down to what 
is it we can do that would be the most effective, the most 
immediate, relief for what is going on at the ports, and the 
whole chain of getting these products out, and that bottleneck 
down, and getting things to the store shelves, whether you are 
talking about the context of Christmas, or just in the general 
terms of keeping food on the shelf, and perishables from going 
bad, waiting to go--whether it is for export or, when you are 
talking trucking, just in general around the country.
    So, some of the things we talked about is--or thinking 
about too is, as a California Member, we deal with things to an 
extra degree. We have AB-5, which was also attempted to be 
passed here, known as the PRO Act (H.R. 842, Protecting the 
Right to Organize Act of 2021), which basically is--really 
zapped owner/operators of trucks. The California Air Resources 
Board phasing out trucks that are older than 2011 engines or 
2010 model trucks. The DMV has a 2 month backlog at least on 
getting truck drivers licensed. We have what was mentioned a 
couple times, I think most recently Ms. Spanberger, on getting 
more people that are the--age 21 requirement, get them down to 
the age 18 requirement so they can do intrastate trucking, the 
hours of service. We need some flexibility on that.
    We need to have whatever we can do at the Federal level, 
and our governors and our state level folks look at some of 
these issues and say, can we at least put a variance on this 
for a period of time to get caught up, you know? Weight limits 
on trucks, can we put a variance on that for a while to deal 
with just getting through the backlog, because we are all being 
harmed by what is going on. It is really harming our economy, 
and the people that produce these products, and we are going to 
see, as it has been talked about earlier in the Committee, a 
shift of where these products are going to come from. So let me 
talk to Mr. Durkin about this.
    You spoke earlier about your markets, basically, and people 
will shift to buying things from EU, or from New Zealand, 
Australia, wherever--whoever can supply this. Please emphasize 
that a little bit for this Committee.
    Mr. Durkin. Yes. There are three primary dairy exporting 
countries. It is ourselves, the U.S., the European Union, and 
New Zealand. And I gave an example in my testimony where we 
have had the--again, the one customer where that actually--has 
actually incurred significant air freight charges because they 
can't get it to--on a boat, and there is an expectation on 
there that we pay for that, which we will be unable to do. We 
are trying to do the best we can, and--with some pricing 
there--to kind of mitigate that, but the costs are significant.
    The most concerning thing over the long-term is the loss of 
that customer. And, again, going to European Union, as they had 
indicated, and this will not be the first. It will just be the 
start of this, and that is my concern on this.
    Mr. LaMalfa. What does the loss of that customer actually 
mean to an American consumer, do you think?
    Mr. Durkin. The loss of that is, obviously, millions of 
dollars in product that we were able to come back. But now what 
is going to happen, from an American consumer standpoint, it is 
going to increase supply in the United States, per se, but it 
is going to drive pricing down to--make it very volatile, and 
what you are going to see is actually lower milk prices for the 
dairy farmer. That is also our concern, because the big part of 
growth for dairy farmers is actually going to be exports.
    Mr. LaMalfa. So, the dairy farmer won't be around very long 
at that rate?
    Mr. Durkin. It is a concern on our end for the viability of 
the dairy farmers.
    Mr. LaMalfa. When we are talking about the issues at the 
ports, once again, you mentioned earlier that the costs of a 
freight train I think was $5,500. Just to use that container to 
fill with product, but, things that are out of your control, 
the detention and demurrage fee, you said was up to $20,000, 
right?
    Mr. Durkin. That is correct.
    Mr. LaMalfa. And that is something you don't control, 
right?
    Mr. Durkin. That is out of our control.
    Mr. LaMalfa. Is that something you even anticipate until it 
happens?
    Mr. Durkin. We cannot--you--until it rolls, and you get the 
actual invoice, you don't know that you are actually incurring 
those charges, and we have actually had to hire temporary 
people to actually go and research those charges to try to go 
back to the carriers to try to get rid of that, but it has been 
a challenge.
    Mr. LaMalfa. This is a lot like surprise medical billing, 
you get a surprise bill on your demurrage.
    Mr. Durkin. That is a good analogy.
    Mr. LaMalfa. Yes. Okay. Do you ever feel like it is your 
fault for that, or is it just--because it is more out of your 
hands with the shipping, and the loading, and all that, isn't 
it?
    Mr. Durkin. Absolutely not our fault, because we have the 
goods on time, at the port, ready to go. As we talked about, 
there are challenges on getting containers, as well as chassis, 
there, but we have worked very hard to be able to do that.
    Mr. LaMalfa. You mentioned too that you--was it 70 percent 
of ships leave the U.S. with empty containers, or in some cases 
no containers, because they have left them on the dock because 
they are in a hurry to get back?
    Mr. Durkin. Correct.
    Mr. LaMalfa. Has the 24/7 port order helped to change that 
situation any?
    Mr. Durkin. The 24/7 port order was a suggestion for the 
ports to work towards that.
    Mr. LaMalfa. Suggestion?
    Mr. Durkin. Suggested.
    Mr. LaMalfa. So, it is not in place yet?
    Mr. Durkin. Correct. It is not in place yet. And there--I 
think the reality of this is--I know they have a union 
negotiation--the--labor negotiations coming up in the 
springtime, and they will have to get--probably work through 
that. They will have to hire people, and obviously train 
people. In our mind, this is 6 to 12 months out at best.
    The Chairman. The gentleman's time has----
    Mr. LaMalfa. My time is out, but I would hope the panel, in 
other questions, would you emphasize what things we could be 
fixing right now to get results right now in other questions? 
Thank you.
    Mr. Durkin. Yes.
    The Chairman. Yes. And if you could provide those in 
writing back to him, we would appreciate it. Thank you. And now 
the gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
minutes.
    [The information referred to is located on p. 188.]
    Ms. Letlow. Thank you, Mr. Chairman, and thank you to the 
witnesses for your time and testimony here today to discuss the 
important issues our agriculture industry is facing in the food 
supply chain. As I travel throughout the 5th District and the 
state, I continue to hear the many concerns of our farmers, 
ranchers, and agriculture retailers. A common theme, one that 
has also been highlighted throughout this hearing, is the 
ongoing and constraining labor shortage, not only with domestic 
workers, but within the H-2A seasonal workforce as well. 
Specifically, one crawfish peeling plant in Louisiana applied 
for 190 H-2B workers, but were ultimately denied because the 
cap was met within the first few days of implementing the 6 
month application period.
    While this not an unknown circumstance in recent years, the 
shortage of seasonal workers for agriculture processing is 
catastrophic for our farmers, that rely on these operations to 
process their perishable harvested crops. Compounding this 
issue, if our employers can't find domestic workers to fill 
jobs, then we need these seasonal workforce programs to work 
for our agriculture industry in a sufficient and efficient 
manner.
    In addition to labor, it is also essential that our farmers 
are equipped with the tools and machinery necessary to have a 
successful planting season and harvest. From fertilizers to 
herbicides, as well as parts for farm equipment, the farming 
community has experienced an increase in prices, delays on 
delivery, and lack of availability. All this to say we are not 
just looking at one impactful challenge. While these supply 
chain issues affect our farmers, they also affect the consumers 
and the greater U.S. economy. At the end of the day, this is a 
national security issue, and one we should not take lightly.
    I have heard from many growers in my district who are 
troubled by shortages of major herbicides used on tens of 
millions of acres. Several of these chemicals have seen prices 
nearly double in recent months. Many are also concerned with 
reports that the U.S. Environmental Protection Agency is 
considering a label change ahead of the next growing seasons 
that could pull the rug right out from under farmers. If 
growers order seed and chemicals expecting certain use 
conditions, and because of EPA label changes, now have an 
entirely different product registration to work with, it might 
not meet their needs. Many could have to entirely switch to new 
seed and chemical varieties.
    Mr. Wells, from the retailer perspective, how is the 
herbicide and seed market currently, and what impact might it 
have if EPA does make a significant label change ahead of the 
2022 growing season?
    Mr. Wells. Yes, I would characterize the herbicide industry 
specifically with a couple of key actives, glyphosate and 
glufosinate, as being very disrupted right now. A lot of that 
production, as has been discussed, comes from China. We have 
some domestic production, actually, in Louisiana, but those 
farm plans are being made today, and any disruption--we sell a 
lot of herbicide and seed systems, and so you buy the seeds, 
the herbicide is used along with it, and so disruptions on one 
side of the supply chain directly impact the other side of the 
supply chain. One of our concerns is if there is a disruption 
from an EPA ruling of some type that takes a tool away from us, 
is there another tool that is effective against the weeds, or 
whatever we are trying to control with the first.
    Ms. Letlow. Thank you so much, Mr. Wells. Mr. Chairman, I 
yield back.
    The Chairman. Thank you very much. And now we have reached 
the conclusion of this hearing. I can't--is there one other? I 
am sorry. The gentlelady from Florida.
    Mrs. Cammack. Forgive me, Mr. Chairman.
    The Chairman. My deepest apologies to you, Mrs. Cammack. 
You are now recognized for 5 minutes. Thank you.
    Mrs. Cammack. Thank you. Thank you, Mr. Chairman, and thank 
you to all the witnesses for appearing here today for this most 
important topic. I am a little shocked that, 11 months in, we 
have been dealing with these issues, and we are just now 
getting to them, but, nevertheless, I am very excited to have 
these conversations, so I am going to jump right in.
    Mr. Ferrara, your testimony speaks to the government 
helping your member stores in attracting talent. As you know, 
there are a myriad of workforce development programs in 
existence, including those that help very specific populations, 
i.e., SNAP recipients, homeless veterans, et cetera. If you 
held the pen to recalibrate these programs, how would you go 
about doing so?
    Mr. Ferrara. Congresswoman, we actually just held a seminar 
with some of our members through our foundation to attract 
folks with disabilities into our industry, and it was very well 
attended. I think the most important thing is we need to give 
our grocers, and our wholesale distributors as well, a lot of 
tools in the toolbox, because every community is different, and 
their needs are different. And so, to make sure that we have 
access to as many of these different programs and resources, 
and that they are easy to use and easy to implement, I think 
that is another thing that is very important. I think that can 
go a long way to making a dent in the challenges we are facing 
today.
    Mrs. Cammack. I appreciate that, and we are very excited to 
work on ways that we can put more tools in the toolbox. And, 
throughout the year I have put forward measures to move funding 
away from the more handout-based SNAP programs and towards 
workforce development programs, however, what we have seen with 
the Majority, and this Administration--and they have made it 
very abundantly clear, that its policy towards SNAP--recently 
that was highlighted by the fly-by-night Thrifty Food Plan 
update, with no data backing, that they were perfectly content 
with paying Americans to stay home, and, quite frankly, that is 
very frustrating, disincentivizing Americans from working. I 
was called cruel and heartless in this Committee for suggesting 
that we work to find ways to mobilize, and incentivize, and 
encourage Americans to get back to work, and that has been very 
frustrating, especially when we have so many that are begging 
for help and ways that we can get people back on their feet.
    So, I am going to shift a little bit here, and hit 
something that is very close to home for me. Mr. Wells, you 
mentioned in your testimony the need for free and fair trade of 
agricultural products, equipment, crop inputs, that are 
essential to supply chain resiliency. I share your concern here 
greatly, because most recently the International Trade 
Commission had considered restricting the import of urea 
ammonium nitrate solutions, which is a critical input for many 
of our producers. Now, what would the impact be if the 
International Trade Commission, under this Administration, bans 
the import of these nitrate solutions, or other imported 
inputs? Can our domestic production under this Administration, 
with the increased red tape and regulatory environment, 
realistically pick up the shortfall in a way that does not 
impact our producers and consumers on either end of the supply 
chain?
    Mr. Wells. Yes. Well, obviously I wouldn't want to 
speculate regarding the ongoing investigation I think that was 
just filed not long ago. I am doubtful there will be a ban on 
the product, perhaps duties. We have had one other situation 
come through.
    Currently U.S. producers, they have really upgraded their 
capacity over the last decade. There has been significant 
investment in the nitrogen space. It all depends on what 
products they want to produce in what ratios, but technically 
there is enough production to meet the U.S. UAN demand, the 
urea ammonium nitrate demand. I think the biggest concern of 
the retailers that I talk to is the ability to get the products 
shipped where they need to be, and particularly on the coasts, 
the West Coast and East Coast, and what the cost of doing so 
might be.
    The sense is it is probably less costly to come from 
offshore destinations. Time will tell, we will see, but I think 
the big concern, again, is just the shipping conditions of 
getting the product in the right place at the right time.
    Mrs. Cammack. Well, I appreciate that, and we will be 
continuing to monitor this, and we do have great concerns about 
the regulatory environment, and how that is going to impact 
domestic production. And obviously, this is an active 
investigation.
    Before my time expires, I do want to associate myself with 
Representative Fischbach's comments. Mr. Cinco, you had made 
some statements about high sugar prices, et cetera, and I would 
just like to say I need to emphasize the importance of a 
domestic production of our sugar industry. It is critical. We 
cannot rely on foreign imports, and so I would like to 
associate myself with Representative Fischbach's comments. And, 
Mr. Chairman, with that, I yield back.
    The Chairman. Thank you, Mrs. Cammack. And now, this 
reaches the end of our discussion here. The points that you all 
have made have been illuminating, and it has opened our eyes to 
much of what we were only dimly aware getting into this. But we 
have to have two trains running here, gentlemen, and I think 
that that would be the conclusion of what we have heard. Two 
trains running, we need. We need a long train running, and we 
need a short train running. We can discuss the recruitment, 
working with the 18 year olds, getting young people involved, 
long-term. What we have to be concerned about now, though, 
gentlemen, is how and where we can get commercial licensed 
drivers in the trucks now.
    And so, in my concluding statement, I want to ask this 
question to you. How can we do that? Now, I had an uncle who 
was a truck driver, and I can tell you that truck drivers are 
very unique individuals. It takes a special kind of person to 
do this task, but they are like a brotherhood, a fraternity, 
and I want to ask--perhaps Mr. Samson, I think you are with the 
trucking, is it possible that we can work with the Teamsters? 
We have to bring--the Teamsters are the unions for the truck 
drivers. What role is there, if there are truck drivers out 
there already with the license, that perhaps are in between 
jobs, or they left, but now that we have this crisis here--and 
let us call it what it is. I thought 15,000, but you have 
informed me 80,000 commercial drivers short. We have to respond 
to this now.
    What about our military? There are veterans who have 
experience with long haulers. My Lord, if you know what our 
military and our soldiers do, they have the talent, they have 
the experience of driving these huge vehicles, hydraulics, 18-
wheelers, that move tanks and artilleries on the battlefield. 
The other thing is so many of our young people find that they 
are accustomed to the automatic transmission. Man, when you get 
into truck driving, it takes a special kind of training. The 
gear shifting, the movements. So, is there a way we can reach 
out to veterans' organizations, find individuals that may be 
able to help us in the short-term? This is an immediate crisis.
    Finally, we do without a lot of things, but, gentlemen, we 
cannot do without food. And if there is anything that we never 
need a shortage of in supplying to the American people, it is 
food. So, tell me, is there a way we can reach out, involve our 
military, involve our Teamsters, who know drivers, who may have 
left, can assist us in locating them. We need immediacy here. 
This is the way we make sure that we never have a food 
shortage.
    And then we have to do the recruiting. We have the young 
people coming in, but we need drivers now. Can you assist us 
here with coming up with a way? We have the Labor Department, 
we have Federal, we have the Congress of the United States in 
our hands, where we can appropriate necessary emergency money 
to use as an enticement, as a reward, as a bonus for those who 
may come out of retirement, who are young, but taken early. Our 
Teamsters know who these people are. I work with Teamsters. It 
is a brotherhood, and they call it that. They could be helpful. 
Our veterans, who fought in the wars, they would be helpful.
    There are people out there who will come and help us in our 
moment of need. We need to identify these sources, and put us 
here in Congress to work, to provide whatever you need to get 
these commercial licensed drivers into these trucks so we will 
never face a food shortage in this country. And make sure we 
are capable of assisting, so that there is never a food 
shortage anywhere in the world. Food is our most important 
industry. I say that all the time, because there are a lot of 
things, as I said, we can deal with, but we can't deal without 
food. You talk about pressures, you talk about turmoil, that 
would bring it. So, we have put our Paul Revere hats on here 
today, we have sounded the alarm.
    Before I close, could you respond to that? Have any motions 
been made to that? I can assist you with that. I worked with 
the unions, the Teamsters. They are ready to work with us. I 
have worked with veterans' organizations over the years. They 
would be ready to help us. They have the experience. Many of 
them already have the commercial driver's license. What can we 
do to engage them to come help their nation at a time where we 
need help the most?
    Mr. Samson. And that is extraordinarily important, and I 
think we need to look at all options, like you said, I mean, 
all options on the table. From a military perspective, we have 
been engaged, understanding that they have that background of 
the large machinery, trying to streamline their ability to get 
into the industry. And I believe we have been successful at 
that, but there is a lot more that can be done. And I think, as 
you mentioned, all options are on the table, crisis mode, to be 
able to go out and recruit and bring those in from a diverse 
array of different areas around the U.S., and internationally, 
but it is extraordinarily important. It is something that we 
focus on, on a daily basis and realize the importance of it.
    The Chairman. And have you been in touch with the 
Teamsters?
    Mr. Samson. I believe we have, yes, and we have members 
that work through the union side as well, and so----
    The Chairman. Good.
    Mr. Samson.--correct.
    The Chairman. Good. Well, please, if there is anything that 
this Committee, and us here in Congress, can do to help your 
forward progress with getting a hold of people who can come and 
help us now, please call on me to help you, call on our 
Committee, and the Congress of the United States. We cannot, we 
must not, and we will not ever have a food shortage in our 
nation. All we have to do is go to work and prepare for the 
storm before the hurricane is raging.
    With that, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any question posed by a Member. Thank 
you, God bless you, this hearing is adjourned.
    [Whereupon, at 2:09 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Letters by Hon. David Scott, a Representative in Congress 
                              from Georgia
                                Letter 1
on behalf of matthew ott, president and chief executive officer, global 
                          cold chain alliance
November 3, 2021

    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    Thank you for holding a hearing on challenges facing the nation's 
food supply chain. I am submitting this testimony on behalf of GCCA's 
members, designated essential businesses, who are working tirelessly to 
ensure that consumers have reliable access to safe, high-quality food 
across the United States and globally. GCCA represents all major 
sectors of the cold chain and unites partners to be innovative leaders 
in the third-party temperature-controlled logistics industry. The cold 
chain refers to the temperature management of perishable products to 
maintain quality and safety from the point of slaughter or harvest 
through the distribution chain to the final consumer. GCCA is committed 
to forging a universally strong cold chain where every product retains 
quality and safety through each link. Through its four Core Partners, 
GCCA represents more than 1,100 companies in 85 countries who serve the 
food industry by providing third-party, temperature-controlled supply 
chain services.
    The cold chain serves as a crucial link in the supply chain, as our 
members ensure the food safety, security, and reliable access to over 
213 billion pounds of perishable food annually. While parts of the 
country shut down, GCCA and our members realized the vital role our 
industry plays for the integrity of the food supply chain and remained 
open and operating throughout the pandemic.
    GCCA appreciates the opportunity to provide testimony on challenges 
and opportunities for strengthening the food supply chain for the 
future. GCCA has identified major issues and trends currently impacting 
the food supply chain and offers recommendations including:

   Support for workforce development initiatives and policies 
        to address labor challenges across the food supply chain.

   Regulatory flexibility to address current and future supply 
        chain disruptions and shifts in consumer patterns.

   Improved FSIS policies and capacity including increased FSIS 
        personnel, identifying alternative methods for achieving 
        veterinary signatures and revision of the ``50 mile'' rule for 
        import establishments.

   Increased support for continued development and 
        implementation of supply chain technology, including the 
        strengthening of cyber security across the food industry.

   Utilization of COVID relief programs and funds to assist 
        food supply chain companies in mitigating pandemic related 
        expenses and strengthen their operations post-pandemic.

    Below are additional details on the key issues our industry has 
identified for consideration:
Labor Constraints
    The pandemic has placed strains on the labor market, causing major 
challenges to our members. Our members have faced a labor shortage 
during this pandemic making it difficult to meet growing demands. To 
stay operational, our members have been paying overtime and premium pay 
rates to those who are willing to work and in addition many have hired 
outside labor, which often comes with a hefty price tag.
    Even as lockdowns ease, finding labor has continued to be a 
challenge. While facilities have increased the starting wages and 
adjusted the pay of experienced workers along with the minimums 
increase, many people are choosing not to work in cold environments, 
even for more money and benefits, over unemployment or working in 
unskilled positions. This is driving many companies to look at 
automation systems, which require automation technicians and additional 
specialty training in fields where there is not yet a developed pool of 
workers.
    In addition, GCCA is concerned about the OSHA Emergency Temporary 
Standard (ETS) requiring COVID vaccinations and testing for companies 
with 100 or more employees and the potential impact it could have on 
the food supply chain. Given the already existing labor challenges our 
industry faces these new requirements under the ETS would place 
additional strains on the supply chain. The potential of labor 
shortages in our industry, and for our members' partners across the 
food industry, could dramatically increase as employees may exit to 
avoid these new requirements. To alleviate these concerns, we encourage 
the Administration and Congress to explore the opportunity to provide 
an exemption for those companies within the food supply chain to ensure 
our country and the world has reliable access to safe and high-quality 
food.
Supply Chain Capacity and Infrastructure
    The food supply chain is interconnected and disruptions in one part 
of the chain have ripple effects upstream and downstream. It is 
important that the infrastructure of our ports for both imports and 
exports be modernized and automated to prevent the slow down or 
stoppage of commerce. Supply chain infrastructure for cold storage 
capacity is reliant on planned cycles of food producers harvesting 
produce and proteins. Supply chain disruptions continue to cause 
challenges to the efficient flow of import and export containers. In 
addition to negatively impacting the efficient movement of food through 
the chain, these disruptions to container availability and flow are 
also resulting in significant per diem, detention and demurrage charges 
outside of the control of our members. The disruption in flow of 
containers is also leading to added fuel and energy costs to keep 
refrigerated containers at the proper temperature to preserve food 
safety and quality while our members wait for the supply chain to move. 
In some cases, our members have been forced to use refrigerated 
trailers to be used for storage, as opposed to transportation, to hold 
product destined for export that has not been able to move do to port 
congestion. Supply chain disruptions have also caused increased costs 
related to critical materials and inputs and led to much longer lead 
times in procurement.
    The food industry continues to experience significant challenges at 
port terminals. One of the major issues is a lack of land used to 
return empty containers. Currently, imports are exceeding exports on 
the west coast and in some cases, containers are returning to Asia 
empty, even though there is a large quantity of U.S. product destined 
for export that needs access to the containers. Predictable and 
consistent access to refrigerated containers will be critical to 
ensuring an efficient food supply chain in the future.
    There are also challenges regarding the capacity for refrigerated 
transportation equipment. Current build times for key equipment are 
backed up to next year and prices are increasing due to raw material 
sourcing, component delays and current [COVID] restrictions. Trailer 
manufacturers are having to slow their lines down due to lack of 
availability of components needed to build the units. Raw material is 
not stable in pricing, so it is difficult for manufacturers to provide 
pricing to their customers. Demand is high and the lines are closed out 
for the entire 2021 year. These issues will continue to place a strain 
on the food supply chain.
    It is important to note that industry cannot build a supply chain 
specifically designed to handle a pandemic, as a significant percentage 
of the cold chain capacity would be idle during normal times. Instead, 
we should look for ways to build flexibility and collaboration within 
supply chain to meet potential disruptions in the future. Both 
government and industry will need to work together to build flexibility 
and cooperation to fill those gaps in a state of emergency.
Shifts in Consumer Buying Patterns
    Challenges with recent food supply disruptions presented by the 
pandemic were not due to a shortage of food in the U.S. Rather, 
disruptions were largely caused by consumers shifting how and where 
they were purchasing food.
    Grocery (retail) and food service (restaurants) are the two main 
channels by which consumers access food. Both channels have very 
different requirements as to size of packaging, preparation, and 
distribution supply chain channels. According to a National Restaurant 
Association (NRA) report in January 2020, 51 percent of the U.S. 
Consumer dollar spend was at restaurants in 2019. At the beginning of 
the pandemic, the U.S. experienced what seemed like shortages in the 
grocery stores for two main reasons (1) abrupt shifting consumer buying 
patterns (2) surge buying.
    In a matter of days, the U.S. consumer shifted from purchasing 50 
percent of their food from restaurants to nearly 100 percent from 
grocery as the nation sheltered in place. Restaurant and grocery have 
two different channels (customer/vendor relationships) that do not 
typically crossover.
    One of the challenges related to shifting consumer patterns is that 
current packaging practices are very different between food service and 
retail. For example, food processors package specifically for 
restaurants in much larger quantities such as 20 pound packages, while 
packages for retail are usually much smaller, such as 2 pound packages. 
In many cases, product in 20 lbs and 50 lbs packages could not be used 
for retail and sat idle in cold storage facilities. This created the 
illusion of food shortages. Even today, some cold storage facilities 
have restaurant product that is still sitting in their warehouses.
    We appreciate USDA and FDA providing regulatory flexibility to 
facilitate some shifting of product from food service to retail during 
the pandemic. We recognize there are some regulatory and even private-
sector limitations to how product can be redirected. However, the 
future ability to redirect food products between channels will be 
imperative to mitigate the impacts of shocks to the supply chain.
    Development of allowances in standards/regulations for low-risk 
food items to be converted from bulk to retail packaging during 
emergency situations could limit shortages, reducing waste and lost 
product. This could be done by building packaging option capacities at 
the food processor that transforms the food to have the capability to 
shift restaurant (bulk) packaging to consumer packaging so that they 
could shift to the different channels Grocery/Restaurant if needed. The 
issue could also be addressed at the end of the supply chain, where 
distribution centers or grocery stores could breakdown restaurant 
quantity packaging to consumer packaging.
    Another challenge to the food supply chain was surge panic buying. 
It is important that U.S. consumers have confidence in the food supply 
chain and that product will reliably be on the shelves. Surge buying 
creates a bubble that takes time for food production and distribution 
to catch up. The problem is compounded as once shelves are bare, the 
consumers continue to surge buy when available which creates additional 
bubbles. Better end-to-end supply chain visibility would help provide 
stakeholders, government, and consumers the confidence in the cold 
chain distribution.
    The shift in consumer patterns also impacts refrigerated 
transportation. Within cold chain transportation, equipment in 
distribution to the grocery and food service is very different in 
specifications and design. The workhorse of grocery is a 48 to 53 
refrigerated trailer, as opposed to food service distributors that may 
require a 28 or 36 refrigerated multi-temperature trailer to 
distribute multiple stops in smaller areas. When these two channel 
competitors attempt to work together, the smaller refrigerated trailers 
due to their capacity make them harder to utilize in the grocery 
business. These two very different distribution channel segments will 
need to continue to communicate and work with one another to help 
ensure efficient asset utilization in the future.
Food Supply Chain Technology
    Further advancements in supply chain technology and logistics need 
to be explored and implemented. Due to sourcing efficiencies that have 
been gained and supply chains getting longer, supply chains have become 
more vulnerable to disruptions. The lengthy and complex networks of 
contemporary supply chains make them difficult to regulate and manage. 
This is compounded with a linear disconnected supply chain of one up, 
one back where data resides in individual company systems that cannot 
be shared in the supply chain ecosystem. Visibility will be key to 
building a more resilient cold chain.
    Digitization can be an important step to increasing the resiliency 
of the supply chain. The process would include marking, digitizing and 
utilizing data at the product level across the supply chain. The use of 
IoT markers, like RFID can automate the process without physically 
engaging the product, as well as provide economic benefits and improve 
visibility to the supply chain. This visibility would allow supply 
chain stakeholders to provide real-time inventory data, understanding 
when and where to surge or transform a product and provide consumer 
confidence in the supply chain to reduce future panic surge buying. In 
addition, the ability to scan and retrieve documents can remove 
friction along the supply chain.
    With the increased reliance on technology across the food supply 
chain, the threats to cyber security become even more challenging. GCCA 
members ranging from single facility companies to companies with 
locations worldwide have been targeted with cyber-attacks. Those 
attacks, coupled with high profile incidents involving the meat and oil 
industries highlight the risks to the supply chain. GCCA encourages 
Congress and the Administration to work with industry to develop 
additional resources to assist the food industry in strengthening cyber 
security.
Limitations of USDA-FSIS Policies and Staffing
    Staffing levels of FSIS personnel represent another capacity 
challenge for the cold chain. We greatly appreciate the dedication and 
commitment of FSIS employees during the pandemic to maintain inspection 
operations. However, even before the pandemic, our members have 
reported that an increase in FSIS inspection capacity would enable 
increasing in exports and imports of meat and poultry.
    We urge the Department examine the possibility of increasing the 
number of FSIS inspectors who can support exports and imports across 
the country. We also recommend that inspectors be authorized to handle 
both export and import inspections. The current lack of inspection 
capacity is leading to inefficiencies in the supply chain. For example, 
some members have given up attempting to unload and inspect containers 
in the same day. As a result, they unload the container, palletize the 
cargo and put it away in the freezer to be presented for inspection at 
a later time when an inspector is available. This adds significant 
costs and inefficiencies to the supply chain.
    We strongly recommend that FSIS reexamine the current ``50 mile'' 
rule that limits import inspections to facilities within 50 miles of a 
port of entry. This policy limits the number of available facilities to 
move product for inspection and creates significant bottlenecks at the 
ports moving cargo in and out.
    Eliminating or modifying this policy would increase food supply 
chain capacity and throughput, thus strengthening the resiliency of the 
supply chain and helping alleviate congestion.
    The availability of Federal veterinarians to sign export documents 
is another limiting factor for supply chain efficiency. While GCCA 
appreciates FSIS efforts to facilitate greater usage of electronic 
means for processing export documents, some countries maintain the 
requirement for wet signatures by veterinarians. In some cases, members 
drive over 150 miles each way to secure signatures, pay costly couriers 
to transport documents for signature, or utilize overnight shipping 
services. The current system places a strain on both industry and 
agency resources, creates delays, and causes costly inefficiencies.
    GCCA urges FSIS to work with countries to eliminate/modify wet 
veterinarian signature requirements and examine alternative methods for 
meeting signature requirements to improve the efficiency of exports 
through the food supply chain.
USDA Pandemic Relief Program Opportunities
    GCCA members experienced, and continue to experience, significant 
added expenses as they work to maintain the viability of the food 
supply chain. GCCA has been encouraged by the potential funding 
opportunities that USDA has announced in the forms of loans and grants 
to food logistics companies to help strengthen the food supply chain 
for the future. However, additional details and implementation of the 
programs have yet to be released. The financial impacts of the pandemic 
have placed major constraints on the ability of our members to invest 
in facility improvements and capacity expansions. Resources were 
shifted away from capital budgets to address the extraordinary expenses 
incurred responding to the pandemic. Loans and grants should be made 
available as soon as possible to provide viable capital options so 
these companies can strengthen their infrastructure to meet future 
supply chain needs.
    Thank you for the opportunity to provide testimony on behalf of 
GCCA and its members across the cold chain. The food supply chain has 
shown great resiliency throughout the pandemic, thanks to the efforts 
of essential workers. However, there are opportunities to address 
challenges and strengthen the food supply chain for the future. We 
stand ready to support Congress as it reviews the food supply chain and 
considers new policies, especially as you begin to craft the next farm 
bill. Please let us know how we can be a resource and support these 
important efforts.
            Sincerely,
            
            
Matthew Ott, CAE, CMP President & CEO.
                                Letter 2
  on behalf of graham owens, co-chair, government affairs committee, 
     national industrial hemp council; president, delta agriculture
  Hon. David Scott,
  Chairman,
  Committee on Agriculture,
  U.S. House of Representatives,
  Washington, D.C.;

  Hon. Glenn Thompson,
  Ranking Minority Member,
  Committee on Agriculture,
  U.S. House of Representatives,
  Washington, D.C.

    Dear Chairman Scott and Ranking Member Thompson,

    On behalf of the National Industrial Hemp Council (NIHC)--the only 
Washington, D.C.-based trade association in the hemp industry with a 
mission to protect consumer safety, the consumer's right to know and to 
create a hemp economy that works for everyone--I respectfully submit 
these comments for the record for the November 3, 2021, hearing 
entitled ``The Immediate Challenges to our Nation's Food Supply 
Chain.''
    Producers of industrial hemp are dedicated to utilizing hemp and 
its natural environmental qualities to employ sustainable farming 
methods that will enable the United States to produce plant-based foods 
and animal feeds for generations to come. Regenerative agricultural 
practices and hemp's natural soil-building and carbon-sequestering 
properties will provide new tools for American Agriculture to deliver 
food for a growing population and bring stability to the Food Supply 
Chain in the United States. To this end, we applaud the Committee for 
holding this hearing and your ongoing leadership in ensuring all 
Americans have access to the food they need without compromising the 
health of American farmland.
    One particular issue--and solution--we wish to draw this 
Committee's attention to is the ongoing global feed and grain shortage, 
which has been largely caused by worldwide drought. Congress has the 
opportunity to alleviate this situation through the utilization of our 
country's increasing supply of hemp grain and fiber (hereinafter 
``hemp''). As outlined in detail below and in Appendix A, we urge 
Congress to work with the appropriate regulators to authorize 
industrial hemp for use as a feed ingredient for animals not intended 
for human consumption or the creation of animal byproducts for human 
consumption--especially in the short-term to address the global feed 
shortage.\1\ We further urge Congress to designate funding to better 
enable hemp producers and researchers to study the effects of hemp-
based animal feed on livestock and animal products intended for human 
consumption, which, under this proposal, would still require approval 
by the U.S. Food & Drug Administration's Center for Veterinary Medicine 
(FDA-CVM) to ensure all safety standards are met.
---------------------------------------------------------------------------
    \1\ Nat'l Feed Consortium, Hemp Animal Feed Proposal Overview 
(2021) [Appendix A].
---------------------------------------------------------------------------
    Doing so would not only provide much needed relief to American 
farmers struggling to feed their livestock, but would also create jobs, 
support American farmers, and provide consumers access to healthy, 
affordable food.
A. Congress Must Act Now to Address Global Animal Feed Shortage
    While Americans have only recently started to notice the increased 
prices of basic food staples like eggs, poultry, meat and milk, the 
writing has been on the wall for a long time among our nation's food 
suppliers. The winter storm that hit Texas this year wiped out about 
$600 million in food, not to mention $300 million in loss of 
livestock.\2\ All of this is occurring while many western states and 
regions--including west Texas--are engulfed in extreme or exceptional 
drought.\3\ These issues have only been exacerbated by the ongoing 
global pandemic, which itself has been a stress test for global food 
supply chains. These and other factors have collectively wreaked havoc 
on numerous supply chains and the effects will likely reverberate for 
years to come.
---------------------------------------------------------------------------
    \2\ See, e.g., Hope Ngo, Food Prices Will Continue To Rise in 2021. 
Here's Why, Mashed (Mar. 5, 2021), https://www.mashed.com/349212/food-
prices-will-continue-to-rise-in-2021-heres-why/.
    Editor's note: references annotated with  are retained in 
Committee file.
    \3\ See Danny Dougherty & Peter Santilli, Drought's Toll on U.S. 
Agriculture Points to Even Higher Food Prices, Wall Street Journal 
(July 1, 2021), https://www.wsj.com/articles/droughts-toll-on-u-s-
agriculture-points-to-even-higher-food-prices-11625137201.
---------------------------------------------------------------------------
    Few industries are feeling the impact more than the grain market, 
which is critical to maintaining the livestock Americans depend upon to 
keep affordable food on their tables. As highlighted recently by the 
New York Times, U.S. ranchers simply ``can't grow enough feed for their 
cattle, so they're selling off the animals before they starve.'' \4\ 
Simply put, the drought and resulting animal feed shortage is costing 
farmers their livelihoods, with ranchers that have spent their entire 
lives or generations building their cattle herds to now suddenly be 
forced to sell or cull herds because they simply don't have enough feed 
to maintain them.
---------------------------------------------------------------------------
    \4\ Henry Fountain, The Worst Thing I can Ever Remember: How 
Drought Is Crushing Ranchers, N.Y. Times (Aug. 29, 2021) [Appendix B].
---------------------------------------------------------------------------
    The issue is so dire that even the nation's largest animal protein 
producers are struggling to find sufficient feed. In the effort to meet 
demand, many American protein producers and livestock farmers are 
importing vast quantities of grain. One leading poultry provider was 
forced to secure more than 30,000 metric tons of Brazilian soybeans in 
order to feed its livestock.\5\
---------------------------------------------------------------------------
    \5\ See Fabiana Batista, Michael Hirtzer, & Isis Almeida, Soy 
Buyers `Left With [Virtually] Nothing' in U.S. Turn to Brazil, 
Bloomberg (May 20, 2021), https://www.bloomberg.com/news/articles/2021-
05-20/soy-buyers-left-with-virtually-nothing-in-u-s-turn-to-brazil.
---------------------------------------------------------------------------
B. Hemp Provides the Best Available Solution to Alleviating the 
        Hardships U.S. Farmers and Consumers Are Facing Due to the Feed 
        Shortage, While Greatly Benefiting the U.S. Economy and 
        Environment
    Although the feed shortage is a global problem not unique to the 
United States, our nation is exceptionally situated to be a leader in 
solving the problem. And part of that solution can be found in the hemp 
plant--which ironically enough was illegal to grow in the U.S. until 
very recently. With a change in hemp's legal status should come a more 
concerted effort to use hemp to address the global livestock feed 
shortage.
    It is projected that there will be 201 million pounds of excess 
biomass in the supply chain prior to the 2021 planting season.\6\ Thus, 
while the nation's farmers face a feed and grain shortage, there are 
literally millions of pounds of hemp plant material available right now 
to help feed cattle and other livestock.
---------------------------------------------------------------------------
    \6\ Riley Rice, Growers in Wasco County navigate a young and 
dynamic hemp industry, The Time-Journal (Aug. 30, 2021), https://
timesjournal1886.com/growers-in-wasco-county-navigate-a-young-and-
dynamic-hemp-industry/.
---------------------------------------------------------------------------
    Hemp has all the nutritional traits of other grains used for animal 
feed--and then some. To start, the FDA already evaluated and recognized 
hemp seed oil, hemp hearts, and hemp protein powder as ``Generally 
Recognized as Safe'' (GRAS) for human consumption.\7\ Not only is it 
safe, but it is also one of the only complete plant proteins on the 
planet and is richer in nutrients than many compounds already consumed 
by our livestock, which is why you'll find hemp-based nutritional 
supplements and food products for human consumption in just about any 
grocery store.\8\ Hemp feed is high in protein, contains high amounts 
of omega-3 and omega-6 fatty acids, and can be made into different 
forms of animal feed, including seed, oil, cake, meal, silage, and 
roughage. Several studies show that animals' health improved when fed 
hemp-based diets.\9\
---------------------------------------------------------------------------
    \7\ See U.S. Food & Drug Admin, FDA Responds to Three GRAS Notices 
for Hemp Seed-Derived Ingredients for Use in Human Food  (Dec. 20, 
2018), https://www.fda.gov/food/cfsan-constituent-updates/fda-responds-
three-gras-notices-hemp-seed-derived-ingredients-use-human-food.
    \8\ See Cathleen Crichton-Stuart, Health Benefits of hemp seeds, 
Medical News Today (Sept. 11, 2018), https://www.medicalnewstoday.com/
articles/323037#_noHeaderPrefixedContent.
    \9\ See, e.g., L. Karlsson, M. Finell, & K. Martinsson, Effects of 
Increasing Amounts of Hempseed Cake in the Diet of Dairy Cows on the 
Production and Composition of Milk, Animal 4:11, pp 1854-1860 (2010), 
https://doi.org/10.1017/S1751731110001254.
---------------------------------------------------------------------------
    Last, the hemp plant is uniquely situated to withstand the very 
droughts that created the grain and feed shortage now endangering our 
nation's food supply chain. Hemp needs little water, and therefore 
requires far less irrigation than corn, wheat, or soybeans.\10\ The 
crop needs half as much water as cotton, and significantly less than 
almonds.
---------------------------------------------------------------------------
    \10\ See David Silverberg, New heights but no high--why hemp sales 
are soaring, BBC (Mar. 7, 2019), https://www.bbc.com/news/business-
47400789.
---------------------------------------------------------------------------
    The industrial hemp industry stands ready to work with Congress, 
the U.S. Department of Agriculture, the Food and Drug Administration, 
and all relevant stakeholders to ensure that U.S.-grown hemp can safely 
and effectively help address the global feed shortage and provide much 
needed relief to U.S. meat producers. We all share the Committee's goal 
of ensuring that all Americans have access to sufficient food to meet 
their nutritional needs, and that consumers can trust that all hemp-
derived animal feed is safe and nutritious.
            Sincerely,
Graham Owens,
Co-Chair, NIHC Government Affairs Committee;
President, Delta Agriculture.

CC: Members of the U.S. House of Representatives' Committee on 
Agriculture.
[Appendix A]
[Hemp Animal Feed Proposal Overview]


    The National Feed Consortium (NFC) is a collection of businesses 
and thought leaders working together in a post-partisan fashion to 
advance policies that address the global animal feed shortage. NFC 
advocates for authorizing industrial hemp grain and fiber (hereinafter 
``hemp'') for use as ingredients in animal feed and bedding in the 
United States. Hemp provides the best available solution to alleviating 
the hardships U.S. farmers and consumers are facing due to the feed 
shortage, while greatly benefiting the U.S. economy and environment.
Overview
   NFC proposes policymakers start authorizing hemp for use as 
        feed ingredients for animals not intended for human consumption 
        (e.g., pets; specialty pets; exotic pets; ornamental fish; 
        horses; livestock not intended for human consumption). Feed for 
        livestock intended for human consumption would continue to 
        require FDA-CVM approval to ensure all safety standards are 
        met.

   The global feed shortage is creating unprecedented 
        competition for feed sources. Animal feed is becoming so 
        expensive it's upending global trade flows. Absent action from 
        policymakers, consumers will feel it soon in increased prices.

   This proposal furthers the development of feed regulations 
        and does not avoid them. Authorizing hemp as feed for non-
        production animals will enable U.S. regulators and industry 
        stakeholders the opportunity to fully study its effects, fund 
        additional research and develop long-term regulations based on 
        sound science.
Why Hemp?


           2020 New Frontier DataDSource New 
        Frontier Data.

   Hemp is a superfood! Hemp has all the nutritional traits of 
        other grains used for animal feed and then some. It is richer 
        in nutrients than many compounds consumed by livestock. Hemp 
        feed is high in protein, contains high *
---------------------------------------------------------------------------
    * Editor's note: the bulleted line is incomplete. It has been 
reproduced herein as submitted.

   Abundance of hemp in the United States. There are millions 
        of pounds of hemp grown over the past 2 years are bagged and 
        ready for sale.
What Are the Additional Benefits of Hemp As Animal Feed & Bedding?
   Dual cost benefit. Use of domestic hemp for feed enables 
        U.S. farmers to directly support U.S. ranchers while keeping 
        food costs for consumers low.

   Drought resistant. Hemp needs little water, and therefore 
        requires far less irrigation than corn, wheat or soybeans.

   Increase U.S. competitiveness against global competitors. 
        China currently exports over 60% of the world's industrial 
        hemp. In a struggle to meet traditional feed demand, many 
        American operators are importing vast quantities of feed grain.
Dispelling Common Hemp Feed Myths
   Hemp feed is not marijuana, cannabinoids, or even CBD. While 
        hemp has long been associated with its psychoactive cousin, 
        marijuana, industrial hemp has none of the psychoactive traits. 
        Under U.S. law, hemp cannot contain more than 0.3% THC (the 
        compound most associated with getting a person ``high''). 
        Animal feed comes from hemp grain and fiber and not from 
        cannabinoid or CBD hemp.

   Yes, hemp has been found safe for consumption. The U.S. Food 
        & Drug Administration evaluated and recognized hemp seed oil, 
        hemp hearts, and protein powder as ``Generally Recognized as 
        Safe'' (GRAS) for human consumption.
[Appendix B]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.nytimes.com/2021/08/25/climate/drought-cattle.html]
`The Worst Thing I Can Ever Remember': How Drought Is Crushing Ranchers
          North Dakotans can't grow enough feed for their cattle, so 
        they're selling off the animals before they starve.
        
        
          A truckload of yearling steers from Tom and Kim Fettig's 
        ranch at the Kist Livestock Auction in Mandan, N.D., last 
        month.

By Henry Fountain *
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    * https://www.nytimes.com/by/henry-fountain.

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Photographs by Benjamin Rasmussen

Published Aug. 25, 2021 Updated Aug. 29, 2021

    Towner, N.D.--Darrell Rice stood in a field of corn he'd planted in 
early June, to be harvested in the fall and chopped up to feed the 
hundreds of cows and calves he raises in central North Dakota.
    ``It should be 6, 7, 8 tall,'' he said, looking down at the 
stunted plants at his feet, their normally floppy leaves rolled tight 
against their stalks to conserve water in the summer heat.
    Like ranchers across the state, Mr. Rice is suffering through an 
epic drought as bad or worse than anywhere else in this season of 
extreme weather in the Western half of the country.
    A lack of snow last winter and almost no spring rain have created 
the driest conditions in generations. Ranchers are being forced to sell 
off portions of herds they have built up for years, often at fire-sale 
prices, to stay in business.
    Some won't make it.
    ``It's a really bad situation,'' said Randy Weigel, a cattle buyer, 
who said this drought may force some older ranchers to retire. 
``They've worked all their lives to get their cow herd to where they 
want, and now they don't have enough feed to feed them.''
    Since December, in the weekly maps produced by the United States 
Drought Monitor,\1\ all of North Dakota has been colored in shades of 
yellow, orange and red, symbolizing various degrees of drought. And 
since mid-May, McHenry County, where Mr. Rice ranches and farms, has 
been squarely in the middle of a swath of the darkest red, denoting the 
most extreme conditions.
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    \1\ https://droughtmonitor.unl.edu/.
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    The period from January 2020 to this June has been the driest 18 
months in McHenry and 11 other counties in the state since modern 
record keeping began 126 years ago, according to the National Oceanic 
and Atmospheric Administration.
    ``I've been ranching for 47 years and then this year had to come 
along,'' said John Marshall, who ranches with his son, Lane, not far 
from Mr. Rice in this sprawling county where the county seat, Towner, 
bills itself as the cattle capital of North Dakota. ``It's the worst 
thing I can ever remember.''
    Drought conditions that are affecting nearly half the land area of 
the lower 48 states \2\ are helping send beef prices higher in 
America's grocery stores. But ranchers here say they aren't seeing that 
money--slaughterhouses and other middlemen are. If anything, the 
ranchers said, they are losing money because they are getting less from 
the forced sale of their animals.
---------------------------------------------------------------------------
    \2\ https://www.nytimes.com/2021/08/25/us/drought.html.
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    The Marshalls have already sold about 100 cows and plan to sell at 
least another 120, which would leave them with about \2/3\ of their 
usual herd. ``Never had to do it before,'' Mr. Marshall said.
    Mr. Rice's corn, which is stored as silage to feed his animals 
later in the year, is so short that if he tried to harvest now it he 
couldn't. ``It's unchoppable,'' he said.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Darrell Rice, in an oat field on his ranch outside Towner, 
        N.D., in late June, showed how high the crop would normally 
        have been.
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Corn stalks, curled, stunted and without cobs because of 
        drought, on John and Lane Marshall's ranch.

    If he gets some rain--a big if, as the forecast into the fall is 
for continued heat and dryness--the corn may reach 6, or \1/2\ its 
usual height. Even then he would be looking at a shortage of feed, and 
would very likely have to have his cows weighed at the communal 
ranchers' scale off Main Street in Towner and then sold to a buyer 
elsewhere.
    ``If we don't get silage,'' he said, ``the cows are going to 
town.''
    Rachel Wald, who works for North Dakota State University advising 
and supporting ranchers, said that livestock auction houses, called 
sale barns, had been very busy this spring and summer. ``We've got 
2,000 critters heading down the road each week'' in the county, she 
said. By some estimates, half the cattle in the state may be gone by 
fall.
    For ranchers who have spent years building up the genetics of their 
herd, that can mean a giant step backward. ``Every year we try to 
better our breed,'' said Shelby Wallman, who with her husband, Daryl, 
has been ranching for decades in Rhame, in the southwestern corner of 
the state.
    ``It's a calling,'' she said. ``You spend your entire life with 
these cattle. I can tell you, there's going to be tears.''
    North Dakotans have seen drought many times before. One in 1988 was 
particularly bad, although John Marshall and others who made it through 
that year said the current drought is worse.
    Ranchers point to the variable nature of the climate here--where a 
dry year or 2 may easily be followed by a wet period--instead of 
talking about climate change.\3\ Yet climate change is occurring in 
North Dakota, as it is everywhere else.
---------------------------------------------------------------------------
    \3\ https://www.nytimes.com/2021/08/29/climate/climate-change-
hurricanes.html.
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    ``We're at the epicenter of a changing climate,'' said Adnan Akyuz, 
the state's climatologist and a professor at North Dakota State 
University. The state has warmed by 2.4 Fahrenheit (about 1.3 
Celsius) over the past century, he said. That's one of the largest 
increases in the United States.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Raking what little has grown on Shane Anderson's oat field 
        outside Towner. At summer's end, the field will have produced 
        less than half it would have in a normal year.
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Rachel Wald of North Dakota State University tested levels of 
        sulfates and total dissolved solids concentration in a watering 
        hole on John Marshall's ranch.

    North Dakota's climate is expected to become even more variable, 
with more extreme rainfall and heat. And as elsewhere, droughts are 
expected to grow in intensity and frequency.
    Conditions are highly variable in large part because North Dakota 
is so far from the oceans, which have a moderating effect on climate. 
When the state doesn't get moisture from them, it relies on local 
sources, including lakes, rivers and reservoirs, along with moist air 
that funnels into the region in late spring and summer from the Gulf of 
Mexico.
    But that Gulf moisture did not arrive this year. And heat has dried 
up many of the local water sources. The result is air that sucks all 
the moisture it can from the soil and from plants.
    Signs of drought-stressed vegetation can be seen across McHenry 
County. Stunted silage corn like Mr. Rice's is called pineapple corn, 
because the tight leaves make it look more like a pineapple plant. 
Elsewhere, soybean plants have flipped their leaves over to reduce 
photosynthesis and thus the need for water, giving them a paler green 
appearance.
    And in the Marshalls' pastures, grass that would normally be green 
and reach the knee is brown and stubby.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Lane Marshall, speaking with his father, John, on their 
        ranch. ``It's stuff you don't want to do,'' the elder Mr. 
        Marshall said of selling off cattle.
        
        
          Grazing on stubs of grass on the Marshall ranch.

    The Marshalls rely on clean well water pumped into troughs for most 
of their cattle. But they and other ranchers also use watering holes, 
which collect snow runoff and rain. And as watering holes dry up, 
nutrients and other compounds in the water become more concentrated, 
which can sicken animals.
    In one of the Marshalls' watering holes, the level had dropped by 
several feet. Ms. Wald, from the university, tested for sulfates and 
dissolved solids and told the Marshalls that the water was still good. 
But she noticed something else.
    ``Lane, one of the things I'd watch out for here is actually blue-
green algae,'' she said. Amid the heat the organisms were flourishing 
and could eventually release toxins that could harm cattle. ``If a 
bloom occurs you have to move the animals out of here and find them a 
new water source,'' Ms. Wald said.
    Like other ranchers, the Marshalls have bought supplemental feed. 
But with the drought sending feed prices higher, at some point it makes 
more financial sense to sell animals.
    That has kept auctioneers busy. At a recent sale at Kist Livestock 
Auction in Mandan, just across the Missouri River from Bismarck, 
ranchers in pickup trucks, trailers in tow, lined up to unload cattle 
they couldn't afford to keep.
    Tom Fettig and his wife, Kim, were there with 60 yearlings, about 
half of a herd they were helping their son raise on the outskirts of 
Bismarck. The animals had been bought in February with the goal of 
fattening them until October, when they would be sold to a feedlot.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Tom Fettig looking over his family's steers before they went 
        up for auction at the Kist Livestock Auction in Mandan last 
        month.
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Buyers and sellers at the Kist Livestock Auction on July 28.

    The drought ruined those plans. ``We've only had them out on 
pasture since June 1,'' Mr. Fettig said. ``And there's nothing left.''
    Their hay crop has been abysmal as well. In a normal year they'd 
end up with 800 to 900 bales. So far this year they have only 21.
    Inside the semicircular auction ring, the Fettigs sat on a bench 
and waited for their yearlings to come up for sale. They watched as a 
parade of other animals entered and the auctioneer, Darin Horner, 
rattled off prices in a droning hum. Weights and prices flashed on 
screens above the auctioneer's head.
    ``There's a nice set of steers right off the prairie,'' Mr. Horner 
announced as the Fettigs' animals crowded the ring in two groups of 30. 
They sold for about $1,250 apiece--perhaps $150 a head less, Mr. Fettig 
said, than if they'd been able to feed them all summer.
    The Fettigs and John Marshall are fortunate in that their sons have 
followed them in the ranching business. But Jerry Kist, a co-owner of 
the auction barn, noted that older ranchers whose children have left 
the land were the most vulnerable in this drought, as were younger 
ranchers who don't have ranching parents they can rely on to help them 
become established.
    ``You just don't want to see these guys folding and selling their 
whole cow herd,'' Mr. Kist said.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Washing livestock in preparation for the North Dakota State 
        Fair in Minot last month.

          Henry Fountain specializes in the science of climate change 
        and its impacts. He has been writing about science for The 
        Times for more than 20 years and has traveled to the Arctic and 
        Antarctica. @henryfountain  Facebook \4\
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    \4\ https://www.facebook.com/henryfountain.
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          A version of this article appears in print on Aug. 26, 2021, 
        Section A, Page 1 of the New York edition with the headline: A 
        State So Dry, Ranchers Are Selling Cows Before They Starve.
                                Letter 3
   on behalf of kevin scott, president, american soybean association
November 3, 2021

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
Committee on Agriculture,            Committee on Agriculture,
U.S. House of Representatives,       U.S. House of Representatives,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott and Ranking Member Thompson:

    On behalf of the American Soybean Association (ASA), I write to 
thank you for holding today's hearing on ``The Immediate Challenges to 
our Nation's Food Supply Chain'' and welcome this opportunity to 
provide the Agriculture Committee with background on how current supply 
chain constraints are impacting our industry. ASA represents more than 
500,000 U.S. soybean farmers on domestic and international policy 
issues important to the soybean industry and has 26 affiliated state 
associations representing 30 soybean-producing states.
    From the COVID-19 pandemic to natural disasters, the past few years 
have led to major disruptions to the soybean industry. As you know, 
soybeans and all agricultural commodities rely on a multimodal network 
to move product to market. As such, a strong supply chain built on 
reliable infrastructure systems represents the largest competitive 
advantage for American soybean farmers over our competitors in Brazil 
and Argentina. Unfortunately, the recent supply chain challenges that 
this hearing seeks to address related to transportation and 
infrastructure, input supply, and labor continue to negatively impact 
soybean growers and the agricultural industry as a whole; but we are 
thankful that the soybean supply is not one of these challenges.
    Currently, the largest supply chain constraint facing the 
agriculture sector is an inadequate labor supply. While challenges 
exist throughout the supply chain, long-term commercial truck driver 
shortages have been compounded by COVID-19. Current estimates suggest 
that over 60,000 drivers are required just to meet current demands. 
Hurdles to hiring qualified drivers and a state patchwork of weight 
limits have further exacerbated market failures. Transportation costs 
to bring inputs to farms or haul farm goods have risen dramatically, 
due to both trucking constraints and dramatic increases in Mississippi 
barge and ocean-going vessel rates. These labor and transportation 
challenges continue to squeeze soybean farmers' margins.
    We are also greatly concerned about disruptions to input supply 
chains, which have resulted in significant shortages and price hikes on 
essential products, such as fertilizer and pesticides. Soybean growers 
are dependent upon fertilizers to ensure plants receive proper 
nutrients throughout the growing season. Nitrogen, phosphorus, and 
potassium--the three major fertilizers utilized by soybean producers--
have experienced significant price increases over the past year. 
Multiple factors have played a role in these price increases, including 
the COVID-19 pandemic, trade actions by the U.S. International Trade 
Commission, transportation costs, and global demand. ASA members who 
have been able to guarantee fertilizer availability for next planting 
season have relayed being quoted prices up to six times as high as they 
were in 2021. The price of monoammonium phosphate (MAP) is reported to 
be up by 72% this year. In other cases, retailers are not even able to 
guarantee these inputs will be available at all in spring 2022.
    Major herbicides used on hundreds of millions of crop acres have 
seen similar challenges. In recent months some chemistries have 
experienced doubling in price or more, assuming supplies can be 
obtained at all due to shortages. While there are a number of factors 
that have impacted pesticide markets, such as labor shortages and 
natural disasters, we strongly urge regulatory agencies to first do no 
harm and not make the situation worse. Should regulatory changes occur 
for pesticide registrations that would result in significant product 
and variety demand shifts ahead of the 2022 growing season, it could 
inflict an even greater shock that supply chains would be unable to 
accommodate.
    The supply chain challenges highlighted above underscore the 
unfortunate fact that prices have increased for soybean oil, as well as 
a number of other agricultural products. During this hearing, testimony 
suggested that the expansion of renewable fuels capacity is both 
inflating the price of soybean oil and creating rationing and shortage 
concerns for the food industry. The data tells a more complicated 
story. America's soybean growers are currently in the process of 
harvesting another record soybean crop--over 4.4 billion bushels--and 
are poised to meet market demands from both food and biofuels sectors. 
While soybean growers look forward to meeting increased demand from the 
biofuels sector in the future, the overall use of soybean oil for 
biofuels has not increased in 2021 compared to 2020 while domestic 
soybean oil supplies are projected to reach a record high by USDA.
    While we expect to see an increase in soybean oil demand in the 
years ahead, we are excited about several announcements for new 
facilities or plant expansions that will increase domestic crushing 
capacity by about 13%. U.S. soybean growers are proud to play a part in 
offering a homegrown energy solution through biodiesel and renewable 
diesel and believe that we have the capacity to meet market demands for 
food, feed, fuel, and other soy-based products.
    ASA appreciates your continued focus on supply chain challenges 
impacting the agricultural sector and your consideration of our 
comments. We look forward to continuing to work with the Committee to 
address the needs of soybean growers and the agricultural industry at 
large.
            Sincerely,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Kevin Scott,
President.
                                Letter 4
on behalf of hon. stephanie stuckey, chief executive officer, stuckey's 
                              corporation
November 2, 2021

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
Committee on Agriculture,            Committee on Agriculture,
U.S. House of Representatives,       U.S. House of Representatives,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott and Ranking Member Thompson:

    Thank you for the opportunity to provide my perspectives at today's 
hearing on ``Immediate Challenges to our Nation's Food Supply Chain''. 
I am particularly grateful for the opportunity to cross paths again 
with Chairman Scott, a former Georgia State Legislature colleague of 
mine and my father Billy's.
    As the Chairman knows, Stuckey's, the multi-generational family-run 
small business that I currently operate, is part of the fabric of 
Georgia, creating jobs and lasting memories throughout the state and 
the entire Southeast. My grandfather Sylvester founded Stuckey's as a 
roadside pecan stand along Highway 23 in Eastman, Georgia in 1937. He 
traveled the state, buying pecans from local farmers to sell at his 
stand, along with local honey and souvenirs. My grandmother, Ethel, 
added her delicious homemade candies--southern delicacies like 
pralines, Divinities, and our iconic Pecan Log Rolls.
    Today, I am proud to carry on the legacy Sylvester and Ethel built, 
and while our business is always on the lookout for opportunities to 
grow, we face several challenges--some that existed before the COVID-19 
pandemic, and some that have been exacerbated by it.
    One of our major supply chain challenges is the perpetual problem 
of the U.S. Sugar Program, which adds significant supply and cost 
pressures to my business and so many other food manufacturing 
businesses across the country. The U.S. Sugar Problem severely 
restricts the supply of sugar in the United States to artificially 
inflate prices. American businesses that rely on a steady supply of 
sugar to make their products always pay more, sometimes two to three 
times more, than what our competitors pay for sugar on the global 
market.
    The United States does not and cannot grow enough sugar to meet 
demand. Yet, under current law, in times of sugar shortage, domestic 
sugar producers and processors are restricted from expanding output 
because they are subject to legally binding marketing allocations. Even 
worse, sugar imports are not permitted to meet demand because they are 
subject to strict import quotas, and the government's hands are tied by 
law from taking steps on the world market to increase import 
allocations from countries with excess sugar.
    Sugar is a major commodity used in billions of dollars of food 
manufacturing, yet Federal statute severely restricts the supply of 
sugar, and prevents regulators from making real-time decisions to 
increase supply and prevent shortages. We at Stuckey's have felt this 
problem more acutely this year than ever before. In fact, one of our 
main suppliers has suffered serious shortages and delays in getting us 
one of our main ingredients because they do not have access to enough 
sugar. As the Committee considers solutions to supply chain problems, I 
strongly encourage you to reform the U.S. Sugar Program.
    In addition, we are also dealing with increased costs and delays in 
shipping, and difficulties getting the raw ingredients needed to make 
our many products. Perhaps our largest supply chain issue right now has 
been securing a manufacturing workforce. We are hiring constantly and 
investing in training only to have the new trainees leave before our 90 
day introductory period has ended. The labor force issue has deeply 
limited our ability to pursue new sales and grow our business, and I 
encourage Congress to invest in workforce development programs to 
address these problems.
    Thank you, Chairman Scott and Ranking Member Thompson, for your 
tremendous leadership, and for the opportunity to offer these comments 
for your consideration. I am grateful for the Committee's interest in 
my perspective on the many supply chain challenges this country faces.
            Sincerely,

Stephanie Stuckey,
Chief Executive Officer,
Stuckey's Corporation.
                                 ______
                                 
   Submitted Comment Letter by Hon. David Scott, a Representative in 
    Congress from Georgia; Authored by Agricultural Transportation 
                             Working Group
October 18, 2021

  Hon. Pete Buttigieg,
  U.S. Department of Transportation
  Washington, DC 20590-0001

  RE: Docket No. DOT-OST-2021-0106

    Dear Secretary Buttigieg:

    The associations that make up the Agricultural Transportation 
Working Group (ATWG) submit this statement in response to the U.S. 
Department of Transportation's (USDOT) request for information that 
will be used to prepare a report for President Biden on supply chains 
for the industrial base.
    The undersigned agricultural producer, commodity, agribusiness and 
food-related national organizations respectfully request the Biden 
Administration's support to advance transportation infrastructure and 
policies for truck, rail, waterways and ports that will enhance the 
efficient and cost-effective transport of agricultural and food 
products. The farmers, ranchers, food and beverage manufacturers, 
processors, package suppliers, farm supply dealers and agricultural 
product marketers that comprise our collective memberships are 
dedicated to providing safe, abundant, affordable and sustainably 
produced human and animal food, fiber and other agricultural products 
that directly benefit U.S. and global consumers and contribute 
significantly to U.S. economic growth and trade. Importantly, they also 
support and sustain millions of American jobs, many in rural 
communities.
    The COVID-19 pandemic and subsequent surge in consumer demand has 
resulted in major supply chain disruptions, including in the food and 
agricultural supply chain. The disruptions are ongoing, and the work 
performed by President Biden's Supply Chain Disruptions Task Force that 
is co-chaired by the Secretaries of Transportation, Agriculture and 
Commerce is important to support resilient, diverse, and secure supply 
chains. Such supply chains are buttressed by strong transportation 
infrastructure and flexible policy and are needed to ensure America's 
farmers, ranchers, commodity handlers, processors and food 
manufacturers can reliably deliver high-quality, cost-effective 
products to domestic and global consumers.
    More needs to be done to institutionalize the lessons that are 
being learned from the pandemic to ensure resiliency of the food and 
agricultural supply chain. We respectfully offer for your consideration 
the following recommendations:
Labor
    Presently, inadequate labor availability is the largest supply 
chain constraint facing the U.S. agricultural industry. ATWG members 
are unable to fill open positions throughout the production, 
transportation, warehousing, and processing phases of the supply chain. 
These shortages are directly impacting our members' ability to meet 
consumer demands. Not only does a labor shortage make it difficult to 
keep pace with open positions, but it also makes it more challenging to 
add shifts to keep pace with increasing demand for agricultural 
products. The lack of access to labor threatens operations and supply 
chain resiliency and leads to lost productivity and higher prices for 
food and agricultural products along the supply chain.
    During the pandemic, as agriculture continued to operate while also 
prioritizing the health and safety of their employees, the shortages of 
personal protective equipment, disinfectants, and other COVID-19 
mitigation tools created challenges. In planning for the next crisis, 
the U.S. Government should ensure that the food supply chain continues 
to be deemed essential and receives priority access to necessary 
supplies in future response plans. Furthermore, the U.S. Government 
should consider efforts to create national stockpiles of supplies, such 
as respirators and face masks which are required for application of 
certain pesticides.
    Specifically, within DOT's jurisdiction, policies to increase 
trucking productivity would be helpful as would harmonizing the Federal 
truck driving age limit with the state age limit to provide a more 
accessible pathway into the trucking industry for drivers aged 18-20.
    Another specific concern is how a forthcoming Emergency Temporary 
Standard (ETS) regarding vaccines is implemented. We support the use of 
vaccines to fight the spread of COVID-19, but as announced, the ETS 
could cause serious labor disruptions for agribusinesses. We encourage 
the Administration to continue to recognize the critical infrastructure 
status of the food and agriculture sector and provide flexibility for 
agricultural employers to avoid the negative effects a vaccine mandate 
would have on the efficiency and reliability of the agricultural supply 
chain. We would like to partner in developing solutions and educational 
programs that will expand the number of vaccinated workers without 
introducing additional risks to the agricultural supply chain.
Climate Policy
    The ability for the U.S. food and agricultural sector to continue 
as the world's largest hinges on the availability of cropland to 
produce raw agricultural commodities. The production of raw 
agricultural commodities is the beginning and most important part of 
the food and agricultural supply chain. An abundant, affordable, 
sustainable, and wholesome supply of raw agricultural commodities is a 
prerequisite for the remaining steps in the food and agricultural 
supply chain.
    Due to the inherent linkage between the first step in the food and 
agricultural supply chain, the production of raw agricultural 
commodities, and the climate change policies that are under 
consideration, the ATWG urges the Transportation, Agriculture and 
Commerce Departments to assess their climate change policies and supply 
chain policies in tandem. Policies that idle cropland and reduce U.S. 
agricultural output result in less U.S. agricultural market share and 
harm rural economies.
    As an alternative to cropland idling climate change polices, the 
ATWG urges the U.S. Department of Agriculture (USDA) to prioritize 
Federal resources toward working land programs to achieve large 
environmental and economic benefits by incentivizing broader adoption 
of best management farming and ranching practices across potentially 
hundreds of millions of our nation's best acres for agricultural 
production.
Transportation Policy and Infrastructure
    The ATWG recommends strengthening U.S. freight transportation 
policy and infrastructure to help ensure there are many efficient ways 
for agricultural commodities and products to flow throughout the 
agricultural supply chain. The ATWG believes the U.S. freight 
transportation system can be strengthened through the following ways:

  1.  Adopt solutions to better balance the needs of ocean carriers 
            with the needs of our agricultural exports.

  2.  Increase Federal investment to modernize U.S. inland waterways 
            locks and dams--particularly those on the Upper Mississippi 
            River and Illinois River (UMR-IR) System--and fully 
            utilizing the Harbor Maintenance Trust Fund for its 
            intended purpose of dredging U.S. ports and harbors.

  3.  Foster increased competition among freight railroads and other 
            transportation modes, provide a better method for 
            challenging unreasonable rail rates and require railroad 
            carriers to provide increased access to railroad service 
            data to enhance agricultural supply chain operations.

  4.  Increase motor carrier capacity through regulatory reform and 
            legislative change and investing strategically in rural 
            roads and bridges through collaboration with states.
Container Shipping
    We are supportive of efforts to better balance the needs of ocean 
carriers with the needs of our agricultural exports. Concerns over 
ocean carriers and terminals practices at U.S. ports include ignoring 
the Federal Maritime Commission's existing demurrage and detention 
guidelines, making containers unavailable to carry agricultural export 
cargo, canceling or refusing export container bookings and a persistent 
lack of timely notice of changes to U.S. shippers.
    The lingering effects of the COVID-19 pandemic's shock to global 
trade have resulted in a backlog of container ships waiting to unload 
outside the West Coast's most critical shipping ports. Ongoing 
congestion and related logistical obstacles threaten U.S. farmers' and 
ranchers' ability to meet much-welcome increases in foreign demand for 
our products.
    Elevated imports and exports have caused considerable congestion 
both on water and land as the ports fill with the extra containers. To 
avoid congestion and to get containers back to Asia as quickly as 
possible so that they can be refilled with more import goods, there has 
been an increase in the shipment of empty containers out of the West 
Coast ports. Some consider it more efficient to ship empty containers, 
rather than waiting for export goods to be loaded, which has led to a 
significant decline in the number of containers available to 
agricultural exporters.
    Across California's three major ports, the shipment of empty 
containers jumped 56% from an average of 1.16 million TEUs (20 
equivalent units) in the first quarters of 2018-2020 to 1.81 million 
TEUs in the first quarter of 2021. Compared to the first quarter of 
2020 alone, the first quarter of 2021 represents an 80% increase in 
empty export container units. At the Port of Los Angeles, in 2021, 
through July, nearly 75% of all exported containers were empty. 
Accessibility to export containers has been further limited by record 
shipping costs and harmful surcharges. With these factors combined, the 
ability for farmers and ranchers to fulfill oversees contracts has been 
significantly impacted, with some estimations nearing $1.5 billion in 
lost agricultural exports.
    All these harmful patterns are contributing to supply chain 
dysfunction, increased costs for U.S. agricultural exporters and 
preventing U.S. shippers from capturing export opportunities. The ocean 
shipping industry has vastly changed in recent years, increasingly to 
the detriment of U.S. exporters.
Inland Waterways
    A modern, efficient inland waterways transportation system (locks 
and dams) is critical to U.S. agriculture and the entire U.S. economy. 
Our nation's inland water navigation system is a low-cost and 
environmentally sustainable way to get crop inputs, such as fertilizer 
and farm supplies, to farmers and for delivering harvests, such as 
grains and other crops, to domestic and international markets. In 2020, 
the United States exported 29 percent of its grains and oilseeds. Of 
this quantity, more than half transited the Mississippi River System, 
while 29 percent moved through the Columbia-Snake River System in the 
Pacific Northwest, and five percent was shipped through the Texas Gulf. 
U.S. agricultural exports traditionally contribute a nearly $15-$20 
billion surplus to the U.S. balance of trade, as well as provide 
upwards of 20 percent of U.S. farm income.
    Unfortunately, most locks on the UMR-IR System were built in the 
1930's and have long surpassed their projected 50 year design life. 
These locks were built when 600 locks were the standard. Today, a full 
barge tow is 1,200 so upgrading this aging infrastructure is a 
necessity and will strengthen U.S. agricultural competitiveness and the 
resilience of the country's supply chain. A 2016 study by the 
University of Tennessee and funded by USDA, looked at two locks along 
the UMR-IR and found that unscheduled outages would result in the loss 
of 12,500 jobs and reduce economic activity by $4.2 billion.
    Another significant study issued in August 2019 and conducted by 
Agribusiness Consulting (formerly Informa Economics) under a contract 
with the USDA Agricultural Marketing Service, entitled ``Importance of 
Inland Waterways to U.S. Agriculture'', quantified both the critical 
connection between the inland waterways and the competitiveness of 
American agriculture in global markets, as well as the economic costs 
of delaying renovation of America's river transport network.
    Among other things, the study found that the inland waterways 
system saves between $7 billion to $9 billion annually over the cost of 
shipping by other modes (values based on all goods currently being 
moved on the water compared to the same volume transported by rail). It 
also found that every dollar of waterways activity output results in 
$1.89 in additional U.S. economic activity directly related to the 
waterways.
    Most significantly, the study found that compared to the status 
quo, increasing investment in the inland waterways system by $6.3 
billion over a 10 year period (through 2029) and $400 million per year 
thereafter through 2045 cumulatively would grow the waterways' 
contribution to U.S. gross domestic product by 20 percent (to $64 
billion) and increase waterways-related employment by 19 percent, to 
472,000 jobs. The study says this option would more than offset the 
cost of completing all the proposed projects and would increase the 
market value of U.S. corn and soybeans by $39 billion. Conversely, 
reduced investment would decrease the market value of those commodities 
by $58 billion.
    In addition to the economic and competitiveness enhancing benefits 
of the inland waterways transportation system, the environmental and 
energy efficiency qualities must also be recognized. According to a 
2017 study by the Texas A&M Transportation Institute prepared for the 
National Waterways Foundation, barge transportation produces the least 
amount of CO2 emissions compared to rail (30% more) & truck 
(1,000% more). Further, a 15-barge tow can carry the same amount of 
cargo as 1,050 semi-trucks or 216 railcars. Barge transportation is the 
most fuel-efficient form of surface transportation and policymakers 
should prioritize the modernization of U.S. locks and dams in any 
infrastructure bill as well as the annual appropriations process.
    Specifically, the ATWG urges support for the funding and 
construction of the top 15 lock and dam projects identified by the Army 
Corps of Engineers in the 2020 Capital Investment Strategy (CIS). The 
CIS outlines a scenario where all 15 projects could be constructed in 
10 years at a cost of $7 billion. This includes seven additional 1,200 
locks on the Upper Mississippi River and Illinois Waterway as part of 
the Navigation Ecosystem Sustainability Program (NESP). Lock and Dam 25 
on the Upper Mississippi River is part of NESP, and the top ranked new 
construction start on this list of 15 priority projects. The ATWG urges 
USDA to continue to reinforce with Congress and the Office of 
Management and Budget, the importance of funding and constructing the 
NESP locks and dams to bring U.S. inland waterways transportation into 
the 21st century.
Rail Competition and Service
    Rail transportation remains an important mode for transporting 
agricultural products, even though its modal share has declined 
significantly. While truck and water transportation are often viewed as 
potential competitors to rail, they have significant limitations that 
prevent them from providing effective competition on all but a narrow 
range of movements. Water transportation cannot compete with rail 
except for traffic moving between an origin and destination on a 
navigable waterway. Truck transportation is significantly less 
efficient than rail, making it uncompetitive except for short 
distances. Today, four railroads haul more than 90 percent of all 
freight rail traffic and rail rates \1\ have crossed a threshold that 
can make truck transportation the only viable option for many shippers.
---------------------------------------------------------------------------
    \1\ Rail rates to ship anhydrous ammonia, which is a key ingredient 
for 75% of the essential fertilizers utilized by farmers, have 
increased over 200% in the past 20 years.
---------------------------------------------------------------------------
    Rail carrier implementation of large cost-cutting initiatives, such 
as so-called precision scheduled railroading (PSR), have disrupted rail 
service to many agricultural shippers. PSR focuses on removing network 
capacity in rail carrier operations to increase their operating-ratio 
profits. The loss of this capacity generally results in poor service 
for shipping and receiving customers and removes substantial rail 
network elasticity. This can turn an upward change in demand or a 
weather event into a severe and long-lasting disruption to service. The 
removal of capacity through PSR may make the rail carriers slightly 
more profitable but it comes at a high cost for rail customers in the 
agricultural sector.
    The ATWG believes it is necessary to seek all available options to 
increase competition among freight railroads and other transportation 
modes and provide shippers and receivers with increased access to 
railroad service information to enable informed business and capital 
investment planning.
    The Surface Transportation Board (STB) can increase competition 
among railroads by finalizing a long-pending proceeding on reciprocal 
(also referred to as ``competitive'') switching. Competitive switching 
will enable shippers and receivers that are captive to one rail 
carrier, but are near a second rail carrier, to gain access to the 
second carrier via a short distance switch.
    For shippers and receivers that are not close to a second rail 
carrier to benefit from competitive switching, there is a rulemaking 
underway at STB--known as the Final Offer Rate Review--that the ATWG 
hopes will result in a more streamlined, simplified, and less costly 
process for challenging unreasonable rail rates.
    Last, greater access to rail carrier data is needed by shippers and 
receivers to help optimize their supply chain operations. The ATWG 
commends STB for requesting information on first-mile/last-mile rail 
service, which is an often overlooked, but extremely important area in 
the agricultural supply chain.
    While STB has jurisdiction over disputes related to railroad 
service and rates, there are some areas where the USDOT can help. The 
DOT has delegated authority to the rail industry via the Association of 
American Railroads (AAR) Tank Car Committee (TCC). For many years, 
shippers have been trying to work with AAR and DOT to reform the 
processes of the TCC. Historically, TCC has imposed measures on 
shippers that raise serious concerns about the extent of TCC authority. 
While this is a complicated issue, to date, DOT has not responded to a 
shipper-industry petition filed in 2016 on this matter.\2\ In recent 
years, regulatory actions imposed or initiated by the TCC, without a 
cost-benefit analysis, have raised shipping costs for the fertilizer 
industry by millions of dollars. DOT can and should make an effort to 
reform the AAR Tank Car Committee.
---------------------------------------------------------------------------
    \2\ Petition No. P-1678; Docket No. PHMSA 2016-0093.
---------------------------------------------------------------------------
Motor Carrier Freight Transportation Efficiency
    The ATWG believes supply chain resiliency can be enhanced by 
strengthening the motor carrier freight transportation sector through 
streamlined and cost-effective regulatory and/or legislative policy. To 
increase transportation capacity and efficiency of this sector, the 
ATWG recommends the following regulatory and legislative policies:

  1.  Adoption of policies to mitigate the ongoing truck driver 
            shortage, such as removing the commercial driver's license 
            (CDL) restrictions on drivers aged 18-20 that creates an 
            obstacle to recruiting a new generation of drivers into the 
            industry. There are 49 U.S. states that allow 18 year olds 
            to obtain a CDL, but Federal law prohibits them from 
            driving across state lines until they are 21. The ATWG is 
            supportive of pathways that include additional training to 
            bring more drivers aged 18-20 into the industry.

  2.  With the challenges facing supply chains and a shortage of 
            drivers, we continue to see bottlenecks, supply constraints 
            and increased costs when moving goods across the country. 
            As we saw in the early days of the pandemic, much of the 
            agriculture supply chain relies on just-in-time delivery. 
            This is also extremely important when considering the need 
            for animal feed, farm supplies to arrive at the appropriate 
            time during planting season as well as completing harvest 
            before crops spoil or the season ends. It is also critical 
            that we can safely transport our live animals and insects 
            to their destinations without delay.

        We recommend that USDA and USDOT continue to coordinate to 
            ensure agricultural haulers and the rest of the trucking 
            industry have the flexibilities needed to provide timely 
            delivery of essential products. Flexibilities such as 
            relief from Hours-of-Service requirements have been 
            critical over the last 18 months. Our industry has proven 
            that we can maintain a high level of safety while also 
            efficiently delivering wholesome and affordable food to the 
            American consumer.

  3.  Adoption of a 10% axle tolerance for dry bulk shipments. This 
            bipartisan policy, supported by Rep. Anthony Brown (D-Md.) 
            and Rep. Mike Gallagher (R-Wis.), was included in H.R. 
            3684,* the INVEST in America Act.
---------------------------------------------------------------------------
    * https://www.congress.gov/bill/117th-congress/house-bill/
3684?q=%7B%22search%22%3A
%5B%22H.R.+3684%22%5D%7D&s=1&r=1.

        Load shifts during transport can result in tickets for drivers 
            because a portion of the truck becomes heavier than allowed 
            under current law, even though the overall truck weight is 
            below the Federal truck weight limit of 80,000 pounds. The 
            ATWG supports this policy already adopted by 38 states on 
            state/county roads that authorizes an axle weight tolerance 
---------------------------------------------------------------------------
            to account for this shifting during transport.

  4.  Adoption of a pilot program to achieve economic and environmental 
            efficiencies through a modest increase in Federal truck 
            weight limits.

        Lower Interstate Highway System truck weight limits relative to 
            state road truck weight limits are a barrier to economic 
            and environmental efficiency. The 80,000-lbs. gross vehicle 
            weight (GVW) limit on Interstate Highways has been in place 
            since 1982 despite major advancements in vehicle safety and 
            paving technology.
        If a state's truck weight limit for its roads is 91,000 pounds 
            and the Interstate Highway weight limit is 80,000 pounds, 
            and the route includes an Interstate Highway then the 
            driver's utilized freight limit is only 80,000 pounds. This 
            can prevent trucks from utilizing the best shipping route 
            if it includes Interstate Highways, which are our nation's 
            safest and best built and maintained roads. A tractor-
            trailer combination loaded to 80,000 pounds carries 
            approximately 50,000 pounds of freight. At 91,000 pounds, 
            the tractor-trailer combination carries about 60,000 pounds 
            of freight, amounting to about a 20 percent increase in 
            freight efficiency and an associated reduction in its 
            carbon footprint.
        The ATWG urges authorization of an opt-in pilot program to 
            modestly increase truck weight limits by allowing 91,000-
            lb., six-axle vehicles on Federal Interstate Highways in 
            ten states. This configuration complies with the Federal 
            bridge formula and is shown to have better braking capacity 
            than 80,000-lb., five-axle trucks.
        In March 2020, Congress provided states with the option to 
            determine truck weight limits for 120 days through Section 
            22003 of the CARES Act and the ensuing trucking 
            efficiencies were gained safely.

  5.  Maintaining the existing minimum financial liability coverage 
            level for motor carriers. Efforts to increase liability 
            insurance for motor carriers beyond the current $750,000 
            level will increase freight costs without any known safety 
            benefits. Annual premiums for each truck are already 
            significant at about $5,000 per year. Whereas the minimum 
            automobile liability insurance for most states is less than 
            $100,000, which is inequitable to the $750,000 minimum for 
            truck financial liability. Raising the minimum financial 
            liability coverage level for motor carriers will increase 
            the already inequitable difference between coverage for 
            automobiles and motor carriers.

  6.  Support necessary reforms to modernize the Farm-Related 
            Restricted CDL program, which has currently been adopted by 
            24 states. The Farm-Related Restricted Commercial Driver's 
            License (CDL) or more commonly referred to as the 
            ``Seasonal Ag CDL'' program has been an essential seasonal 
            program for farm-related service industries since 1992. 
            These industries have a very strong transportation safety 
            record and it has not been diminished since these Federal 
            regulations have been in place. The Seasonal Ag CDL program 
            has helped promote economic growth for America's 
            agricultural industries serving the essential needs of 
            farmers during the busy planting and harvesting seasons. 
            Due to challenging weather events, the increase in crop 
            production diversification, technological advances and 
            weight increases in light duty pickup trucks and 
            agricultural equipment over the past several decades, it is 
            necessary to modernize the Federal regulations providing 
            the framework for these state administered programs. The 
            temporary shutdown of the state Department of Motor 
            Vehicles offices throughout the nation during the height of 
            the [COVID-19] pandemic also caused major disruptions for 
            farm-related service industries and their rural 
            communities.

        More flexibility is needed and can be provided by expanding the 
            total days allowed to utilize Farm-Related Restricted CDL 
            drivers by up to 270 days to accommodate for the longer 
            seasons, which can fluctuate from year to year due to 
            climate change as well as more diversified crop production. 
            Individual states would maintain the ability to set the 
            seasons these days could be utilized by the industry. The 
            new 12 month seasons restart should occur each calendar 
            year on January 1 to prevent any overlap of seasons from 
            the previous year and the requirement for an in-person 
            seasonal renewal should be eliminated.
Concluding Statement
    The ATWG commends the Departments of Transportation, Agriculture 
and Commerce for seeking ways to support resilient, diverse, and secure 
supply chains to help ensure U.S. economic prosperity and national 
security. Such supply chains are needed to ensure America's farmers, 
ranchers, commodity handlers, processors and food manufacturers can 
reliably deliver high-quality, cost-effective products to domestic and 
global consumers.
    The ATWG's most pressing recommendation is to address labor 
availability, which is among the largest supply chain constraints 
facing the agricultural sector. The lack of access to labor threatens 
operations and supply chain resiliency and leads to lost productivity 
and higher prices for food and agricultural products along the supply 
chain. Specifically, within DOT's jurisdiction, policies to increase 
trucking productivity would be helpful as would harmonizing the Federal 
truck driving age limit with the state age limit to provide a more 
accessible pathway into the trucking industry for drivers aged 18-20.
    Further, the ATWG recommends USDA agencies collaborate on their 
climate change and supply chain polices due to their inherent linkage 
to the production of raw agricultural commodities--the first step in 
the food and agricultural supply chain and the most likely step to be 
impacted by climate change policies. As an alternative to cropland 
idling climate change polices, the ATWG urges USDA to prioritize 
Federal resources toward working land programs to achieve large 
environmental and economic benefits by incentivizing broader adoption 
of best management farming and ranching practices.
    The ATWG supports strengthening U.S. freight transportation policy 
and infrastructure to help ensure there are many efficient ways for 
agricultural commodities and products to flow throughout the 
agricultural supply chain. The ATWG believes the U.S. freight 
transportation system can be strengthened through the following ways:

  1.  Adopt solutions to better balance the needs of ocean carriers 
            with the needs of our agricultural exports.

  2.  Increase Federal investment to modernize U.S. inland waterways 
            locks and dams--particularly those on the UMR-IR System--
            and fully utilizing the Harbor Maintenance Trust Fund for 
            its intended purpose of dredging U.S. ports and harbors.

  3.  Foster increased competition among freight railroads and other 
            transportation modes, provide a better method for 
            challenging unreasonable rail rates and require railroad 
            carriers to provide increased access to railroad service 
            data to enhance agricultural supply chain operations.

  4.  Increase motor carrier capacity through regulatory reform and 
            legislative change.

    Thank you for this opportunity to provide information that will be 
used to prepare a report for President Biden on supply chains for the 
industrial base. We believe our responses provide ideas to support 
supply chain policies that will allow U.S. farmers, ranchers, commodity 
handlers, processors, and food manufacturers to reliably deliver high-
quality, cost-effective products to domestic and global consumers.
    We look forward to working with you to support U.S. agriculture's 
adoption of resilient, diverse, and secure supply chain practices.
            Sincerely,

 
 
                Agricultural Transportation Working Group
 
Agricultural and Food Transporters   National Council of Farmer
 Conference                           Cooperatives
Agricultural Retailers Association   National Grain and Feed Association
Agriculture Transportation           National Grange
 Coalition
Amcot                                National Grocers Association
American Beekeeping Federation       National Milk Producers Federation
American Farm Bureau Federation      National Oilseed Processors
                                      Association
American Feed Industry Association   National Potato Council
American Frozen Food Institute       National Sorghum Producers
American Pulse Association           National Sunflower Association
American Seed Trade Association      North American Millers' Association
American Sheep Industry Association  North American Renderers
                                      Association
American Soybean Association         Pet Food Institute
Corn Refiners Association            Specialty Soya & Grains Alliance
Farm Credit Council                  The Fertilizer Institute
Fresh Produce Association of the     United Dairymen of Arizona
 Americas
Growth Energy                        United Fresh Produce Association
Hardwood Federation                  United States Cattlemen's
                                      Association
Institute of Shortening and Edible   USA Dry Pea & Lentil Council
 Oils
International Dairy Foods            USA Rice
 Association
Livestock Marketing Association      U.S. Canola Association
National Aquaculture Association     US Dry Bean Council
National Association of Wheat        U.S. Pea & Lentil Trade Association
 Growers
National Barley Growers Association  U.S. Poultry & Egg Association
National Cattlemen's Beef            Waterways Council, Inc.
 Association
National Corn Growers Association    WineAmerica
National Cotton Council
 

                                 ______
                                 
Submitted Statements by Hon. David Scott, a Representative in Congress 
                              from Georgia
                              Statement 1
 on behalf of julie anna potts, president and chief executive officer, 
                     north american meat institute
    On behalf of the North American Meat Institute (NAMI or the Meat 
Institute) based in Washington, D.C., and its 724 member companies 
around the country, thank you for the opportunity to submit this 
testimony.
    The Meat Institute is the United States' oldest and largest trade 
association representing packers and processors of beef, pork, lamb, 
veal, turkey, and processed meat products. NAMI members include more 
than 350 meat packing and processing companies, large and small, and 
account for more than 95 percent of the United States' output of meat 
and 70 percent of turkey production. The Meat Institute provides 
legislative, regulatory, international affairs, public relations, 
technical, scientific, and educational services to the meat and poultry 
packing and processing industry.
    In July, NAMI and eleven other organizations representing livestock 
producers, farmers and companies who produce the vast majority of 
America's meat, poultry, and dairy, as well as animal feed and 
ingredients, unveiled the Protein PACT for the People, Animals, and 
Climate of Tomorrow.i The Protein PACT is the first joint 
initiative designed to accelerate momentum and verify progress toward 
global sustainable development goals across all animal protein sectors 
to ensure customers, consumers, and policy makers trust that meat 
aligns with their sustainability expectations.
---------------------------------------------------------------------------
    \i\ https://www.meatinstitute.org/ht/display/ReleaseDetails/i/
192863/pid/287.
    Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    Through the Protein PACT, Meat Institute members have developed 
robust metrics for continuous improvement and publicly committed to 
sustain healthy animals, thriving workers and communities, safe food, 
balanced diets, and the environment and align with the United Nations' 
2030 Sustainable Development Goals.ii
---------------------------------------------------------------------------
    \ii\ https://sdgs.un.org/goals.
---------------------------------------------------------------------------
COVID-19 Affected the Cattle and Beef Markets.
    The COVID-19 pandemic was a shock to the meat supply chain, as it 
was for every industry in America, and the shock continues to 
reverberate today, as evidenced in labor availability, consumer demand, 
and throughout the supply chain.
    During 2020, pandemic-related plant interruptions temporarily idled 
about 40 percent of slaughter capacity for cattle and hogs at the peak 
of its impact. This disruption happened in tandem with unprecedented 
retail demand for beef due to panic buying and freezer stocking as 
shelter-in-place orders were effectuated. The situation was worsened by 
the significant operational changes needed to rebalance production, 
processing, and distribution away from foodservice toward retail. The 
cuts, product sizes, processing equipment, packaging, and distribution 
vary considerably between retail and foodservice and are not easily 
transitioned, but the industry was resilient and adapted.
    The shift from foodservice to retail had a dramatic impact. In 
2020, retail beef sales increased by 606 million pounds by volume, or 
more than 11 percent. All fresh meat and poultry sales increased 19 
percent by value, an increase of $9.6 billion. Beef sales increased by 
$5.9 billion in value, accounting for 61 percent of that overall growth 
in protein demand. Ground beef sales alone grew by $2.02 billion, 
accounting for 21 percent of the total increased aggregate demand for 
meat and poultry.\1\
---------------------------------------------------------------------------
    \1\ Beef Checkoff, Hindsight 2020: Retail and Foodservice Trends 
Through the Pandemic (https://www.beefitswhatsfordinner.com/retail/
sales-data-shopper-insights/pandemic-market-trends), accessed November 
2021.
---------------------------------------------------------------------------
    Beef and pork demand remains high: the total volume of red meat 
retail sales January through September 2021, remained nearly four 
percent higher than the pre-pandemic levels over the same period in 
2019. This increase in demand in 2020 happened while the packing 
sector's ability to process livestock was experiencing operational 
constraints, and has continued into this year because labor 
availability has similarly affected the packing industry's ability to 
operate at full capacity.
Labor is Capacity.
    Production in meat packing and processing plants is labor-
intensive, and therefore tied to the number of employees working the 
line. Throughout 2021, even as the comprehensive COVID-19 protections 
instituted by the meat industry since the spring of 2020 successfully 
lowered transmission among meatpacking workers and held case rates 
lower than case rates in the general U.S. population, worker shortages 
have persisted. The Meat Institute regularly hears from member 
companies challenged with 20 percent absenteeism on any day, as 
Francois Leger of FPL Food testified iii before this 
Committee on October 7. Without a steady, reliable workforce, plants do 
not run efficiently and production declines. Labor is capacity.
---------------------------------------------------------------------------
    \iii\ https://docs.house.gov/meetings/AG/AG00/20211007/114110/HHRG-
117-AG00-Wstate-LegerF-20211007.pdf.
---------------------------------------------------------------------------
    To be clear, labor challenges were not caused by the pandemic; 
COVID-19 only exacerbated the issue. The meat industry has been facing 
a labor shortage for some time and it continues today. The pace of 
Saturday shifts has also strained available labor and adds to 
processing costs. Recent media reports underscore the industry's 
recruitment efforts, including wage increases, signing bonuses, 
relocation bonuses, retention bonuses, and generous benefits. Several 
major companies have publicly announced starting salaries at or above 
$20 per hour, and raising starting salaries means raising all other 
salaries up the chain. This labor shortage impact is not only on 
processing lines but also warehouse workers, skilled maintenance 
positions, and other jobs critical to maintaining the supply chain.
    Meat and poultry processors are the harvest stage of livestock and 
poultry production, as field work is for so many crops. Meat and 
poultry packers and processors must have access to an expanded, year-
round agricultural guestworker program. The current agricultural 
guestworker program fails to meet the needs of all of agriculture: it 
is seasonal and does not include the meat and poultry industry.
    When American consumers head to the grocery store, they expect to 
see the meat counter filled with animal protein options. America's 
farmers, ranchers, and processors produce the highest-quality animal 
protein in the world. However, bringing nutritious and affordable 
animal protein to consumers requires a strong, efficient supply chain--
and that supply chain is hindered by the lack of access to a skilled, 
reliable workforce for meat and poultry operations across the country.
Port Congestion is Putting Exports in Jeopardy.
    Over the past year, America's ports have experienced increasing 
pressure caused by myriad factors that have hampered U.S. agricultural 
trade with devastating consequences for farmers, ranchers, truckers, 
manufacturers, food industry workers, and rural communities. In 
addition to contending with excessive delays and congestion at many 
U.S. marine terminals, U.S. agricultural exporters, importers, 
truckers, and producers have experienced the near-constant predatory 
and unreasonable behavior of vessel-operating common carriers (called 
common carriers or ocean carriers from this point forward). This 
behavior has exacerbated existing delays and congestion concerns, and 
has gone largely unchecked, with no sign of abating.
    Perhaps the most egregious action perpetrated by ocean carriers is 
their proclivity to decline to carry U.S. agricultural commodity 
exports, including meat and poultry exports, instead hastening empty 
containers to Asian markets to fill them with more lucrative consumer 
goods to export to the U.S. In some instances, common carriers are 
collecting freight rates ranging as high as $12,000 to almost $20,000 
per container to carry U.S. agricultural exports. Because meat and 
poultry exports are perishable, with a relatively short shelf-life in 
the case of chilled meat products, the decision by ocean carriers to 
cancel export bookings or bypass carrying U.S. agricultural products 
altogether is particularly consequential. These exports cannot 
withstand extensive disruptions or delays, and should not be forced to 
do so if there is sufficient space available on a vessel. Yet, often 
ocean carriers are departing U.S. ports with vessels loaded at less 
than 50 percent capacity--a stark contrast to the near 100 percent 
capacity observed on vessels making the journey to the U.S. These 
cancellations and delays are costing U.S. meat and poultry companies 
millions, as they are forced to downgrade, discard, or divert product 
in the case of exports, and source from non-traditional suppliers at 
extremely high prices in the case of imports.
    Failure to hold the ocean carriers accountable could have long-
lasting, detrimental effects for the trade-dependent U.S. meat and 
poultry industry and agriculture sector. If ocean carrier practices 
persist, and are not subject to oversight, then the U.S. meat and 
poultry industry, its workers, and the communities it supports will 
struggle to access these vital markets cultivated over decades. This 
threat is concerning because Asia accounts for a significant portion of 
U.S. meat and poultry trade, with China, Japan, and Korea among the top 
markets for both beef and pork annually. The U.S. meat and poultry 
industry has earned the reputation of being a reliable supplier of 
safe, high-quality products to these export markets. But the European 
Union, Australia, and countries in South America are ready to fill the 
void left by the U.S.'s absence--an absence resulting directly from 
ocean carriers' nefarious actions. Once foreign competitors seize 
previously held U.S. market share, it becomes increasingly difficult, 
if not impossible, to recapture the same level of hard-earned access.
    The U.S. meat and poultry industry counts on these markets to send 
products that otherwise would not be consumed, or would be consumed in 
extremely low quantities, by Americans. As a result, the U.S. domestic 
market would not easily absorb these products, pressuring livestock 
producers, packers, and processors, and the communities they support. 
It would be cost prohibitive for many of these businesses to reengineer 
supply chains or to find alternative buyers to fulfill overseas 
contracts. Continued port disruptions could also undermine the U.S.'s 
food supply, which relies on imports to fill gaps in U.S. production. 
This would inevitably curtail consumer choice.
    Those costs are compounded by excessive and unreasonable detention 
and demurrage fees assessed on U.S. importers and exporters by ocean 
carriers and marine terminal operators for the failure of these 
importers and exporters to either retrieve a container from a marine 
terminal or return one within a specified amount of time. The Federal 
Maritime Commission (FMC) has found that ocean carriers and marine 
terminal operators regularly issue these costly penalties even if 
delays in retrieving or returning containers are beyond the control of 
the importer or exporter. Although the FMC has deemed such charges to 
be ``unreasonable,'' and in violation of the Shipping Act, ocean 
carriers and marine terminal operators have faced few consequences for 
imposing these exorbitant, punitive costs.
    As the U.S. continues to emerge from the economic hardship 
inflicted by the COVID-19 pandemic, our farmers, ranchers, agricultural 
producers, manufacturers, and food industry workers need functioning 
ports, and access to export markets and critical inputs they afford. 
The Meat Institute appreciates the attention this issue has garnered in 
Congress, including the strong bipartisan support for the Ocean 
Shipping Reform Act of 2021, which, if passed, would address many 
concerns described in this testimony, including granting the FMC 
explicit statutory authority to enforce its detention and demurrage 
rule to help stem future abusive ocean carrier practices. American 
importers and exporters would also benefit from efforts to shift the 
burden of proof to carriers and terminals to confirm detention and 
demurrage charges comply with FMC's rule. It is equally important to 
prevent ocean carriers from declining export cargo bookings if such 
cargo can be safely loaded on vessels in an appropriate timeframe; the 
fate of U.S. agriculture exports should not solely be determined by 
carriers.
    Addressing this crisis not only involves holding ocean carriers 
accountable for their actions, but it also requires improving port 
efficiencies. Recent announcements by the Ports of Los Angeles and Long 
Beach to extend hours of operations must be matched with an adequate 
supply of labor, including truck drivers, along with extended warehouse 
hours to improve cargo flows. Urgent action is especially critical to 
enhance current port capacity, including using nearby empty lots for 
container storage and unloading, along with inland loading points.
    Efforts to resolve equipment shortages, such as through a 
domestically-controlled supply of chassis, combined with investments in 
port data infrastructure, must complement improvements in capacity and 
operating hours to ensure the interconnected challenges that have 
contributed to, and exacerbated, this crisis are addressed 
comprehensively. The Meat Institute stands ready to work with Members 
of Congress to secure passage of the Ocean Shipping Reform Act of 2021 
and to identify other legislative means to provide much-needed relief 
to America's farmers, ranchers, agricultural producers, manufacturers 
and food industry workers.
Criteria for Line Speed Waivers Must be Issued.
    Last spring, a Federal judge blocked the U.S. Department of 
Agriculture's (USDA) New Swine Inspection System (NSIS) rule because of 
an Administrative Procedure Act technicality: the court found that in 
its final rule, USDA had failed to address comments the Department had 
received about worker safety. Then the Biden Administration decided not 
to appeal the case, and line speeds for swine plants that participated 
in NSIS have been slowed since July 1. Some of these plants have been 
running at elevated line speeds for upwards of 20 years and 
demonstrated their ability to do so safely while maintaining and 
continuously improving worker safety.
    In June--before the July 1 slowdown--the Meat Institute provided 
information to USDA regarding worker safety practices and draft 
criteria that could be included in a line speed waiver to address 
worker safety and inform future rule-making. Since then, although the 
Meat Institute has been told repeatedly the Department is close to 
finalizing criteria for line speed waivers, nothing has been issued. It 
is beyond past time for USDA to issue the criteria for line speed 
waivers: the NSIS plants--specially configured and staffed to operate 
under NSIS--have been operating at a competitive disadvantage since 
July 1, and hog slaughter capacity has been reduced. With hog plants 
already running below capacity because of lack of labor, the additional 
slowdown due to slower line speeds is a self-inflicted wound by the 
Administration.
COVID-19 Vaccine Requirement for Federal Employees and Contractors.
    The meat and poultry industry was among the first to urge the Biden 
Administration to prioritize vaccines for essential workers. The Meat 
Institute partnered with the United Food and Commercial Workers 
International Union (UFCW) iv to urge all 50 state governors 
to prioritize meat and poultry workers for the vaccine.
---------------------------------------------------------------------------
    \iv\ https://www.meatinstitute.org/ht/display/ReleaseDetails/i/
186143/pid/287.
---------------------------------------------------------------------------
    Meat Institute members provided significant support for vaccination 
efforts, holding onsite clinics for vaccination, providing paid leave 
for workers to obtain the vaccine, offering vaccine bonuses, holding 
vaccine lotteries with monetary prizes, providing information sessions, 
vaccinating family members of workers and other members of the 
community and much more: the industry supports vaccines.
    The Meat Institute is concerned, however, about the vaccine mandate 
for Federal employees and contractors. By statute, meat and poultry 
plants are subject to continuous Federal inspection, without which 
product may not be shipped in commerce. The Meat Institute is concerned 
that if significant numbers of Federal inspection personnel at USDA's 
Food Safety and Inspection Service decline to get vaccinated, it will 
compound the current inspector shortage and result in slowdowns at 
processing plants. Likewise, the Meat Institute has similar concerns 
about vaccine requirements creating labor shortages for Federal 
contractors, such as the rail lines and trucking industry. The Meat 
Institute urges the Federal Government to develop viable contingency 
plans should there be significant attrition of Federal inspectors due 
to this mandate.
Conclusion
    The North American Meat Institute is prepared to discuss these 
supply chain issues and work with the Committee to resolve them. Thank 
you for the opportunity to provide this testimony.
                              Statement 2
                  on behalf of national cotton council
Market & Supply Chain Disruptions Facing U.S. Cotton Merchandisers and 
        Other Cotton Industry Segments
    The NCC is the central organization of the United States cotton 
industry. Its members include producers, ginners, cottonseed processors 
and merchandizers, merchants, cooperatives, warehousers and textile 
manufacturers. A majority of the industry is concentrated in 17 cotton-
producing states stretching from California to Virginia. U.S. cotton 
producers cultivate between 10 and 14 million acres of cotton with 
production averaging 12 to 20 million 480 lb bales annually. The 
downstream manufacturers of cotton apparel and home furnishings are 
located in virtually every state. Farms and businesses directly 
involved in the production, distribution and processing of cotton 
employ more than 115,000 workers and produce direct business revenue of 
more than $22 billion. Annual cotton production is valued at more than 
$5.5 billion at the farm gate, the point at which the producer markets 
the crop. Accounting for the ripple effect of cotton through the 
broader economy, direct and indirect employment surpasses 265,000 
workers with economic activity of almost $75 billion. In addition to 
the cotton fiber, cottonseed products are used for livestock feed and 
cottonseed oil is used as an ingredient in food products as well as 
being a premium cooking oil.
Role of Cotton Merchandisers
    Cotton merchandisers provide benefits and services to all supply 
chain participants. Traditionally, growers desire to market their 
entire crop, consisting of a wide variety of qualities, at one time, at 
the highest price possible, receiving payment in full. Conversely, 
mills and manufacturers desire to purchase at the lowest possible 
price, as they consume throughout the year, in very specific quality 
specifications, paying as they go. Neither party traditionally manages 
the delivery logistics. The merchandisers' role is to harmonize the 
needs of the producers and consumers and assume their price risk and 
other risks. Merchandisers effectively bridge the gap between timing 
mismatches of supply and demand fundamentals in the global marketplace.
Summary of Market Disruptions
    Since March 2020, the cotton market has experienced unprecedented 
disruptions that have caused significant financial losses for cotton 
merchandisers. The COVID pandemic and subsequent surge in consumer 
demand has resulted in major supply chain disruptions.
    Between March and July 2020, COVID restrictions led to sharp 
declines in retail clothing sales and in cotton processed by mills 
around the world. The loss in demand caused U.S. cotton to be stored 
for a longer period than originally expected, leading to increased 
storage costs and carrying charges.
    As COVID restrictions relaxed and world economies began reopening, 
the supply chain experienced a level of stress unlike any previous 
time. In part, stress on the supply chain has been amplified because 
supply chain providers took significant capacity out of the system 
during the government-imposed shutdowns. This decreased supply chain 
capacity made handling an unexpected demand spike even more difficult 
and has resulted it a supply lag both for goods and supply chain 
capacity which has not been made up for yet.
    The impact on cotton is unique and more acute due to cotton's lack 
of fungibility relative to other commodities; cotton's dependence on 
export sales; containers as the sole method of cotton export shipments; 
and cotton's reliance on Los Angeles/Long Beach ports.
    There continue to be concerns over the practices of ocean carriers 
and terminals operators at U.S. ports. These include ignoring the 
Federal Maritime Commission's existing demurrage and detention 
guidelines, limiting container availability to carry agricultural 
export cargo, canceling or refusing export container bookings and a 
lack of timely notice of changes to U.S. shippers.
    Across California's three major ports, the shipment of empty 
containers jumped 56% from an average of 1.16 million TEUs (20 
equivalent units) in the first quarters of 2018-2020 to 1.81 million 
TEUs in the first quarter of 2021. Compared to the first quarter of 
2020 alone, the first quarter of 2021 represents an 80% increase in 
empty export container units.
    At the Port of Los Angeles, in 2021, through July, nearly 75% of 
all exported containers were empty. Accessibility to export containers 
has been further limited by record shipping costs and harmful 
surcharges.
    The issue of freight carriers electing to leave without refilling 
empty containers with American goods and products is limiting U.S. 
cotton's ability to satisfy strong export demand. Shipping containers 
filled with imported goods are normally unloaded, sent to rural areas, 
filled with agricultural commodities and then shipped abroad. However, 
the increased disparity in freight rates paid by the import cargo that 
has resulted this past year, combined with congestion and delay at 
ports on our West and East Coasts, are leading carriers to immediately 
return empty containers to their overseas ports of origin. Freight 
charges from Asia to the U.S. have been driven as high as $15,000 to 
$20,000 per container. By comparison, freight charges for an export 
container carrying agricultural products typically costs $400-$1,800.
    While there continues to be much focus on the problems at the West 
Coast ports, it is important to point at that U.S. South Atlantic 
ports, which are strategic cotton shipment ports and are noted for 
their efficiency and forward-looking strategic initiatives, have also 
faced unimaginable challenges due to the surges in volume and 
unmanageable schedule changes.
    Additionally, the lack of adequate labor is one the largest supply 
chain constraints limiting the efficient movement of U.S. cotton. 
According to recent estimates, the trucking industry needs more than 
80,000 additional drivers immediately to meet the current demand. Labor 
shortages are not just limited to the trucking industry as ocean 
carrier's abilities to provide services have been hindered 
significantly not only at terminals and on vessels but also in 
administration, communication, scheduling, and documentation since 
March of 2020 through today due to numerous factors affecting their 
labor forces.
Key Issues and Economic Impacts
    To highlight some of the most challenging shipping issues facing 
U.S. cotton merchandisers and the harmful and costly impacts resulting 
from these issues, the below table catalogs the key problems, with 
further details provided below.

------------------------------------------------------------------------
             Key Issues                         Major Impacts
------------------------------------------------------------------------
 Warehouse Date               Additional Storage Costs
 Inconsistency
 Driver Shortages             Increased Ocean Rates
 Chassis Shortages            Increased Truck Rates
 Limited Container            Late Warehouse Fees
 Availability
 Vessel Schedule              Missed Loads
 Variability
 Port/Rail Congestion         Driver Disincentive for
                                      Export Loads
 Transshipment Delays         Ocean Carrier Disincentive
                                      for Export Loads
 Increased Import Volumes     Operational Inefficiencies
 Delayed Documents            Reconcentration Costs
                                      (Truck and Warehouse)
 Inefficiencies Due to        Rolled Bookings
 Staff Shortage, Remote Work, Etc.
                                      Detention and Demurrage
                                      Charges at Port of Destination
                                      Customer Frustration with
                                      a Traditionally Reliable U.S.
                                      Supply Chain
                                      Concerns Meeting Export
                                      Commitments
------------------------------------------------------------------------


   Increased Carrying Costs from Erosion of Demand: Cotton 
        accrued more storage, interest, insurance, and other costs as 
        consumption halted due to COVID.

     At the height of the COVID shutdown, cotton had to be 
            stored for longer periods of time than originally 
            anticipated, in some cases as much as an additional 3 
            months.

     Even as markets have reopened, delays of 1 to 2 months 
            continue due to driver shortages, chassis shortages, port/
            rail congestion, and other operational inefficiencies.

   Comprehensive Increases in Supply Chain Costs: COVID based 
        spending trends have overwhelmed the intermodal supply chain 
        vastly increasing costs for:

     Trucking--The Bureau of Labor Statistics reports that 
            the PPI for General Freight Trucking in September 2021 is 
            23% higher than pre-pandemic levels.

     Ocean Freight--According to USDA data, outbound ocean 
            freight rates from Los Angeles to Shanghai have more than 
            doubled between March 2021 and September 2021, going from 
            $800 per 40 container to $1,710 per 40 container.

     Rail Service--Since May 2020, rail freight rates 
            increased by 28%.

     Intermodal Equipment Provisioning.

   Costs Associated with Broken Supply Chain Links: As the 
        intermodal supply chain has become overwhelmed with cargo, 
        acute points of congestion have created tremendous delays and 
        costs related to detention, demurrage, storage, rolled 
        bookings, canceled sailings and renegotiation of documents, 
        among others. The industry is experiencing on-going disruption 
        costs for changing vessel schedules and resulting early return 
        date and intermodal and port cutoff changes that directly 
        impact planned pickups shifting them days or weeks into the 
        future on top of other demand with no capacity to recover. The 
        costs include:

     Team resource costs.

     Elongation of trade-to-cash cycle.

     Split shipment to customer.

     Warehouse pickup rescheduling costs and late pickup 
            fees.

     Warehouse late pickup fee.

     Incremental trucking costs.

     Storage costs for loaded container.

     Per-diem costs for containers and chassis.

     Chassis per diem costs.

   Domino Effect: Trade frictions with China have delayed 
        shipments and added to the economic costs of the COVID 
        pandemic.

     Cotton merchandisers have continually provided 
            liquidity to producers and consumers of U.S. cotton without 
            compromise or default throughout these catastrophic events.

    In addition to the severe disruptions and related costs being 
experienced by cotton merchandisers since COVID struck, there are more 
recent supply chain disruptions impacting cotton producers and others 
through the entire cotton and textile production value chain.
    As noted by numerous agricultural organizations and companies, the 
following issues have been identified as some of the other problematic 
for the agricultural supply chain and are directly causing higher 
prices and/or shortages for the agriculture sector.

   Labor: Labor shortages exist on the farm, in processing 
        facilities, and among critical service providers. A National 
        Council of Farmer Cooperative survey found that 77% of 
        responding coops had issues retaining a skilled workforce 
        during the pandemic.

   Fertilizer: A confluence of factors negatively impacting 
        global fertilizer market supply chains include, (1) global 
        demand for fertilizer, which is largely driven by crop 
        plantings and prices; (2) recent weather events that disrupted 
        domestic production; (3) COVID-19-related deferral of facility 
        maintenance that is now being undertaken; (4) trade actions; 
        (5) transportation costs; and (6) the supply and cost of 
        natural gas.

   Chemical Inputs and Seed: Regulatory action by EPA is 
        limiting the availability of pesticides necessary for 
        agricultural production. Transportation issues are creating 
        issues in product delivery, and Hurricane Ida has disrupted a 
        critical region for herbicide production.

   Energy: Energy during the early stages of the pandemic was 
        primarily consumed at home. That abrupt change suddenly 
        reversed, and fuel prices have soared in the past year. Not 
        only does energy affect fuel costs, but also it is an input for 
        chemical, fertilizer and seed production.

   Equipment and Parts: Steel prices rose dramatically during 
        the pandemic due to both demand and tariffs levied on multiple 
        steel products in August 2021. And, a lack of microchips 
        stemming from COVID-era demand for laptops and other home 
        electronics has forced many farm equipment manufacturers to 
        halt production, creating delays in shipping new equipment that 
        sometimes last a year or more. In addition, parts needed to 
        repair equipment may not be available.

    Thank you for the opportunity to catalog the numerous supply chain 
disruptions and costs that are negatively impacting the U.S. cotton 
supply chain and the real concern about additional costs and supply 
shortage for key production inputs moving into the 2022 growing season. 
The National Cotton Council appreciates the leadership of this 
Committee and your colleagues in Congress to take actions to help 
address these issues and urging the Administration to take all actions 
possible to provide both immediate relief and remedy structural issues 
for the long-term. We are particularly concerned about the stress the 
current situation is placing on our merchandising segments. We would be 
pleased to provide any additional information and data that will be 
helpful and to respond to any questions.
                              Statement 3
                 on behalf of the fertilizer institute
    Thank you for holding today's hearing on ``The Immediate Challenges 
to our Nation's Food Supply Chain.'' The Fertilizer Institute (``TFI'') 
appreciates the opportunity to share information regarding supply chain 
challenges that are impacting TFI's members and fertilizer markets.
    TFI represents companies that are engaged in all aspects of the 
fertilizer supply chain in the United States. Fertilizer is any 
combination of specific nutrients designed to provide the nourishment 
essential for growth and maintenance of crops. Three primary 
macronutrients--nitrogen (N), phosphorus (P2O5) 
and potassium (K)--are the major building blocks of most fertilizers 
and comprise the bulk of all fertilizer produced. The fertilizer 
industry ensures that farmers receive the nutrients they need to enrich 
the soil and, in turn, grow the crops that feed our nation and the 
world. Fertilizer is a key ingredient in feeding a growing global 
population, which is expected to surpass 9.5 billion people by 2050. 
Half of all food grown around the world today is made possible through 
the use of fertilizer,\1\ hence its importance to farmers and food 
production.
---------------------------------------------------------------------------
    \1\ Stewart, W.M., Dibb, D.W., Johnston, A.E. and Smyth, T.J. 
(2005), The Contribution of Commercial Fertilizer Nutrients to Food 
Production. Agron. J., 97: 1-6. https://doi.org/10.2134/
agronj2005.0001.
---------------------------------------------------------------------------
    A variety of factors impact fertilizer markets, and most recently, 
are negatively impacting supply and raising costs. Many in the 
agricultural sector have experienced some challenges related to crop 
inputs. Fertilizer is an essential input for the economic viability of 
U.S. farmers and for feeding a growing global population. Challenges 
impacting the fertilizer industry can also impact farmers.
Overview
    Fertilizers are resourced based materials and produced primarily in 
countries where these limited resources exist. While the number of 
countries that produce fertilizers are more restricted due to the 
availability of these resources, the demand for fertilizer is truly 
global in nature and fertilizers are used by farmers in nearly every 
country in the world. In addition, fertilizer demand, driven by crop 
production, is seasonal with the window available to apply these 
materials limited by crop planting seasons as well as weather. 
Consequently, fertilizers are truly global commodities as these 
materials are transported from the limited number of countries which 
produce them to the global market which requires them. In fact, nearly 
44% of all fertilizers produced globally, or more than 200 million tons 
of material, are exported annually. Moving this material from 
production facilities to farms requires virtually every mode of 
transportation and a carefully orchestrated system of logistics to 
serve farmers on a just-in-time basis.
    Fertilizer markets and related supply chain challenges must be 
considered within a global context. A variety of global and domestic 
factors can impact the supply of fertilizer and fertilizer markets and 
prices.
Domestic Production and Imports
    Unlike microchips or other critical components, the U.S. has 
substantial domestic nitrogen and phosphate fertilizer production. From 
the standpoint of our nation's supply chain and food security, this is 
good news. In 2020, the U.S. was the world's third largest producer of 
nitrogen-based fertilizers and the second largest producer of phosphate 
fertilizer. While we are a large producer, we also import. In 2020, 27% 
of our nitrogen supply and 16% of phosphate supply was imported. In 
contrast, the U.S. imports most of its potash supply, with 86% coming 
from Canada in 2020.
    Domestic production of fertilizers is at 5 year historical norms 
while total planted acreage of corn, soybeans, wheat, and cotton are 
down 0.3% from recent 2017 highs. However, relative to the last 2 
years, domestic production is slightly below historical norms due, in 
part, to weather events.
    About 60% of domestic ammonia production capacity is located near 
large natural gas reserves in Louisiana, Oklahoma, and Texas.\2\ The 
February winter ice storms and Hurricane Ida disrupted production in 
this critical production region. The winter storms in February of this 
year resulted in missed production of approximately 250,000 short tons 
of nitrogen fertilizers.\3\ This comprises 3.3% of the total domestic 
nitrogen production between January and June.
---------------------------------------------------------------------------
    \2\ U.S. Geological Survey, Mineral Commodity Summaries, January 
2021; https://pubs.usgs.gov/periodicals/mcs2021/mcs2021-nitrogen.pdf.
    Editor's note: references annotated with  are retained in 
Committee file.
    \3\ Calculated based on 2019 and 2020 average February production 
levels. Between 2016 and 2019 ammonia production facilities operated at 
an average of 90% of capacity, there is limited ability for 
manufacturers to ``make-up'' for lost production.
---------------------------------------------------------------------------
    Perhaps the pandemic's biggest impact on domestic fertilizer 
production is the deferral of necessary maintenance that is now being 
undertaken throughout 2021 and likely into 2022. Fertilizer production 
facilities are multi-billion-dollar facilities that must undergo 
periodic ``turnarounds'' that result in production shutdowns for about 
2-6 weeks. Turnarounds were deferred to reduce potential exposure to 
COVID from additional personal onsite in the middle of the global 
pandemic. This has an impact on fertilizer supply as more production 
facilities are currently undergoing maintenance than would otherwise be 
the case. Moreover, this further erodes the ability of domestic 
manufacturers to recover from February's lost production.
International/Governmental Supply Disruptions
    Disruptions across the global supply chain can have an impact on 
fertilizer production and supply, and this can further impact America's 
farmers in terms of fertilizer prices and availability. For example, 
Belarus has historically comprised 21% of the global exports of potash. 
In August 2021, the U.S. Government, and other countries sanctioned 
Belarus. Although the sanctions did not directly include the country's 
solo potash exporter, potential legal liability may limit the purchase 
of its potash. The U.S. only imported about 5% of our annual potash 
supply from Belarus in each of the last 3 years. TFI does not have a 
position on the sanctions themselves, but the sanctions are an example 
of how the global nature of fertilizer supply can impact the supply-
demand balance and, consequently, fertilizer prices. The sanctions 
against Belarus are negatively affecting potash markets and supply.
    Another example of governmental actions that impact the market is a 
ban imposed by China on exports of phosphate fertilizer. In 2020, China 
accounted for approximately 25% of global phosphate fertilizer exports. 
The ban on phosphate fertilizer exports by China at the end of 
September has negatively impacted global supply by reducing the 
quantity of phosphates available for import. On October 15, China also 
instituted tighter export controls on other fertilizer materials 
including urea. Urea accounts for 49% of global nitrogen use and China 
accounted for 10% of global urea exports in 2020 so these additional 
restrictions on Chinese exports have further tightened the global 
nitrogen market.
Natural Gas
    Natural gas prices are a key input cost for fertilizer production. 
Depending on its cost, natural gas accounts for approximately 70-90 
percent of the production cost for ammonia, with 40% used as fuel and 
60% as the feedstock. Ammonia is directly applied as a fertilizer and 
is also the building block for all other nitrogen fertilizers. It is 
also required for the manufacture of ammonium phosphates, the most 
widely used phosphate fertilizer materials which also contain nitrogen. 
While the U.S. has enjoyed low natural gas prices in recent years, in 
the past 6 months, domestic natural gas prices have increased by 224 
percent.\4\ The steep increases in natural gas prices substantially 
raises production costs for domestic fertilizer producers.
---------------------------------------------------------------------------
    \4\ Energy Intelligence; Natural Gas Weekly; https://
www.energyintel.com/. Wellhead prices have more than doubled from $2.52 
to $5.45 from April 2021 to October 18, 2021.
---------------------------------------------------------------------------
    In Europe, record natural gas prices--which are currently four 
times more expensive than in the United States--combined with other 
pressures are forcing the continent's ammonia producers to reduce 
output or idle plants which will lead to lower availability and higher 
prices of fertilizers for farmers. The European Union comprises 
approximately 9% of global nitrogen production, and these shutdowns are 
impacting the global supply of fertilizer.
    Rising domestic prices of natural gas are a chief concern as it 
relates to domestic production of fertilizers. As experienced in 
Europe, domestic facility closures would disrupt global markets and 
negatively impact U.S. farmers.
Transportation
    Fertilizer moves by rail, truck, barge, pipeline, and ocean vessels 
and America's farmers and their suppliers rely on a safe and efficient 
transportation network for their success.
    Trucking capacity and the infrastructure of rural communities, 
including broadband and roadways, must be addressed. All fertilizer 
utilized in the United States touches a truck at least once, and the 
timeliness of deliveries is crucial to farmers. Trucking capacity, 
which impacts everyone in the agricultural sector, can be improved 
through investment, regulatory reform, and efficiency gains. For 
example, the current Gross Vehicle Weight (GVW) limit for Federal 
Interstate Highways of 80,000 lbs. on five axles is woefully outdated. 
Congress should authorize a voluntary program to allow up to ten states 
to opt-in to allow 91,000 lb., six-axle, bridge formula compliant 
trucks on Federal Interstate Highways within their borders. At 91,000 
pounds, freight efficiency increases by 22 percent along with a 
commensurate reduction in the carbon footprint per pound. Modernizing 
weight restrictions for six-axle trucks would make U.S. farmers and 
businesses more competitive and reduce the number of trucks needed to 
haul the same amount of goods, reducing infrastructure wear-and-tear, 
enhancing capacity, and benefiting the environment by reducing vehicle 
miles traveled.
    Both Congress and industry also need to find ways to broaden the 
pool of available drivers. To this end, the Senate-passed bipartisan 
Infrastructure Investment and Jobs Act, which should be enacted as soon 
as possible, includes an important pilot program for up to 3,000 
interstate professional drivers ages 18-20.
    The following examples regarding the rail marketplace uniquely 
impact the fertilizer industry.
    On a ton-mile basis, more than half of all fertilizer moves by 
rail. U.S. Government data indicates that fertilizer relies more on 
rail transportation than other agricultural commodities.\5\ As such, 
rail network disruptions can be a serious challenge. Rail carrier 
implementation of large cost-cutting initiatives, such as precision 
scheduled railroading (``PSR''), have disrupted rail service to many 
shippers. PSR has made it more difficult and expensive to ship 
fertilizer. Regarding rail rates, over the past 20 years, rail rates to 
ship anhydrous ammonia--the building block of all nitrogen fertilizers 
and one of the most efficient sources of nitrogen for farmers--
increased 206%, which is more than triple the average increase for all 
commodities combined.
---------------------------------------------------------------------------
    \5\ The Importance of Highways to U.S. Agriculture; https://
www.ams.usda.gov/sites/default/files/media/Main_Highway_Report.pdf. 
U.S. Department of Agriculture; December 2020; page 13.
---------------------------------------------------------------------------
    Another element of fertilizer transportation costs is the Tank Car 
Committee. The Department of Transportation has delegated authority to 
the rail industry via the Association of American Railroads (``AAR'') 
Tank Car Committee (``TCC''). For many years, shippers have been trying 
to work with AAR and DOT to reform the processes of the TCC. 
Historically, TCC has imposed measures on shippers that raise serious 
concerns about the extent of TCC authority. While this is a complicated 
issue, to date, DOT has not responded to a shipper-industry petition 
filed in 2016 on this matter.\6\ In recent years, regulatory actions 
imposed or initiated by the TCC--without a cost-benefit analysis--have 
raised shipping costs for fertilizer by millions of dollars.
---------------------------------------------------------------------------
    \6\ Petition No. P-1678; Docket No. PHMSA 2016-0093.
    Editor's note: the entire docket of the petition (totaling nine 
documents) is retained in Committee file.
---------------------------------------------------------------------------
Conclusion
    In summary, fertilizer is critical for food production and is truly 
a global commodity. Our nation is blessed by a strong domestic 
production industry. A confluence of factors impact global fertilizer 
market supply chains. Current factors that have most influenced the 
current market supply of fertilizer include (1) global demand for 
fertilizer, which is largely driven by crop plantings and prices; (2) 
recent weather events that disrupted domestic production; (3) COVID-19 
related deferral of facility maintenance that is now being undertaken; 
(4) international actions, including Belarus and China; (5) 
transportation costs; and (6) the supply and cost of natural gas.
    Thank you again for holding today's hearing and for the opportunity 
to submit this statement. TFI looks forward to working with Congress to 
address the challenges facing our nation's food supply chain.
                                 ______
                                 
Submitted Op-Ed by Hon. Cynthia Axne, a Representative in Congress from 
                                  Iowa
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.agri-pulse.com/articles/16649-opinion-the-soy-oil-crisis-
that-never-heated-up]
Opinion: The ``soy oil crisis'' that never heated up
10/18/21 11:30 a.m.

By Stephen Censky *
---------------------------------------------------------------------------
    * https://www.agri-pulse.com/authors/404-stephen-censky.

    If you listen to certain groups in the food industry right now, you 
may have heard claims that there are potential shortages or even 
rationing of edible vegetable oil. Some go as far as using this 
unfortunate fearmongering to suggest that Renewable Fuel Standard 
volumes for bio-mass based diesel (made from used cooking oil, 
vegetable oils, and animal fats) should be rolled back.
    Is there indeed a soybean oil supply crisis?
    Very simply, no. The data does not support the alarm.
    Harvest is currently underway for more than 86 million soybean 
acres, with U.S. farmers projected to produce a record soybean crop of 
over 4.4 billion bushels this year. From that record soybean crop will 
come a record amount of soybean oil available to meet both food and 
fuel needs. Growers are efficiently producing more per acre and meeting 
current demands. And, if the market signals for more soy next year, soy 
farmers are more than capable of responding.
    Not only are America's farmers growing more soybeans using less 
land and energy per bushel, but also the soybean industry is gearing up 
to process more soybeans, thus ensuring adequate soybean oil is 
available for market needs. At least seven new oilseed processing 
plants are under development, and soybean oil production by our 
domestic processing industry is projected by USDA to reach a record 
level this year--on top of a 26% growth in supply over the last 10 
years. In short, the markets are responding to the new demands.
    Increased soybean crushing here in the United States has a 
beneficial side effect for U.S. consumers as well: An even greater 
supply of this less expensive protein is available for food production. 
When a soybean is crushed, about 4 pounds of soybean meal are produced 
for every pound of soybean oil, and that meal is an excellent source of 
protein for the animal food industry. As a result, ongoing industry 
expansion to meet soybean oil needs will reduce feed costs and, 
subsequently, lower meat prices for consumers if other factors remain 
equal.
    The unfortunate fact is that prices have increased not only for 
soybean oil right now, but likewise for many products. Farmer input 
costs have rapidly increased. For example, fertilizer prices have 
approximately doubled this past year. Other parts of the supply chain 
downstream from the farm are also experiencing higher costs, with the 
producer price index for general freight trucking increasing by more 
than 20% in slightly over a year and barge freight costs on the 
Mississippi River about six times higher than just a few months ago.
    Attempting to pin the inflationary pressures impacting the food and 
agriculture sector across all cost categories solely on renewable fuels 
expansion is illogical. Doing so would only stifle our ability to 
reduce carbon emissions, could potentially increase protein prices for 
livestock producers, and would keep the market from adopting soybean 
processing expansion that would allow it to meet growing demand. This 
would hurt farmers' ability to withstand the higher costs they, along 
with much of the world, are facing.
    Rather than create concern over edible soybean oil supplies, we 
encourage our food industry peers to recognize that America's soybean 
growers are meeting current demands at the same time the soy industry 
prepares to meet even greater future demand for our versatile 
commodity--be that for food, feed, fuel or soy's many other diverse 
uses.
    There are numerous real challenges, both ongoing and developing, in 
food and agriculture. We are thankful soybean oil supply is not one of 
them and that every bit of each bean--whether meal or oil--can be used 
for America's vital, evolving agricultural markets.

          Stephen Censky is CEO of the American Soybean Association.
          For more opinions and ag news, go to: www.agri-pulse.com.
                                 ______
                                 
 Submitted Letter by Hon. Jimmy Panetta, a Representative in Congress 
   from California; on Behalf of British Columbia Produce Marketing 
                          Association, Et Al.
Joint Statement from North America's fresh produce industry on supply 
        chain disruptions
    On behalf of North America's fresh produce industry, we are calling 
for urgent government action to address significant ongoing supply 
chain disruptions with impacts to our food systems, economies, and 
ultimately individuals and families across the continent and around the 
globe.
    The COVID-19 global pandemic has created unprecedented public 
health, economic, and logistical challenges for communities and supply 
chains around the world. The fresh fruit and vegetable industry has 
been no exception. From the seed to the dinner plate, our sector has 
continued to work daily to find solutions to mitigate the impact of the 
outbreak and ensure consumers continue to have access to our safe, 
healthy and nutritious products.
    Almost 2 years since the start of the pandemic, substantial 
increases in costs and delays along the supply chain threaten our food 
security and the long-term economic viability of the North American 
fresh produce sector. It is important to note that these costs cannot 
be fully borne by the industry and will ultimately be passed to 
consumers. Sadly, these increases, which are already being felt by the 
end consumer are likely to escalate, affecting most those who can least 
afford it.

    Examples of ongoing supply chain disruptions include:

   Crippling port congestion--Gridlock at all major North 
        American ports has resulted in lines of ships waiting to dock 
        and containers stacked high waiting for unloading and pick-up. 
        For our highly perishable products, long delays at port can 
        result in loss of product, sales and ultimately food waste. 
        Significant delays in receiving equipment, building materials 
        and other inputs also serve to threaten upcoming growing 
        seasons.

     According to Goldman Sachs, more than 30 million tons 
            of cargo are waiting for delivery.

     Even once a vessel berths, it can take days to 
            discharge the containers.

     Soaring demurrage and detention fees resulting from 
            port delays cannot be sustainably absorbed by the industry.

     Long wait times for drivers picking up containers 
            result in further congestion and delays in delivery.

     For Canada and parts of the United States, it is 
            important to note that much of our 2021 growing season has 
            ended and the busier import season is set to begin.

   Delays and exploding costs in container shipping--While 
        major international shipping companies have been sending empty 
        containers back to Asia and posting record profits, weeks-long 
        shipping delays have resulted in major losses of product and 
        sales for the North American industry. Coupled with 
        exponentially growing container costs and a limited number of 
        refrigerated containers, this situation creates serious 
        challenges for the fresh produce industry and our countries' 
        food security. Governments must work together to provide 
        greater oversight of international ocean carriers and ensure 
        fair and ethical practices to support the continued flow of 
        goods.

     The cost of shipping containers has tripled or more in 
            the past year, with estimates increasing from $3000 per 
            container to $15,000 to $18,000, and even as high as 
            $25,000 per container.

     Due to the highly perishable nature of our 
            commodities, there are already a limited number of carrier 
            companies that accept fresh produce shipments. One of the 
            largest of these has recently announced it will no longer 
            carry fresh produce due to the increase in claims being 
            made.

     Despite the significant delays in product delivery, 
            shipping companies are holding container rates for shorter 
            periods of time. These companies have also begun cancelling 
            bookings, only to reschedule them at a higher rate.

   Cascading effects of inconsistent product delivery--When a 
        significant delay in receiving perishable product is followed 
        by receiving a large amount at once, a string of new issues and 
        costs arise, including arranging distribution and sourcing 
        additional labour required to re-grade and re-package 
        salvageable product to recover sales and avoid waste. Barriers 
        to exports resulting in more domestic product remaining in 
        North America also have the potential to create new supply and 
        demand challenges, including decreased profitability to all 
        domestic supply chain partners.

     Many aspects of our supply chain are designed to 
            penalize late or lengthy deliveries. For example, 
            distribution centres charge fees for missed appointments or 
            changes, carriers charge fees for detention and demurrage, 
            and upstream distributors charge fees for partial or 
            unfilled orders. This further inundates the supply chain 
            with additional costs.

     These ongoing disruptions have brought about 
            unprecedented issues over extended periods of time, 
            unforeseen challenges that many contracts simply did not 
            account for. This has resulted in an increasing number of 
            legal proceedings over contract disputes, placing further 
            stress on the supply chain.

   Continuing labour shortages across the supply chain--The 
        significant labour shortages in the fresh produce industry have 
        extended from the farm throughout the supply chain, and are 
        impacting everything from planting and harvest, to packing, 
        transportation and retail/foodservice. Governments have a key 
        role to play in incentivizing workforce re-engagement and 
        facilitating access to both domestic and international labour.

     The challenges agricultural employers are facing in 
            attracting workers is exacerbated by procedural delays and 
            COVID-19-related protocols.

     The National Council of Agricultural Employers 
            recently cited a report that in Q2 of 2020 more than 
            100,000 job openings were posted in the U.S. agriculture 
            sector which called for workers with no or limited 
            experience; even so, Department of Labor records show that 
            only 313 of these openings were filled by domestic workers.

     The American Trucking Association has estimated that 
            the U.S. alone has a shortage of around 80,000 truck 
            drivers, and the driver shortage tops the American 
            Transportation Research Institute's list of Top Industry 
            Issues. The scarcity of commercial truck drivers is made 
            worse in the produce industry, as drivers may opt to take 
            on less urgent, non-refrigerated loads rather than the 
            urgent, time-sensitive and highly temperature-controlled 
            loads necessary in fresh produce.

   Growing input shortages--From fertilizer, crop protection 
        products and greenhouse building materials, to pallets, 
        cardboard and packaging, the fresh produce supply chain is 
        experiencing increasing shortages and rising costs in inputs 
        that are critical to our sector, with impacts being felt now 
        and threatened for the future.

     In spring 2021, lumber shortages drove wood prices up 
            nearly 350%, resulting in a pallet shortage that lasted for 
            nearly 6 months. This shortage had significant impacts on 
            our sector, as fresh produce cannot move without pallets, 
            and fresh produce's status as a low margin item, our 
            industry was the last to receive new pallets from suppliers 
            when they finally became available.

     In summer 2021, prices for paper `pulp', the raw 
            material used to make boxes, were reported as being as much 
            as 40% higher, year-over-year, which has resulted in a 
            massive increase in the price of cartons--the primary 
            shipping container for fresh produce.

     Fertilizer costs have risen by more than 20% over the 
            past year, with China's recent announcement of restricted 
            energy consumption in key phosphate production regions 
            leading to anticipated shortages headed into the 2022 
            growing seasons.

     The Canadian greenhouse sector has reported delays of 
            more than 8 months in receiving critical building 
            materials, posing a major barrier to preparations for the 
            next growing season.

   Stockpiling of product by consumers--While the issues 
        outlined above pose significant concerns, it is vitally 
        important that they are not further exacerbated by consumer 
        panic buying or stockpiling of goods. Every effort must be made 
        to address supply chain disruptions while also clearly 
        communicating this to the broader public.

    In the early days of the pandemic, our governments took swift 
action to invest in food systems and to work together to keep supply 
chains moving. The situation we now face echoes some of the challenges 
we saw in the spring of 2020, with the added complications of heavier 
border traffic, consumer purchasing habits that have been significantly 
increased over the course of the pandemic, and government support 
programs that are winding down or have ended.
    We cannot emphasize strongly enough the need for our governments to 
work together to address these issues in a multi-lateral and holistic 
manner. The examples outlined above demonstrate clearly the complexity, 
interconnectedness and dependencies of our supply chain and the 
challenges we face. It is imperative that governments work urgently 
with all parts of the supply chain to mitigate the serious threats of 
food insecurity and food shortages. These multi-faceted problems will 
not be resolved overnight and delays in course correction are likely to 
compound and further complicate the situation.
    Simply put, without multilateral engagement to find solutions, 
these issues will create long lasting impacts to the detriment of all 
North American economies. These include: bankruptcies, legal disputes, 
industry consolidation, inflation, inaccessible food supplies, and many 
more. Time is against us, and the necessity of addressing these 
challenges now cannot be understated.

    Our organizations stand ready to work with governments and partners 
throughout the supply chain to ensure a path forward that enables the 
continued flow of our essential goods.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
 
 
[British Columbia  [California        [Canadian         [Canadian
 Produce            Strawberry         Horticultural     Produce
 Marketing          Commission]        Council]          Marketing
 Association]                                            Association]
 

                                                         
                                                         

 
 
 
[Fruit and         [Florida Fruit &   [Florida Tomato   [Fresh Produce
 Vegetable          Vegetable          Committee]        Association of
 Dispute            Association]                         the Americas]
 Resolution
 Corporation]
 

                                                         
                                                         

 
 
 
[Northwest         [Ontario Fruit &   [Ontario          [Ontario Produce
 Horticultural      Vegetable          Greenhouse        Marketing
 Council]           Growers'           Vegetable         Association]
                    Association]       Growers]
 

                                                         
                                                         

 
 
 
[Great American    [Association des   [Association      [Texas
 Media Services     producteurs        Quebecoise de     International
 and Produce        maraiichers du     la distribution   Produce
 Processing]        Quebec]            de fruits et      Association]
                                       legumes]
 

                                                         
                                                         

 
 
 
[Toronto           [United Fresh      [Western
 Wholesale          Produce            Growers]
 Produce            Association]
 Association]
 

                                 ______
                                 
Submitted Article by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.thederrick.com/free/cranberry-schools-thinking-outside-
the-box-to-keep-students-fed/article_6f9c11fc-3eff-11ec-92a0-
4bae287f7f79.html]
Cranberry schools `thinking outside the box' to keep students fed
By Laura O'Neil, Staff writer *
---------------------------------------------------------------------------
    * https://www.thederrick.com/users/profile/lauraoneil.

Nov. 2, 2021
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Cranberry Area High School students Preston Forrest, front, 
        and Aidan O'Brian visit the cafeteria for lunch on Monday. They 
        were served by Connie Schwabenbauer, left, and Carolyn Parkes, 
        right In the background, Kim Daugherty puts a tray of food in 
        the oven.
          Photos by Laura O'Neil.
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Connie Schwabenbauer serves Cranberry Area High School 
        students. from left. Kenny Lavrich, Avery Keenan and Coin Zerbe 
        their lunches on Monday.
          Photos by Laura O'Neil.
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Carolyn Parkes serves chicken dinner to Cranberry Area High 
        School students Colin Zerbe, left, and Braden Rekiel, right.
          Photos by Laura O'Neil.

          ``We've been improvising . . . We made our own muffins one 
        morning. We are really thinking outside the box.''
                                                          Kim Daugherty

    As labor, transportation and food shortages spread across the 
country, local schools are adjusting to keep their students fed.
    ``We have scaled back considerably from what we used to do,'' said 
Kim Daugherty, food services director for the Cranberry Area School 
District. ``If you go back before COVID, we had seven or eight homemade 
condiments.''
    ``We have just cut back on a lot of our offerings . . . Instead of 
having seven main entrees, we have cut it to three.''
    Even though there are fewer options in the cafeteria line, 
Daugherty said people shouldn't worry. The kids are still getting fed.
    ``This year all the students are eating for free, so our 
participation is really high,'' she said. Between the high school and 
elementary schools, the school district is providing more than 800 
lunches and about 500 breakfasts.
    The district purchases its food from various suppliers, including 
US Foods, which is a national supplier, and Schneider's Dairy. The U.S. 
Department of Agriculture provides the district with cheese, ground 
meat, fruit and vegetables.
    In October, US Foods limited how many cases a buyer can purchase at 
once. Now, instead of ordering 100 cases a week, Cranberry schools can 
only order 50 cases.
    Limiting the size of orders has enabled US Foods to replenish its 
inventory, but it has also forced buyers to look for other options.
    ``We go through 11 cases of cereal a week and ten cases of mini 
muffins. That's 20 cases right there that we are just using at 
breakfast time,'' Daugherty said.
    To compensate, the cafeteria has been serving more foods from local 
suppliers, such as Schneider's Dairy. Daugherty said she has purchased 
things like salt and sugar from local stores.
    ``We've been improvising . . . We made our own muffins one morning. 
We are really thinking outside the box.''
    The cafeteria is also facing a shortage of disposable products like 
straws, plastic wrap and aluminum foil. Daugherty has had to buy these 
items from places like Walmart and Sam's Club.
    Last year, during the height of the COVID-19 pandemic, the 
cafeteria switched to using paper plates and disposable silverware. At 
the beginning of this year, it switched back to regular plates and 
silverware.
    On Monday, Cranberry Area High School students lined up to receive 
helpings of chicken dinner. One student remarked, ``Chicken dinner! 
That looks rad.'' Another was disappointed that there weren't any 
muffins.
    Overall, Daugherty said, the high school students have been 
understanding about the adjustments in the cafeteria. ``The kids are 
fantastic. They are just very gracious.''
    The district's cafeteria staff, Daugherty said, has been able to 
``rise to the occasion, whatever it is, and they all work together. We 
couldn't do what we do without them.''
    ``Everything just has to come together, and you have to be ready to 
feed 800 people around 11 o'clock.''

          Laura O'Neil, reporter for The Derrick and The News-Herald, 
        can be reached at [email protected] or (814) 677-
        8357.
                                 ______
                                 
 Submitted Letter by Hon. Dusty Johnson, a Representative in Congress 
                           from South Dakota
November 4, 2021

  Hon. Pete Buttigieg,
  Secretary,
  U.S. Department of Transportation,
  Washington, D.C.

    Dear Secretary Buttigieg,

    Amid the growing supply chain crisis, drivers in the trucking 
industry have stepped up to ensure the timely delivery of goods. Yet 
even with their efforts, there simply aren't enough truckers on the 
road to meet the demand.\1\ Given this, we urge the Department of 
Transportation (DOT) to proceed with the Federal Motor Carrier Safety 
Administration's (FMCSA) Under-21 Commercial Driver Pilot Program.
---------------------------------------------------------------------------
    \1\ Wanted: 80,000 truck drivers to help fix the supply chain. 
https://www.cnn.com/2021/10/19/economy/trucking-short-drivers/
index.html.
---------------------------------------------------------------------------
    Currently, only commercial driver's license (CDL) holders over the 
age of 21 can operate commercial motor vehicles (CMVs) in interstate 
commerce. However, 49 states and the District of Columbia already allow 
18 to 20 year old CDL holders to operate CMVs in intrastate commerce. 
Accordingly, Congress supported, and the Trump Administration began, 
the process to implement the FMCSA's Under-21 Commercial Driver Pilot 
Program to allow drivers aged 18, 19, and 20 to operate CMVs in 
interstate commerce. This new pilot program would create a road map to 
drastically increase the number of truck drivers and alleviate the 
current crisis. Yet, the DOT has not taken action to move this program 
forward.\2\
---------------------------------------------------------------------------
    \2\ FMCSA Proposes New Under-21 Commercial Driver Pilot Program. 
https://www.fmcsa.dot.gov/newsroom/fmcsa-proposes-new-under-21-
commercial-driver-pilot-program.
---------------------------------------------------------------------------
    As our supply chain issues continue to grow, we should be doing 
everything we can to fix the problem. Therefore, we urge implementation 
of FMCSA's Under-21 Commercial Driver Pilot Program. It's critical that 
we pursue all avenues to alleviate the supply chain crisis and get 
goods moving again.
    Thank you for your attention to this letter. We look forward to 
your prompt response.
            Sincerely,
            
            

 
 
 
Hon. Dusty Johnson,                  Hon. Josh Harder,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. David G. Valadao,               Hon. Abigail Davis Spanberger,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Bill Johnson,                   Hon. Sanford D. Bishop, Jr.,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Troy Balderson,                 Hon. Jim Cooper,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Jackie Walorski,                Hon. Jim Costa,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Bob Gibbs,                      Hon. Jimmy Panetta,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Don Bacon,                      Hon. Cynthia Axne,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Madison Cawthorn,               Hon. Dan Newhouse,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. David B. McKinley,              Hon. Randy K. Weber, Sr.,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Eric A. ``Rick'' Crawford,      Hon. Brian J. Mast,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Mo Brooks,                      Hon. Bill Posey,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Ashley Hinson,                  Hon. Stephanie I. Bice,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Lauren Boebert,                 Hon. James R. Baird,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Louie Gohmert,                  Hon. Robert J. Witmann,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Ann Wagner,                     Hon. Ronny Jackson,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Fred Keller,                    Hon. Carol D. Miller,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Kelly Armstrong,                Hon. Jake LaTurner,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. William R. Timmons IV,          Hon. Mike Bost,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. John H. Rutherford,             Hon. John R. Moolenaar,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Larry Bucshon,                  Hon. Claudia Tenney,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Russ Fulcher,                   Hon. Rick W. Allen,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. H. Morgan Griffith,             Hon. Mariannette Miller-Meeks,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Adrian Smith,                   Hon. Mike Gallagher,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Greg Pence,                     Hon. Michelle Fischbach,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Robert E. Latta,                Hon. Tracey Mann,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. David Rouzer,                   Hon. Van Taylor,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Barry Loudermilk,               Hon. Paul A. Gosar,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Ben Cline,                      Hon. Peter Meijer,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Andy Harris,                    Hon. Glenn Thompson,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Ron Estes,                      Hon. Randy Feenstra,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Scott Perry,                    Hon. Brad R. Wenstrup,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Darin LaHood,                   Hon. Markwayne Mullin,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Victoria Spartz,                Hon. Harold Rogers,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Daniel Meuser,                  Hon. Byron Donalds,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Steven M. Palazzo,              Hon. Richard Hudson,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Andy Barr,                      Hon. Elise M. Stefanik,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Scott Fitzgerald,               Hon. Mike Kelly,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Tom Reed,                       Hon. Brett Guthrie,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. James Comer,                    Hon. Ralph Norman,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Julia Letlow,                   Hon. Glenn Grothman,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Steve Womack,                   Hon. Michael Guest,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Michael Cloud,                  Hon. Troy E. Nehls,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Barry Moore,                    Hon. Lisa C. McClain,
Member of Congress.                  Member of Congress.
 

                                     
                                     

 
 
 
Hon. Jodey C. Arrington,             Hon. Michael K. Simpson,
Member of Congress.                  Member of Congress.
 

                                 ______
                                 
 Submitted Video by Hon. Troy Balderson, a Representative in Congress 
                               from Ohio
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.wsj.com/video/series/on-the-news/help-wanted-truck-
drivers-to-unclog-the-supply-chain/86C1B309-522E-4C81-88D1-
16CAC0ADE1BB]
Help Wanted: Truck Drivers to Unclog the Supply Chain
Trucking companies desperately need drivers. Here's how they're 
        tackling the problem
        
        
          Editor's note: the video is available at the hyperlink above, 
        and is retained in Committee file.

By Wall Street Journal

Nov. 3, 2021 5:37 p.m.

    The trucking industry has long been dealing with a shortage of 
drivers and high job turnover, but supply-chain bottlenecks have 
underscored the need for new recruits. Here's how some companies are 
trying to get them behind the wheel. Photo: Robyn Beck/AFP via Getty 
Images.
                                 ______
                                 
 Submitted Comment Letter by Hon. Michelle Fischbach, a Representative 
    in Congress from Minnesota; Authored by Jack Roney, Director of 
         Economics and Policy Analysis, American Sugar Alliance
June 18, 2021

 
 
 
Hon. Thomas J. ``Tom'' Vilsack,      Bruce Summers,
Secretary,                           Administrator, Ag. Marketing
                                      Service
U.S. Department of Agriculture,      U.S. Department of Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Secretary Vilsack & Administrator Summers:

    We write today to provide information on critical goods and 
infrastructure for the U.S. sugar sector in response to your request 
for information. The structure of the domestic sugar industry in the 
United States was resilient in meeting the joint challenges of adverse 
weather in 2019, which lowered domestic sugar stocks, and the COVID-19 
pandemic in 2020, which shocked consumer demands in multiple ways. The 
U.S. sugar supply chain is deliberately configured to withstand such 
shocks, which are all too common for agricultural commodities.
    On February 24, 2021, President Biden issued an Executive Order 
(E.O.) on ``America's Supply Chains,'' which directs the Secretary of 
Agriculture to submit, within 1 year, a report to the President that 
assesses the supply chains for the production of agricultural 
commodities and food products. The U.S. Department of Agriculture 
(USDA) has requested that the public submit comments and information 
(``Supply Chains for the Production of Agricultural Commodities and 
Food Products,'' 86 FR 20652) to assist the USDA in preparing the 
report required by E.O. 14017. This submission from the American Sugar 
Alliance is in response to that request.
    As noted in 86 FR 20652, USDA notes its particular interest in 
those essential goods necessary for nutritional security given its 
related importance to national and economic security. This submission 
will detail how sugar is a critical and essential good for national and 
economic security.
    Moreover, as noted by USDA, sufficient processing, distribution, 
and production capacity across all agricultural commodities are 
critical for ensuring adequate access to essential goods. This 
submission will discuss how the current domestic sugar and trade 
policies were critical in maintaining the integrity and resilience of 
the domestic supply chain for the production, processing, and 
distribution of safe and adequate supplies of sugar for the American 
public during the pandemic despite a challenging economic situation.
Introduction: America's Supply Chains for Sugar
    The USDA notes in the request for public responses to direct 
comments at the policy objectives outlined in EO 14017 as they affect 
agricultural and food products supply chains.
    In E.O. 14017 President Biden affirmed that the

          ``. . . United States needs resilient, diverse, and secure 
        supply chains to ensure our economic prosperity and national 
        security. Pandemics and other biological threats, cyber-
        attacks, climate shocks and extreme weather events, terrorist 
        attacks, geopolitical and economic competition, and other 
        conditions can reduce critical manufacturing capacity and the 
        availability and integrity of critical goods, products, and 
        services. Resilient American supply chains will revitalize and 
        rebuild domestic manufacturing capacity, maintain America's 
        competitive edge in research and development, and create well-
        paying jobs. They will also support small businesses, promote 
        prosperity, advance the fight against climate change, and 
        encourage economic growth in communities of color and 
        economically distressed areas . . .''

    The most recent report examining the U.S. sugar-producing industry 
estimates that 142,000 jobs in 22 states and $20 billion in annual 
economic activity are associated with domestic sugar production.\1\ 
Many of the jobs and businesses associated with the U.S. sugar industry 
are in highly vulnerable and economically distressed rural areas.\2\
---------------------------------------------------------------------------
    \1\ LMC International, ``The Economic Importance of the Sugar 
Industry to the U.S. Economy--Jobs and Revenues,'' Oxford, England, 
August 2011.
    \2\ See examples of how the U.S. sugar industry helped recovery 
last year in rural America at https://sugaralliance.org/sugar-industry-
sustains-communities-during-pandemic/15934 and https://
sugaralliance.org/sugar-industry-lends-helping-hand-to-support-nations-
recovery/15953.
---------------------------------------------------------------------------
    American food manufacturers and consumers depend on a reliable, 
dynamic, geographically-dispersed domestic sugar industry to provide 
safe, high-quality, responsibly-produced sugar at a reasonable price.
    U.S. sugar policy is working well for American consumers, food 
manufacturers, and taxpayers. In 2020, 34.4 million tons of sugarcane 
and 33.6 million tons of sugarbeets were produced in the United States 
for processing into sugar for domestic food manufacturing and for 
household consumption. In total, 4.3 million tons of sugar from 
domestic sugarcane were refined and 5.1 million tons of sugar from 
domestic sugarbeets were processed.
    And as noted in E.O. 14017, resilient supply chains, like those 
around our domestic sugar supplies, are

          ``. . . secure and diverse--facilitating greater domestic 
        production, a range of supply, built-in redundancies, adequate 
        stockpiles, safe and secure digital networks, and a world-class 
        American manufacturing base and workforce. Moreover, close 
        cooperation on resilient supply chains with allies and partners 
        who share our values will foster collective economic and 
        national security and strengthen the capacity to respond to 
        international disasters and emergencies . . .''

    However, concerns over adequate domestic supplies of sugar are not 
new to the United States. For example, for reasons of food security, 
from 1890-1894 the U.S. Congress offered a bounty to entice investment 
by farmers to grow the crop and investors to build factories to 
encourage the growth of a domestic sugar industry.\3\ During WWII sugar 
was the first commodity rationed and the last commodity to come off 
rationing.
---------------------------------------------------------------------------
    \3\ See F.R. Rutter. 1902. ``The Sugar Question in the United 
States,'' Quarterly Journal of Economics, Vol. 17(1): 44-81.
---------------------------------------------------------------------------
    More recently, during the 2020 pandemic, consumer hoarding behavior 
was observed at the nation's retail grocery stores and supermarkets as 
essential food and consumer goods supplies were overwhelmed by spiking 
demands. Ingredients for baking and cooking (sugar, flour, oils, etc.) 
were top food items in demand as retail food service shuttered 
overnight. To meet those challenges and to provide sufficient supplies 
to food manufacturers, during March-May 2020 the domestic sugar 
industry put an equivalent of an additional 53 million 4 lb bags on the 
shelf in record time to meet consumer needs and provided a calming 
effect of a resilient supply chain.
    Moreover, sugar is an essential ingredient in the manufacture of 
most baked goods, snacks, soft drinks, and desserts.\4\ Without 
reliable supplies of sugar over the past year, it is likely we would 
have seen several food manufacturers having to idle operations 
resulting in lost jobs and shortages of staple goods at grocery stores 
at a time when consumers needed those more than ever, due to the 
closure of most food service establishments.
---------------------------------------------------------------------------
    \4\ A reported 74 percent of consumer-packaged foods contain 
caloric sweeteners (Ng, S.W., M.M. Slining, and B.M. Popkin. 2013. 
``Use of Caloric and non-caloric sweeteners in U.S. consumer packaged 
foods,'' Journal of the Academy of Nutrition and Dietetics, Vol. 112 
(11): 1828-1834.
---------------------------------------------------------------------------
Section (i) ``critical goods and materials underlying agricultural and 
        food product supply chains.'';
    As noted in the Presidential Policy Directive 21 (PPD-21) on 
Critical Infrastructure Security and Resilience and as outlined 
recently by the Food and Drug Administration (FDA) and USDA, ``. . . 
all components of the Food and Agricultural Sector are considered 
critical infrastructure.'' Sugarcane and sugarbeets are critical for 
the production of sugar and sugar is a critical natural food ingredient 
necessary for food manufacturing and for household 
consumption.5-6  In fact, 68% of packaged foods and 
beverages purchased in the United States contain added sugars.\7\
---------------------------------------------------------------------------
    \5\ See Presidential Policy Directive (February 12, 2013; https://
obamawhitehouse.archives.gov/the-press-office/2013/02/12/presidential-
policy-directive-critical-infrastructure-security-and-resil).
    \6\ See the FDA-USDA MOU (May 20, 2020; https://www.usda.gov/sites/
default/files/documents/mou-between-fda-usda-dpa.pdf).
    \7\ Popkin B.M., Hawkes C. Sweetening of the global diet, 
particularly beverages: patterns, trends, and policy responses. Lancet 
Diabetes Endocrinol. 2016; 4: 174-86.
---------------------------------------------------------------------------
    Real sugar comes from sugar beets and sugar cane. Sugar occurs 
naturally in all green plants. Of all plant varieties, sugar beet and 
sugar cane contain the highest concentrations of sucrose, making them 
the most efficient way for farmers to grow and harvest sugar. The same 
pure sugar extracted from sugar cane and sugar beets is identical to 
the sugar that is found in your pantry.
    Sugar has several functional properties in food and beverages. 
Sugar plays a crucial role in food preservation, helping to extend the 
shelf-life of certain food products.[5] For example, in jams 
and jellies sugar's ability to attract water prevents microorganisms 
from multiplying and spoiling food. In breads and baked goods this same 
quality keeps the bread moist, extending the shelf life thus reducing 
waste. Sugar can act as a preservative for medicines too and is also 
used for coating and flavoring medicines to mask their bitterness. 
There are over 60 different forms of sugar that provide a multitude of 
functions in the U.S. marketplace from making healthy foods more 
palatable to coatings on medicines masking their bitterness.
---------------------------------------------------------------------------
    \[5]\ Davis, E.A. Functionality of sugars: physicochemical 
interactions in foods. American Journal of Clinical Nutrition. 1995 ;62 
(suppl.): 170S-177S.
---------------------------------------------------------------------------
    The 2020-2025 Dietary Guidelines for Americans recognize that 
``added sugars help with preservation; contribute to functional 
attributes such as viscosity, texture, body, color, and browning 
capability; and/or help improve the palatability of some nutrient-dense 
foods.'' [4] For example, sugar is a key component of the 
Maillard Reaction in products like bread and other nutrient dense 
foods, improving palatability.\8\ Because of the multiple roles it 
plays, there is no single ingredient that can replace sugar's flavor 
and function. When sugar is removed, often several ingredients are 
added.
---------------------------------------------------------------------------
    \[4]\ U.S. Department of Agriculture and U.S. Department of Health 
and Human Services. Dietary Guidelines for Americans, 2020-2025. 9th 
Edition. December 2020. Available at DietaryGuidelines.gov. Accessed 
January 14, 2021.
    \8\ [1] Davis EA. Functionality of sugars: 
physicochemical interactions in foods. American Journal of Clinical 
Nutrition. 1995; 62(suppl.): 170S-177S [3] Goldfein KR, Slavin J.L. Why 
Sugar is Added to Food: Food Science 101. Comprehensive Reviews in Food 
Science and Food Safety. 2015; 14(5): 644-656.

          ``Overall, the public health recommendation about `added 
        sugars' must be balanced with the reality that sugar added to 
        food is an important piece of the food science puzzle given its 
        several functionalities in food. Not only can a spoonful of 
        sugar help the medicine go down, but it can help fruit, 
        vegetables and fiber go down as well.'' (Goldfein and Slavin, 
---------------------------------------------------------------------------
        2015).

    Sugar is a key partner in nutrient delivery. Adding a limited 
amount of sugar to foods that provide important nutrients--like whole-
grain cereal, flavored milk, or yogurt--to improve their taste makes 
sugar a key partner in nutrient delivery.
    According to the 2020-2025 Dietary Guidelines, improving 
palatability of some nutrient-dense foods, helps to meet food group 
recommendations. ``In fact, the nutrient dense choices included in the 
Health U.S.-Style Dietary Pattern are based on availability in the U.S. 
food supply and include 17-50 calories from added sugars, or 1.5-2 
percent of total calories.'' (USDA 2020).
    Sugar is a simple carbohydrate, providing glucose that the brain 
and muscles need to function. Carbohydrates are an integral part of a 
healthy diet.[3] Carbohydrates (sugars and starch) are the 
primary source of energy for the body because they are broken down into 
glucose. Glucose, which makes up half of each sugar molecule, is 
essential to the function of the brain, muscles, and other organs (our 
brains require around 130 grams of glucose per day).
---------------------------------------------------------------------------
    \[3]\ Goldfein K.R., Slavin J.L. Why Sugar is Added to Food: Food 
Science 101. Comprehensive Reviews in Food Science and Food Safety. 
2015; 14 (5): 644-656.
---------------------------------------------------------------------------
    Sugar is an ingredient that consumers know and recognize--and 
during the Pandemic, consumers turned to simple, essential ingredients 
like sugar for baking and cooking at home to both feed their families 
and bring some joy as restaurants closed and home cooking replaced food 
service purchases. Sugar, whether from fruits and vegetables, or 
extracted and crystallized, has been an important part of human diets 
throughout time. Consumers recognize sugar on an ingredient list, 
whether on the side panel of a food product or in a recipe. Sugar is 
pure and contains no preservatives or additives of any kind. Replacing 
sugar in food is a difficult and time-consuming process of trial and 
error. Changing food recipes at the industrial level is also quite 
expensive requiring product reviews by the appropriate food 
regulators.[7]-[8]
---------------------------------------------------------------------------
    \[7]\ https://onlinelibrary.wiley.com/doi/full/10.1111/1541-
4337.12151#::text=Sugar percent20
provides percent20bulk percent20which percent20impacts,than 
percent20sucrose percent20
(Spillane percent202006).
    [8] https://www.foodbusinessnews.net/articles/7433-g-m-
o-labeling-alone-may-cost-americans-3-8-billion.
---------------------------------------------------------------------------
Section (iii) ``the manufacturing or other capabilities necessary to 
        produce [sugar]'';
    American sugar producers are among the world's most efficient, 
while adhering to standards and costs for environmental, consumer, and 
worker protections that are among the highest in the world. American 
sugar producers can compete against foreign producers on a level 
playing field, free of government interventions, but cannot compete 
against foreign sugar subsidies that lead to a world sugar market with 
dumped surpluses and depressed prices.
    The current U.S. sugar policy is a critical response to foreign 
subsidization and dumping practices that result in a highly volatile 
global market for sugar. Absent current policy, American jobs in sugar 
production would be lost to foreign unfair trading practices and the 
viability and resilience of the U.S. food supply chain would be 
threatened. As noted at the 2018 Sugar Symposium by an industry 
representative, ``Historically big food companies demanded high-quality 
sugar but didn't want to pay for its actual cost of production. Now 
dependable delivery and a reputation with consumers for having top-end 
products is of increased importance. I am more worried about 
availability and security of supply.'' \9\
---------------------------------------------------------------------------
    \9\ See article at Agri-pulse (https://www.agri-pulse.com/articles/
11320-availability-and-exemplary-top-grade-service-gaining-higher-
priority-in-sugar-market).
---------------------------------------------------------------------------
    The U.S. sugar industry is among the world's largest and its 
producers are among the most competitive (see figure 1 below). The 
United States is the world's fifth largest sugar producer, the third 
largest consumer, and the third largest importer behind China and 
Indonesia. Despite the high cost of complying with some of the world's 
highest labor and environmental standards. The United States has the 
20th lowest cost of production, compared to the other 94 sugar-
producing countries.\10\ Most of those other sugar producers are 
developing countries with far lower government-imposed labor and 
environmental standards, regulations and costs.
---------------------------------------------------------------------------
    \10\ LMC International, ``Sugar Production Costs: Global 
Benchmarking 2011 Report,'' August 2012, Oxford, England.
---------------------------------------------------------------------------
    More than half of U.S. sugar production is from sugarbeets and a 
little less than half is from sugarcane.
Figure 1. U.S. low costs of sugar production

   The United States: One of the World's Largest and Lowest-Cost Sugar
                                Producers
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                 U.S. rank among world sugar markets \1\
------------------------------------------------------------------------
                                               U.S. Rank
------------------------------------------------------------------------
            Production                             5
           Consumption                             3
               Imports                             3
------------------------------------------------------------------------
          U.S. cost of production rank among all producers \2\
------------------------------------------------------------------------
                                     U.S. Rank        # of Producing
                                                    Countries/Regions
------------------------------------------------------------------------
                   All                      20                    95
  Beet......................                 1                    35
  Cane......................                35                    61
------------------------------------------------------------------------
\1\ USDA, Foreign Agricultural Service, May 2021. Rankings based on 5
  year Olympic Average (2015/16-2021/22).
\2\ LMC International, Sugar Production Costs: Global Benchmarking 2011
  Report, August 2012, Oxford, England. ``One'' ranking = lowest cost.

    The U.S. industry has 45 mills, factories, and refineries that 
process sugarbeets, sugarcane, and raw cane sugar, with that sugar 
distributed from 91 locations strategically located throughout the 
United States (see figures 2 and 3 below).
Figure 2. U.S. sugar industry profile

                       U.S. Sugar Industry Profile
                                 2020/21
                    (Thousand short tons, raw value)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Beet Sugar Production                5,118  21 beet factories in 9
                                             states \1\
Cane Sugar Production                4,181  16 cane mills in 3 states
                              -------------
Total                                9,299  37 facilities in 12 states
                              -------------
Sugar consumption                   12,230
TRQ Imports \2\                      1,673  40 WTO quota-holding
                                             countries + FTAs
Mexico Imports [3]                     981  Additonal U.S. import needs
Cane Sugar Refineries                       8 refineries in 6 states
Jobs generated                     142,000  22 states \4\
------------------------------------------------------------------------
\1\ Sugarbeets grown in 11 states.
\2\ Tariff-rate quota imports for domestic food use, actual entries.
  Total minimum access provided: 1.6 mst.
\3\ Limited under suspension agreements negotiated between U.S. and
  Mexican Governments in 2014; amended in 2017.
\4\ LMC International, ``The Economic Importance of the Sugar Industry
  to the U.S. Economy--Jobs and Revenues ,'' Oxford, England, August
  2011. Revenues generated: $20 billion per year.
Data source: USDA, June 2021 WASDE.

    The sugar industry is largely structured as farmer-owned 
cooperatives. The cooperative model has, in some circumstances, been 
used when corporations choose not to remain in such narrow-margin 
businesses as sugar. Cooperatives have proven to be effective in 
eliminating excess costs in the U.S. sugar industry, improving 
efficiency, and providing growers the opportunity to vertically 
integrate, govern, and earn more of the food production dollar. Thus, 
the farmer-owned cooperative business model is a mainstay of the 
domestic sugar industry.
Figure 3. U.S. sugar industry locations


    Beet sugar is produced in 11 states primarily in the north, because 
cold winter temperatures permit beets to be stored outside with minimal 
loss of their sucrose content. The outside storage of beets permits 
beets to be efficiently processed long after their harvest. Beet sugar 
primarily serves the interior of the country. This source of sugar is 
located near major food manufacturers, who have facilities close to 
other agriculture raw materials.
    Sugarcane is grown in three states, processed into raw sugar, then 
refined at eight coastal refineries. Cane sugar primarily serves the 
heavily populated coastal regions of the country.
    Beet and cane refined sugar warehousing and distribution terminals 
are strategically located throughout the U.S. to meet customer needs on 
a just-in-time basis. Refined sugar is sensitive to heat and moisture 
and as food grade product must be kept under seal during shipment by 
train and truck. Sugar is heavy and transportation is expensive, so 
moving the product short distances is preferred to reduce costs and 
maximize efficiencies.
    For the past 5 years, sugarcane and sugarbeet processing capacity 
has been currently sufficient to provide 65-76 percent of U.S. sugar 
needs. American cane sugar refiners refine most of the imported sugar 
such that more than 90 percent of sugar consumed in the U.S. comes from 
American farms or American cane refiners. The remaining ten percent of 
sugar consumed in the U.S. is imported as refined sugar. At a minimum, 
the United States has agreed to market access commitments under the 
World Trade Organization (WTO) or through bilateral/regional free trade 
agreements (FTAs) to allow approximately 1.4 million metric tons per 
year of raw and refined sugar to enter the United States on 
preferential terms, and in most cases duty free. In years when the 
production of sugarcane or sugarbeets is sufficiently low, the
    United States will seek additional supplies of imported sugar, 
first from Mexico as required under the antidumping and countervailing 
duty suspension agreements and then from other foreign sources. If 
domestic sugar from U.S. sugarcane or sugar beets exceeds 85 percent of 
U.S. needs, as it has rarely done in the past, sugarcane and sugarbeet 
processors would place surplus sugar in storage, at their own expense, 
until the following production year.
Section (iv) ``contingencies that may disrupt, strain, compromise, or 
        eliminate the supply chain [for sugar]'';
    There are a number of contingencies that have the potential to 
disrupt, strain, compromise, or eliminate the current, effective supply 
chain for domestic sugar. These would include policy changes, demand 
shocks, and supply shocks.
    Policy--Though the U.S. industry is efficient by global standards, 
long periods of low prices and high risks have resulted in the 
shuttering of over half of the beet and cane sugar processing 
facilities since 1985, with third party owners exiting the business and 
most of the remaining companies purchased by farmers to avoid closure 
(see figures 4-6 below). The loss of milling and refining capacity from 
further closures would threaten the domestic industry's ability to 
provide a safe and reliable supply of sugar, carefully tailored to the 
complex needs of U.S. food manufacturers and consumers and would cause 
further distress in many hard-pressed rural areas.\11\
---------------------------------------------------------------------------
    \11\ See how the U.S. sugar industry supports economic 
opportunities in rural America at https://sugaralliance.org/u-s-sugar-
policy-supports-american-jobs-strong-communities/15898.
---------------------------------------------------------------------------
Figure 4. Real sugar price falling over time
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
          Data sources: BLS--CPI-U. USDA--wholesale refined beet sugar, 
        Midwest markets; annual averages 1985-2020; 2021 January-May 
        average.
Figure 5. Low prices lead to consolidation
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: USDA, annual average wholesale refined sugar prices, 
        Midwest markets, 1985-2020. More operations would have closed 
        had farmers not organized cooperatively to purchase independent 
        beet and cane processing and refining facilities. User access 
        to domestic sugar would have suffered.
Figure 6. Sector consolidation since 1985
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: American Sugar Alliance, 2021.

    Two main risks exist to maintaining stable prices at levels that 
allow for orderly production and marketing of sugar domestically and 
allow investments in the supply chain (from research and development of 
seed varieties to broadband installation): changes to trade policy and 
changes to farm policy.

   Trade Policy: The current U.S. sugar policy buffers the U.S. 
        market against highly subsidized foreign competition, but some 
        may argue for weakening the existing measures. It is clear that 
        a subsidized and oversupplied global market results in 
        depressed and volatile prices. Due to the economic and 
        political importance of defending sugar production, and 
        consumption, every sugar-producing country's government 
        intervenes in some aspect of its sugar industry (price, 
        production, consumption, imports, and exports) to provide 
        economic stability and profitability to sustain their domestic 
        industry. Surplus production is sold (dumped) on the world 
        market to prevent oversupply in their own market and to clear 
        storage for the next crop, regardless of the world price. This 
        results in world prices below the world average cost of 
        production, posing a direct threat to more efficient producers 
        in the United States and elsewhere (see figures 7-8 below).
Figure 7. World raw sugar prices are lower than costs of production
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Sources: World Price: USDA, #11 raw contract, Caribbean 
        ports, monthly average prices, 1989-2021. Cost of Production: 
        LMC International, ``World Sugar Prices vs Costs of 
        Production,'' Oxford, England, April 2021.
Figure 8. World refined prices are lower than costs of production
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: World Price: USDA, London #5 contract. Monthly 
        Average prices, 1970-2021. Cost of Production: ``Sugar 
        Production Cost, Global Benchmarking Report,'' LMC 
        International, Oxford, England, April 2021.

      Subsidized and dumped sugar has driven out smaller sugar 
        producers around the world, some who were once suppliers to the 
        U.S. market. The International Sugar Organization (ISO) 
        surveyed 78 countries to learn actual wholesale prices--the 
        price producers in those countries receive for their sugar. The 
        ISO documents that, globally, actual wholesale refined sugar 
        prices have averaged 38 percent higher than the world price 
        over the past decade. Prices in other developed countries have 
        averaged 76 percent higher than the world market price, and 
        three percent higher than U.S. prices (see figure 9 below).\12\
---------------------------------------------------------------------------
    \12\ International Sugar Organization, ``Domestic Sugar Prices--a 
Survey,'' MECAS (19)05, May 2019.
---------------------------------------------------------------------------
Figure 9. Wholesale sugar prices within countries exceed global price
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Sources: International Sugar Organization (ISO), ``Domestic 
        Sugar Prices--a Survey'', May 2015 (MECAS(15)06) & May 2019 
        (MECAS(19)05); USDA, U.S. Midwest wholesale refined price and 
        London #5 refined sugar futures contract.

      Though the U.S. industry is efficient by global standards, long 
        periods of low prices have resulted in the shuttering of over 
        half of the beet and cane sugar processing facilities since 
        1985, with most of the remaining companies purchased by farmers 
        to avoid closure. There is too much risk and not enough returns 
        for third party investors to own sugar processing assets.
      Concessions the United States has made in the WTO and in a number 
        of bilateral/regional FTAs ensure that the U.S. is, and will 
        remain, a net importer of sugar. These commitments, along with 
        a growing population will produce a higher of rate of overall 
        demand to continue to outpace production. This has made the 
        United States the world's third largest sugar importer (behind 
        China and Indonesia), importing some 25-30 percent of U.S. 
        needs in a given year (see figure 10 below).
Figure 10. U.S. sugar imports
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Data Source: USDA, 2020/21 forecast; 2021/22 projection.

      Our import commitments to 40 countries under the WTO, plus in 
        FTAs with Mexico, Canada, the CAFTA-DR countries (Costa Rica, 
        El Salvador, Guatemala, Honduras, Nicaragua, Dominican 
        Republic), Colombia, Peru, and Panama, and have grown over time 
        (see 11 below).
      Further opening the U.S. market to the global market for sugar 
        would likely drive additional U.S. producers out of business. 
        For example, Mexico's open access to the U.S. market provided 
        under NAFTA led to the dumping of subsidized Mexican sugar on 
        the U.S. market in 2013, depressing U.S. prices, costing U.S. 
        farmers approximately $4 billion.\13\
---------------------------------------------------------------------------
    \13\ A successful anti-dumping and countervailing duty case in 2014 
led to the current regime of Suspension Agreements with Mexico, that 
still guarantees duty-free access under certain conditions. See the 
U.S. Department of Commerce fact sheet at https://www.commerce.gov/
news/fact-sheets/2017/07/final-amendments-mexican-sugar-suspension-
agreements-fact-sheet.
---------------------------------------------------------------------------
Figure 11. U.S. sugar market concessions as of 2020/21

------------------------------------------------------------------------
                            Minimum Import Amount (or Recent Average)
                       -------------------------------------------------
                                           FTAs Metric
                              WTO        tons, raw value       Total
                                              (MTRV)
------------------------------------------------------------------------
 WTO (41 countries,         1,139,195                         1,139,195
           including
             below)
------------------------------------------------------------------------
                               NAFTA/USMCA
------------------------------------------------------------------------
     Mexico (recent                --        1,089,666        1,089,666
        average) \1\
             Canada            10,300            9,600           19,900
       CAFTA/DR \2\           311,700          155,780          467,480
           Colombia            25,273           56,750           82,023
           Peru \3\            43,175           13,160           56,335
         Panama \4\            30,538            7,650           38,188
   Total (WTO + FTA         1,139,195      FTAs (excl.        2,892,787
          minimums +                      MX): 226,320
     Mexico actual)
------------------------------------------------------------------------
\1\ Suspension Agreements (SAs) signed December 2014, revised June 2017,
  limit imports from Mexico to U.S. import needs above WTO and FTA
  quotas. Mexico FTA total is 3 year average actual entries (2017/18-
  2019/20). The SAs are subject to annual administrative reviews and to
  sunset reviews every 5 years; next sunset review in 2024.
\2\ Central American Free Trade Agreement/Dominican Republic access for
  CY 2021; includes 2,000 tons of specialty sugars for Costa Rica. CAFTA
  countries' WTO access included in WTO total. Other CAFTA/DR countries:
  Guatemala, El Salvador, Honduras, Nicaragua, Dominican Republic.
\3\ Peru FTA access is 11,160 MTRV, subject to net exporter status (not
  yet achieved) and 2,000 MTRV of specialty sugars not subject to net
  exporter status.
\4\ Panama FTA specifies 6,600 tons of access must be raw; the remainder
  raw, refined or products. (CAFTA, Colombia and Peru FTAs do not
  specify raw or refined.)
Note: TRQs set in the FTAs for CAFTA/DR, Peru, Colombia, and Panama are
  subject to net-exporter provisions (exports, excluding those to the
  U.S., minus imports). This requirement may limit access under these
  TRQs for some of these countries in some years. For 2021, the DR,
  Panama and Peru were determined not to have met the trade surplus
  provision and are unable to utilize their respective raw/refined TRQs
  (raw TRQ in the case of Panama).

      Moreover, there are additional challenges of moving foreign 
        refined sugar to the U.S. market, such as questionable product 
        quality (resulting from a host of issues, such as packaging, 
        polarity, foreign materials, heat and humidity in transit). 
        There are significantly higher handling and transportation 
        costs for importing global sugar, and at times, logistical 
        obstacles. For example, the pandemic-induced container shortage 
        has significantly hampered India's ability to export sugar this 
        year. In Brazil, the world's largest sugar exporter, ships have 
        experienced lengthy delays (3+ weeks) and associated demurrage 
        costs waiting to load sugar due to shipping challenges 
        exacerbated by both the pandemic and China's voracious demand 
        for soybeans. Looking back more than a decade, when droughts 
        hit the four major exporters (Brazil, India, Thailand, and 
        Australia) at the same time in 2010, sugar prices shot up, 
        leading these countries to concentrate on delivering shipments 
        to nearby markets to save freight costs.

   Farm Policy: Domestically, the current sugar program, as 
        detailed in the farm bill, provides a safety net for sugarbeet 
        and sugarcane farmers by providing nonrecourse loans to assist 
        with orderly marketing throughout the year. That maintains a 
        steady flow of sugar supplies to consumers and industrial food 
        manufacturers without requiring wholesale intermediaries or 
        industrial facilities to invest in, construct, and maintain 
        costly storage facilities. Legislative proposals weakening 
        USDA's sugar program administration could jeopardize supply-
        chain resiliency by causing additional consolidation and 
        contraction. Less geographic dispersion of the industry implies 
        greater vulnerability to regional weather anomalies.

      Rising input costs for sugar production (equipment, fertilizer, 
        fuel, seed, labor, etc.) also put at stress the supply chains 
        for sugar production and distribution (see figure 12). For 
        example, labor availability is a perennial issue for sugarbeet 
        and sugarcane producers at harvest. Because the beet and cane 
        sugar content is best maintained for optimal extraction though 
        speedy harvests, the demand for labor during those periods 
        often exceeds local availability.
Figure 12. Input prices rising
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          1980s average compared with 2021 average-to-date.
          Sugar price data source: USDA Table 5; Wholesale refined 
        price (Midwest markets). Input cost and inflation data source: 
        U.S. [Bureau of Labor] Statistics.

   Other policy issues--In addition to changes in trade or farm 
        policy putting the resilience of the sugar supply chain at 
        risk, there are myriad other policy changes that could threaten 
        the supply of safe, reliable, and quality sugar to Americans.

     Crop insurance is an essential risk management tool 
            for growers and is usually a requirement by their bankers. 
            Historically, crop insurance has served beet growers with 
            minimal but adequate coverage. Purchase of buy-up policies 
            by the cane sector has been more limited. However, RMA has 
            always worked well with our growers and we appreciate their 
            attention to our concerns.\14\ And with continued 
            improvements to both the sugarcane and sugarbeet policies 
            as well as new products offering hurricane coverage there 
            has been continued growth in polices and coverage for the 
            sector. For example, in 2019, a year with adverse weather 
            for beet as well as cane, total premiums for sugarbeets 
            totaled $53.6 million and for sugarcane $6.1 million. 
            Indemnities totaled $172.5 million for beets and $4.8 
            million for cane.
---------------------------------------------------------------------------
    \14\ See for example https://www.rma.usda.gov/News-Room/Press/
National-News-Archive/2018-News/2018-News/RMA-18-074-Crop-Insurance-
for-Sugar-Beets-Sees-Improvements and https://www.rma.usda.gov/en/
Topics/Hurricane-Insurance-Protection-Wind-Index.

     Continued public- and private-sector research and 
            development is needed to provide continued advances in 
            sugarcane and sugarbeet plant genetics that are more 
            productive and more resilient to adverse growing 
            conditions. Over the past 20 years, sugar growers have 
            produced 16 percent more sugar on 11 percent less land: 
            sugarbeet yields are up 42 percent and sugarcane yields are 
---------------------------------------------------------------------------
            up 12 percent.

     Similarly, continued access to plant protectants and 
            other production inputs such as improved fertilizers will 
            continue to remain a priority for growers who continually 
            improve productivity to accommodate falling real commodity 
            prices. Use of science-based rules rather than the 
            precautionary principle to maintain access to those inputs 
            is essential.

     Changes to tax policy without safeguards for farm 
            ownership may interfere with the orderly succession of farm 
            ownership from one generation to the next and could be 
            disastrous for U.S. sugarcane and sugarbeet growers. Recent 
            tax proposals have involved re-examining capital gains 
            taxes and the treatment of stepped-up basis at the time of 
            an owner's death. Changes to long-standing tax policies 
            that would make it more difficult for family members to 
            continue efficient farm operations or force them to sell 
            off parts of the farm to satisfy tax liabilities would be 
            particularly difficult for capital-intensive operations 
            (such as beet or cane) to survive long without significant 
            consolidation. Farm operations have often been in a family 
            for generations and built up to scale over time. Efficiency 
            is driven by economies of scale and our growers achieved 
            efficiencies that have allowed them to remain in business. 
            Changes to tax policy that would eliminate the efficiencies 
            of scale would be disastrous to our industry and would be 
            hard to reverse. Such threats underscore the importance of 
            maintaining a broad sugarbeet and sugarcane production base 
            as an important component of a resilient U.S. supply chain.

    Shocks to Demand and Supply--It is clear that an important aspect 
of a resilient food and agricultural supply chain is the ability to 
adjust to rapid changes in demand or supply. As weather shocks becomes 
more frequent, the inelastic nature of demand for food suggests that, 
absent a resilient supply chain, year-to-year supply and price 
variations could be severe.

   For example, in 2019, severe weather disrupted sugarbeet 
        production in several U.S. regions and in Canada, as well as 
        sugarcane production in Louisiana and Mexico. Several sugar 
        marketing companies were forced to invoke force majeure because 
        of their inability to fulfill all their sales contracts. 
        Despite the 850,000-ton, or ten percent, decline in domestic 
        sugar production in 2019/20, the U.S. sugar market remained 
        stable. The United States was able to replace that lost supply 
        by increasing its imports of raw and refined sugar. During that 
        marketing year no food manufacturing company was required to 
        idle production for lack of sugar availability.

   Moreover, the U.S. sugar industry was able to ensure 
        adequate retail supplies as consumers shifted their demand away 
        from food-service establishments. To meet those challenges and 
        to provide sufficient supplies to food manufacturers, during 
        March-May 2020 the domestic sugar industry put an equivalent of 
        an additional 53 million 4 lb bags on the shelf in record time 
        to meet consumer needs and provided a calming effect of a 
        resilient supply chain.
Section (v) ``the resilience and capacity of American [sugar] 
        manufacturing supply chains and the industrial and agricultural 
        base of the United States to support national security [as it 
        relates to nutritional security] in the event that 
        contingencies occur'';
    As noted in E.O. 14017, resilient supply chains, like those around 
our domestic sugar supplies, ``. . . are secure and diverse--
facilitating domestic production, a range of supply, built-in supply 
redundancies, adequate stockpiles, safe and secure digital networks, 
and a world-class American manufacturing base and workforce. Moreover, 
close cooperation on resilient supply chains with allies and partners 
who share our values will foster collective economic and national 
security and strengthen the capacity to respond to international 
disasters and emergencies . . .''
    The supply chain for sugar production and distribution in the 
United States has remained strong, despite the closure of more than 
half of all sugar processing operations since the 1980's. Rising costs 
and declining real prices led to the loss of large portions of American 
sugar production and manufacturing but the remaining, more 
consolidated, industry has continued to invest to sustain efficiency 
and flexibility.
    As noted earlier, the sugar industry is largely structured as 
farmer-owned cooperatives. The cooperative model has, in some 
circumstances, been used when corporations choose not to remain in such 
narrow-margin businesses as sugar. Cooperatives have proven to be 
effective in eliminating excess costs in the U.S. sugar industry, 
improving efficiency, and providing growers the opportunity to 
vertically integrate, govern, and earn more of the food production 
dollar. Thus, the farmer-owned cooperative business model is a mainstay 
of the domestic sugar industry.
Sec. (v) part (A) ``manufacturing or other needed capacities of the 
        United States, including the ability to modernize to meet 
        future needs'';
    Though U.S. sugar producers and farmer-owned cooperatives remain 
under some economic duress, they have continued to make investments to 
survive and respond to supply and demand challenges. For example, 
sugarbeet processors have built or expanded refined storage facilities 
in major demand centers, such as Chicago, to better supply consumers 
and industrial users in the Midwest. Following the disastrous railcar 
shortages in the Upper Midwest in 2014/15, which severely hampered the 
orderly marketing of agricultural commodities, sugarbeet processors 
expanded storage capacity in demand centers to help mitigate future 
transportation bottlenecks.
    Similarly, continued investments by the sugarcane refining sector 
in Louisiana and Florida have expanded domestic refining capacity, 
lowering the need to import refined sugar.
Sec. (v) part (E) ``exclusive or dominant supply of critical goods and 
        materials and other essential goods and materials by nations 
        that are likely to become unfriendly or unstable'';
    As mentioned, the U.S. sugarbeet and sugarcane processing industry 
has the capacity to meet approximately 75 percent of U.S. demands, with 
the remainder of that demand being met by our trading partners, with 
most of the imported raw sugar being refined by U.S. refineries. The 
United States provides preferential access in commitments made under 
the WTO and various bilateral/regional FTAs. Our largest foreign 
supplier is Mexico.
    Mexican access to the U.S. market is determined by the antidumping 
and countervailing duty Suspension Agreements (SAs) negotiated by the 
U.S. and Mexican governments in 2014 and revised in 2017. The SAs were 
in response to the damage done to domestic producers when Mexico 
unleashed a flood of dumped and subsidized sugar into the U.S. market 
in 2013. As a result, prices collapsed, seriously injuring American 
farmers and their refiners, causing them to lose an estimated $4 
billion total from 2013 to 2014--and for the first time in over a 
decade U.S. sugar policy incurred a budgetary cost ($259 million) to 
the detriment of U.S. taxpayers.
    To combat these unfair trade practices and restore balance and 
stability, U.S. sugar producers filed anti-dumping (AD) and 
countervailing duty (CVD) cases in 2014. The U.S. International Trade 
commission ruled unanimously that Mexico had injured the U.S. sugar 
industry.\15\ The U.S. Department of Commerce (DOC) determined that 
combined duties of up to 80 percent were justified and would be needed 
to eliminate the injurious effects of Mexican dumping and 
subsidization. Such duties would almost certainly have stopped all, or 
nearly all, imports of sugar from Mexico. This was not the goal of the 
U.S. sugar industry. The goal was to stop dumped and subsidized sugar 
from threatening the viability of our industry and placing a burden on 
U.S. taxpayers. Therefore, in lieu of AD and CVD duties, the U.S. and 
Mexican governments negotiated the SAs in December 2014 to attempt to 
eliminate injury and, at the same time, allow the Mexicans substantial 
access to the U.S. sugar market.
---------------------------------------------------------------------------
    \15\ See ``Sugar from Mexico Injures U.S. Industry,'' at U.S. 
International Trade Commission, News Release 15-098 (October 20, 2015; 
https://www.usitc.gov/press_room/news_release/2015/er1020ll513.htm).
---------------------------------------------------------------------------
    Unfortunately, these SAs did not work as intended and proved 
totally ineffective. They neither eliminated dumping nor removed the 
injury to our producers, resulting in economic damages to the sugar 
industry of an additional $2-$2.5 billion (which totals $4-$4.5 billion 
in reduced income).
    This situation was brought under control only when the DOC 
successfully completed a revision of these SAs, which came into effect 
on October 1, 2017. Since then, the SAs appear to have been effective 
in ending Mexican damage to the U.S. sugar industry.
Sec. (v) part (F) ``substitutes or alternative sources'';
    The sweetener sector is very competitive. As mentioned, the U.S. 
sugar sector is a highly dispersed and competitive marketplace 
characterized by roughly 50 percent domestic beet sugar supplies and 50 
percent domestic or imported cane sugar supplies. Other sweetener 
supplies include caloric sweeteners such as honey or high fructose corn 
syrup and non-caloric artificial sweeteners such as aspartame. None 
have the multiple properties that sucrose provides. Changes in consumer 
preferences will drive longer-term trends; and replacing sugar with 
current alternative sources in the event of a short-term supply-chain 
disruption is not likely. If we consider the pandemic, consumer demands 
required swift movement of supplies from food service to retail grocery 
outlets. Such a movement was accommodated by the resilient sugar supply 
chain. In some cases, if industrial users wished to move to another 
sweetener, that would have required lengthy experimentation with 
ingredient lists and Federal food product approval--not the type of the 
swift response required during a supply chain disruption.
Sec. (v) part (G) ``current domestic education and manufacturing 
        workforce skills for the relevant sector and identified gaps, 
        opportunities, and potential best practices in meeting future 
        workforce needs for the relevant sector'';
    The sugar industry provides well-paying full-time jobs for many 
communities supporting small independent businesses in the United 
States, often in rural areas. Investments in automation at beet 
processors and cane mills and refineries have helped the sector build 
supply-chain resilience.
    The most recent analysis estimates that the U.S. sugar industry 
generates 142,000 jobs across the country and U.S. sugar companies pay 
fair wages and offer good benefits. Importantly, the sugar industry 
provides opportunities in communities where jobs can otherwise be 
limited. Sugar companies take pride in fostering a skilled workforce. 
Whether it is partnering with community colleges to develop educational 
opportunities or providing tuition reimbursement, additional training 
and technical classes, the sugar industry is continually encouraging 
growth and career advancement. The U.S. sugar industry is also strongly 
supported by its largely unionized workforce. In fact, 100 percent of 
beet sugar processors employ union labor, as do most cane refineries.
Sec. (v) part (H) ``the need for research and development capacity to 
        sustain leadership in the development of critical goods and 
        materials and other essential goods and materials, as 
        identified in subsections (c)(i) and (c)(ii) of this section'';
    Continued public- and private-sector research and development is 
needed to provide continued advances in plant genetics. Both beet and 
cane producers benefit from the USDA investments in the research 
stations located in:

   Cane: Canal Point, Florida; ARS Sugarcane Research Unit in 
        Houma, Louisiana

   Beets: ARS stations in Fargo, North Dakota; Fort Collins, 
        Colorado; East Lansing, Michigan Kimberly, Idaho, Sidney, 
        Montana Beltsville, Maryland, Pullman, Washington, and 
        Wyndmoor, Pennsylvania. Additional research is conducted by 
        nine land-grant universities, eight sugar companies and three 
        seed companies. That research will improve the resilience of 
        the supply chain for sugar in the longer run by making U.S. 
        beet and cane crops less vulnerable to severe weather and 
        disease.\16\
---------------------------------------------------------------------------
    \16\ See examples at https://sugaralliance.org/research-in-
louisiana-supports-sustainable-sugarcane-production/37544.
---------------------------------------------------------------------------
Section (ix) ``policy recommendations for ensuring a resilient supply 
        chain for the sector, including reshoring supply chains and 
        developing domestic supplies, enhancing access to financing, 
        expanding research and development to address risks posed by 
        climate change'';
    Last year posed enormous challenges to the U.S. food and 
agricultural system. The disruptive impacts of the COVID-19 pandemic on 
the U.S. agricultural system were broad and varied. Markets--food, 
commodity, labor, energy--were jolted by global, national, and regional 
shutdowns, slowdowns, and overall uncertainty. Those shocks to the U.S. 
and global economies affected both the supply and demand for food in 
the U.S. and led to short-term, localized shortages in the U.S.\17\ 
However, as USDA's 97th annual Agricultural Outlook Forum highlighted 
this February, U.S. agriculture was buttressed in this challenging 
period by innovation, which allowed the supply chain for food and 
agriculture to be resilient.
---------------------------------------------------------------------------
    \17\ https://www.usda.gov/media/blog/2020/09/24/americas-farmers-
resilient-throughout-covid-pandemic.
---------------------------------------------------------------------------
    Consumer food purchasing switched almost overnight with retail 
spending growing by more than 50 percent in March 2020, while hotel and 
restaurant spending fell by more than 60 percent as many states imposed 
emergency measures to control the pandemic.\18\ In addition, food 
manufacturers were challenged with receiving ample supplies of product 
to process as well as safeguarding their workers and ensuring 
sufficient labor supply to remain open. By and large, with few 
exceptions, the resiliency of the U.S. food supply chain ensured 
adequate food supplies for Americans throughout 2020. However, there 
were instances when that supply chain was strained, and the Federal 
Government had to step in and ensure the movement of food to Americans 
that either had little access to those food products or were having 
difficulties accommodating the rise in consumer food prices we saw at 
this time. But the bottom line is that no food manufacturer had to shut 
down due to a lack of sugar supply.
---------------------------------------------------------------------------
    \18\ See J. Balagtas and J. Cooper. 2021. ``The Impact of 
Coronavirus COVID-19 on U.S. Meat and Livestock Markets,'' USDA Office 
of the Chief Economist, working paper (March: https://www.usda.gov/
sites/default/files/documents/covid-impact-livestock-markets.pdf).
---------------------------------------------------------------------------
    We can see from this graphic provided by the USDA at the 
Agricultural Outlook Forum (see graph below (from https://www.usda.gov/
sites/default/files/documents/2021-meyer-slides.pdf) that as producers 
received lower amounts for their products in the first months of the 
pandemic, consumer prices were surging due to the stress on the supply 
chain.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: U.S. Bureau of Labor Statistics.

    The supply chain for sugar, like many throughout the food supply 
chain, was also stressed by the pandemic and change in consumer demands 
last year. In addition to the stress on the sugar supply system due to 
the pandemic, the domestic sugar industry was ending a disastrous 2019 
crop for many parts of the industry, due to cold wet weather in the 
Northern states and dry weather in Louisiana and Texas. Severe weather 
caused U.S. beet sugar production in 2019/20 to drop 12 percent from 
the previous year while Louisianan and Mexican cane sugar production 
each dropped by 18 percent. Meanwhile, the pandemic threatened sugar 
processing, transportation, and overall demand. However, because of the 
strong sugar policy enacted by Congress and administered by USDA, USTR, 
and DOC, the divergence in the PPI and CPI experienced by most of the 
U.S. food and agricultural sector was not as apparent for the sugar 
sector.
Lessons Learned--ensuring a resilient supply chain for U.S. sugar

  1.  The current trade policy for sugar is working.

        The U.S. sugar industry is a major player in the world sugar 
            market. The United States is the world's fifth largest 
            sugar-producing country and is among the most efficient. 
            The U.S. is the 20th lowest cost among the 95 largest 
            sugar-producing nations. Most of these are developing 
            countries with far lower government-imposed costs for 
            worker, consumer, and environmental protections. U.S. beet 
            sugar producers, mostly in northern-tier states, have been 
            called the lowest-cost beet producers in the world.\19\
---------------------------------------------------------------------------
    \19\ LMC International, ``Sugar & HFCS Production Costs: Global 
Benchmarking,'' Oxford, England, August 2011.
---------------------------------------------------------------------------
        The United States is also the world's third largest sugar-
            consuming country and the third largest sugar importer 
            behind China and Indonesia, providing guaranteed, largely 
            duty-free, access to 41 countries. This makes the United 
            States one of the world's most open markets to foreign 
            sugar. The amount of preferential access is prescribed 
            under the World Trade Organization and other trade 
            agreements to which the United States is a party.
        Since, U.S. sugar producers are among the lowest cost in the 
            world, one might ask why the industry requires a sugar 
            policy at all. To mitigate the potential for globally 
            subsidized sugar to be dumped on the U.S. market, sugar 
            policy has evolved to provide substantial access to trading 
            partners per agreed upon quantities at the higher U.S. 
            price. Similarly, Mexico, has agreed to limit exports to 
            the United States albeit at the higher U.S. price, through 
            negotiations with the Department of Commerce to avoid anti-
            dumping duties levied against Mexican sugar exports by the 
            United States in 2014 and amended in 2017.
        Researchers at Texas A&M University's Agricultural and Food 
            Policy Center have written: ``Policymakers in the United 
            States have long recognized that the world sugar market is 
            heavily distorted by foreign subsidies and market 
            manipulations and have provided U.S. sugar farmers with 
            some form of safety net for more than 200 years. Major 
            producers and exporters of sugar do not respond to the 
            signals of the world market but rather to the policies of 
            their governments that enable them to export sugar below 
            their costs of production and their own domestic prices.'' 
            \20\
---------------------------------------------------------------------------
    \20\ J. Outlaw and J. Richardson. 2016. ``Analysis of the Coalition 
for Sugar Reform Amendments to U.S. Sugar Policy: Potential Effect on 
Policy and Industry,'' Agricultural and Food Policy Center, Texas A&M 
University (May).
---------------------------------------------------------------------------
        A published study by University of Tennessee researchers has 
            noted: ``The U.S. sugar program protects domestic sugar 
            producers from world sugar prices because the world sugar 
            market consists of heavily subsidized sugar from countries 
            such as India and Brazil. The world sugar market carries 
            the moniker of being the most distorted commodity market 
            because nearly all sugar-exporting countries subsize and 
            protect their sugar industries.'' \21\
---------------------------------------------------------------------------
    \21\ Carlos J.O. Trejo-Pech, Karen L. DeLong, Dayton M. Lambert, 
and Vasileios Siokos, University of Tennessee, ``The impact of US sugar 
prices on the financial performance of US sugar-using firms,'' 
Agricultural and Food Economics, August 2020.

---------------------------------------------------------------------------
  2.  Current farm policy for sugar is working.

        U.S. beet and cane sugar producers process their crops into 
            sugar much faster than the market can absorb it. Producers 
            have to store sugar for many months at their cost until 
            their customers need it. The current sugar policy provides 
            nonrecourse loan to sugar producers so that they can manage 
            stocks, market their crop throughout the year, and benefit 
            from a needed economic safety net. U.S. sugar policy 
            requires close monitoring by the USDA to ensure that 
            supplies and demand remain in balance, targeting a range of 
            stocks to use from 13.5 percent to 15.5 percent to avoid 
            government costs. When supplies or demand move outside of 
            normal patterns, interventions can occur. With ready 
            supplies generally available from our main sugar trading 
            partner, Mexico, the close cooperation between the USDA, 
            the DOC, and Mexico ensures that the appropriate quantity 
            of raw and refined sugar from that country is available for 
            relatively quick purchase and delivery should the market 
            require it.
        The sugar provisions in the farm bill are designed to provide a 
            safety net for farmers. Legislative threats to undermine 
            the policy would accelerate the consolidation or collapse 
            of the domestic industry putting consumers at higher risks. 
            Rising costs of goods (inputs) and services (labor) and 
            flat sugar prices continue to threaten production over 
            time. To that end, we are experiencing greater costs to 
            adopt greater sustainability/climate solutions to meet 
            challenging growing conditions, but also to meet consumer 
            expectations. Proper administration of the U.S. sugar 
            policy is key to balancing the domestic market.
Conclusion
    Thank you for reviewing and strengthening the supply chains for 
critical and essential goods and infrastructure needed for national 
food security. We understand that you will be considering these public 
comments and information as you determine and develop the Department's 
response to President Biden's Executive Order 14017. We trust that the 
attached information from the American Sugar Alliance regarding the 
current supply chain for sugar production and distribution to the 
American people and the U.S. food manufacturing sector will be helpful 
in that effort. Again, it bears mentioning that thousands of U.S. 
sugarbeet and sugarcane farmers and sugar industry workers, as well as 
millions of consumers, rely on USDA to maintain the strength and 
certainty of the U.S. sugar program and to collaborate with USTR and 
DOC to maintain the integrity of the system governing U.S. sugar 
imports.
            Sincerely,

Jack Roney,
Director of Economics and Policy Analysis,
American Sugar Alliance.
                                 ______
                                 
Supplementary Material Submitted by Jon T. Schwalls, Executive Officer, 
 Southern Valley Fruit and Vegetable, Inc.; on behalf of Georgia Fruit 
                   and Vegetable Growers Association
Insert
          Mr. LaMalfa. You mentioned too that you--was it 70 percent of 
        ships leave the U.S. with empty containers, or in some cases no 
        containers, because they have left them on the dock because 
        they are in a hurry to get back?
          Mr. Durkin. Correct.
          Mr. LaMalfa. Has the 24/7 port order helped to change that 
        situation any?
          * * * * *
          Mr. LaMalfa. So it is not in place yet?
          * * * * *
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          * * * * *
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

February 14, 2022

  Hon. Doug LaMalfa,
  U.S. House of Representatives
  Washington, D.C.

  In Re: U.S. House Committee on Agriculture November 3, 2021 Committee 
            hearing, follow up question

  Question: Has the 24/7 port order helped to change that situation 
            any?

    Dear Congressman [LaMalfa]:

    In California that seems to have helped to an extent. Our nation 
has many ports, and the American supply chain has numerous parts that 
are interwoven. There is not a single source of failure, so the 
solutions must be diverse and flexible. Here on the eastern seaboard, 
Savannah specifically has operated 24/7 for decades and still 
encountered problems until it was solved through solutions like problem 
solving partnerships with CSX and Norfolk Southern that lead to an 
increase in truck capacity. Other specific solutions related to the 
trucking industry would be a moratorium on E-logs as we had during the 
pandemic. Relaxed DOT regulations that would move from fines for non-
egregious violations to warnings and lowering CDL applications from the 
current age of 21 to 18, as used in the military. I believe in general 
that we can find solutions through decreases in regulation that will 
not compromise safety. I do not feel that regulations should be the 
cause of food insecurity for our nation.
    Thank you in advance for your question and leadership in such an 
important issue.
            Respectfully,
            
            
Jon T. Schwalls,
Executive Officer,
Southern Valley Fruit and Vegetable, Inc.
                                 ______
                                 
 Supplementary Material Submitted by Ed Cinco, Director of Purchasing, 
    Schwebel's Baking Co.; on Behalf of American Bakers Association
November 12, 2021

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
House Agriculture Committee:

    Thank you for the opportunity to testify at the November 3, 2021, 
hearing on ``the immediate challenges to our nation's food supply 
chain.'' To follow up on questions the American Bakers Association 
(ABA) received, we are providing the Committee with additional 
information for the record to supplement ABA's responses on a few 
topics from the hearing:
Baking Industry Response to COVID-19
    From the beginning of this crisis, as baking is a Department of 
Homeland Security designated essential critical infrastructure sector, 
ABA has advocated for actions that protect workers, including priority 
access to personal protective equipment, critical hygiene and cleaning 
supplies, testing, and early access to vaccines. ABA works 
collaboratively with the Federal Government, including the U.S. Food 
and Drug Administration (FDA), U.S. Department of Health and Human 
Services (HHS), The Centers for Disease Control and Prevention (CDC), 
and U.S. Department of Agriculture (USDA) to effectively communicate 
and share information on best practices, industry hurdles and valuable 
guidance throughout the pandemic. Additionally, ABA has a comprehensive 
section on its website devoted to resources to help members understand 
best practices and guidance around COVID-19. ABA is a member of the 
U.S. Rapid Action Consortium (RAC) whose mission is to safely and 
effectively reopen the U.S. economy faster through a COVID-19 rapid 
action testing system to enable U.S. businesses to better create safer 
workplaces. ABA members remain committed to providing a safe and 
healthy work environment for all employees while producing and 
delivering wholesome, nutritious baked goods to Americans.
Edible Oils
    The demand for soybean oil and other vegetable oils has exceeded 
the current domestic supply. Attachment A, is an economic report on the 
surging biofuel demand on the U.S. Soy oil Market. This report 
completed in September 2021 by agricultural economist Bill Lapp, 
President, Advanced Economic Solutions, Inc. provides an in-depth 
outlook on the edible oil market supplementing ABA's testimony on 
soybean oil. Soybean oil is the most widely used cooking oil in the 
United States. We have seen the demand of soybean oil rise faster, in 
part because of steadily increasing renewable volume obligations as 
dictated by the EPA's Renewable Fuel Standard. If the Biden 
Administration were to maintain the renewable volume obligations at the 
current levels through 2022, it will help to alleviate the growing 
strain of the baking industry supply chain now and in 2022.
Sugar Subsidy Program
    The current USDA sugar subsidy program contributes to food industry 
supply chain hurdles. In addition to enforcing artificial price 
inflation, the program's complicated labyrinth of rules pertaining to 
imports and supply management bake bottlenecks and uncertainty into the 
domestic sugar supply chain. As a matter of policy, the current sugar 
program creates supply chain shortages for manufacturers of food, 
beverage, and other sugar-containing products.
    The current sugar shortage cannot simply be explained as another 
phenomenon of larger pandemic-related supply chain issues. With regards 
to the domestic sugar supply, supply continuity concerns have been 
ongoing for food manufacturers for decades. While workforce shortages, 
shipping costs and transportation bottlenecks are all contributing 
factors to the current supply chain crisis, they are exacerbated by the 
current sugar USDA subsidy program. The process for requesting tariff-
rate quota reallocations and other import remedies is slow, 
bureaucratic, and arcane. Reforms are desperately needed to guarantee 
market responsiveness and ensure a steady supply for domestic 
industrial users and U.S. consumers.
    If Congress wants to ease supply chain burdens for the food and 
beverage production sector, it should pass H.R. 4680, the Fair Sugar 
Policy Act of 2021. This legislation would safeguard an adequate supply 
of sugar at reasonable prices for our nation's food and beverage 
producers without jeopardizing the safety net for American sugar 
producers and refiners.
Workforce Shortage
    The baking industry depends on drivers with commercial driver's 
licenses (CDL) to help move and deliver their products. Bakers are 
often moving ingredients and products across state lines. Currently, 49 
states and the District of Columbia allow individuals under the age of 
21 to obtain a CDL and operate in intrastate commerce, however, those 
individuals would be prohibited from driving a truck across state lines 
until they are 21.
    ABA supports the bipartisan DRIVE-SAFE Act (H.R. 1745) which would 
create a rigorous two-step apprenticeship program creating a path for 
drivers under 21 to enter the trucking industry. This legislation 
requires candidates to complete at least 400 hours of additional 
training--more than what is required for any other CDL holders in the 
nation; safety is the priority of this legislation. ABA believes we 
need to continue to provide more opportunities for individuals under 
the age of 21 with extensive training opportunities to participate in 
the workforce and create a new pipeline for truck driving as a career 
choice. The driver shortage poses a major threat to the baking 
industry's supply chain.
    Thank you again for the opportunity to testify on the unique supply 
chain challenges facing the baking industry and for the opportunity to 
submit this additional supplemental information for the Committee's 
consideration as we all continue to work together to support and 
strengthen our supply chain and feed American families.
            Respectfully submitted,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            

 
 
 
Ed Cinco,                            Lee Sanders, CAE,
Schwebel's Baking Co.                SVP, Government Relations & Public
                                      Affairs/Corporate Secretary
 

Attachment A
Outlook and Implications of Surging Biofuel Demand On the U.S. Soyoil 
        Market \1\
---------------------------------------------------------------------------
    \1\ Revised September 6, 2021.
---------------------------------------------------------------------------
Bill Lapp, President, Advanced Economic Solutions

September 2021
Summary
    Demand for and production of renewable forms of biodiesel has begun 
to surge due to demand from biofuel mandates outpacing supply of soy 
and canola oil agricultural feedstocks. This market imbalance has 
caused edible oil prices to nearly triple and markets are anticipating 
supply shortages in upcoming quarters.
    Advanced Economic Solutions (AES) projects that renewable diesel 
production will double from 2020 to 2021 to reach 1.0 B gallons, thus 
straining already significant demand for vegetable oils as feedstocks 
for various forms of biodiesel fuels. Beyond 2021, significant refining 
capacity expansion and resulting demand driven by Federal and state 
biofuel mandates is expected to drive domestic renewable diesel 
production to 3-4 B gallons, triple the current level of production.
Background
    Growth in the use of soyoil to produce biofuels has risen sharply 
over the past 10 years, initially to produce biodiesel and more 
recently renewable diesel. The key drivers of rising demand for soyoil 
and other fats/oils are the Federal Renewable Fuel Standard (RFS) and 
state mandates such as California's Low-Carbon Fuel Standard (LCFS).
    During the October-September 2021/22 year, USDA is forecasting that 
11.5 B pounds of soyoil or 43% of total U.S. soyoil demand will be used 
to produce biofuels.\2\ This represents a 26% increase from a year ago. 
The 11.5 B pounds includes soyoil used in the production of both 
renewable diesel and biodiesel. AES estimates that more than \1/3\ of 
the feedstock used to produce renewable diesel during 2021 will utilize 
refined (RBD) soyoil. Because RBD soyoil is required by both food users 
and a sizable share of renewable diesel producers, a severe 
availability problem for RBD soyoil has developed. Demand for RBD 
soyoil for renewable diesel will continue to trend higher over the next 
12-24 months, creating a significant challenge in meeting both food and 
renewable diesel demand for RBD soyoil. In the coming years, a growing 
share of the total advanced biofuel will be renewable diesel due to its 
higher impact upon reducing greenhouse gases and other credits under 
biofuel programs. An already extremely tight supply/demand situation 
for U.S. soyoil would be exacerbated if the EPA does not adjust 
advanced biofuel renewable volume obligations (RVOs) for 2021 and 2022 
beyond the 2020 mandated level (5.09B gallons).
---------------------------------------------------------------------------
    \2\ USDA World Agricultural Supply and Demand Estimates, August 12, 
2021.
---------------------------------------------------------------------------
    As an indication of these market disruptions, soyoil prices, 
including both futures and RBD soyoil, have surged in response to a 
sharp increase in the amount of soy used to produce biodiesel and 
renewable diesel. After reaching a peak of $1.03 per pound during early 
June, RBD soyoil prices have relaxed into a $.70-80 range as of early 
September, but are still double year ago levels. Without changes in 
state or Federal biofuel policy, vegoil prices are expected to remain 
at unprecedented high levels during the coming year. Further, in the 
case of RBD soyoil there remains significant availability issue that 
should not be overlooked. Without a reduction in state or Federal 
mandates for biofuel usage, the bidding tension for RBD soyoil between 
food interests and renewable diesel producers is likely to become even 
more pronounced over the next 12-24 months.
    Over the next 24-36 months, the high prices and reduced 
availability of soyoil (and particularly RBD soyoil) will require an 
increase in supplies through increased domestic production (plantings) 
and imports,\3\ as well as a reduction in the demand for soyoil for 
uses other than renewable diesel. In the short-term, the combination of 
Federal and state mandates, as well as tax credits, has led to a 
bidding war between biofuel producers and food user. The resolution of 
the shortfall in supply will be challenging, and several critical 
assumptions/risks that could compound the availability problem need to 
be recognized--these include weather disruptions, expansion of biofuel 
mandates to other states and an expansion of Federal RFS annual volume 
mandates.
---------------------------------------------------------------------------
    \3\ US soyoil imports are currently subject to a 19.1% import duty.
---------------------------------------------------------------------------
Soyoil Futures & Refined (RBD) Soyoil Prices (Cents/Lb)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Key Take-Aways

  1.  The price of refined soyoil has more than doubled over the past 
            year, rising from $.35 per pound to over $.70.\4\ 
            Availability of adequate supplies of refined soyoil to meet 
            demand for traditional food use as well as rising demand 
            for renewable diesel remains a concern during 2022 and 
            beyond.
---------------------------------------------------------------------------
    \4\ The Jacobsen.

  2.  It is notable that the United Nations' FAO Food Price Index 
            reports that in August their vegetable oil sub-index is 68% 
            higher than a year earlier. This is further indication that 
            increased biofuel production is impacting vegoil markets 
---------------------------------------------------------------------------
            beyond the U.S.

  3.  U.S. soyoil used to produce biofuel--both biodiesel and renewable 
            diesel--is forecast by USDA to rise to 11.5 B pounds during 
            the 2021/22 year, a surge of 26% from a year earlier. This 
            means that U.S. soyoil used to produce transportation fuel 
            will represent 43% of total usage--in other words nearly 
            half of edible soy food crop is being combusted in 
            vehicles.

  4.  The recent surge in soyoil demand, and the resulting supply 
            shortage, is being driven by Federal and state mandates to 
            produce transportation fuel made from fats and oils. A 
            reduction in the RVOs would allow for the vegoil markets to 
            ``catch up'' with the sharp increase in demand.

  5.  AES expects that the demand for soyoil (and other fats and oils) 
            to produce renewable diesel will at least triple over the 
            next 3 years based on already robust renewable fuel 
            mandates increased by expanded renewable diesel production 
            to meet more stringent mandates.

  6.  Higher prices for soyoil and other fats/oils are expected to lead 
            to market adjustments, including reduction in demand for 
            other uses, as well as increased supplies of soyoil and 
            imported canola oil. However, these adjustments will take 
            time, and in the interim vegoil prices are expected to 
            trade at historically high levels, with availability/
            shortages remaining a risk.

  7.  Rising vegoil prices are impacting the cost of food production: 
            the July 2021 producer price index for fats and oils is 47% 
            higher than a year earlier. Although the consumer price 
            index for fats and oils during July 2021 is only up 4.0% 
            from a year earlier, inevitably higher vegoil prices being 
            incurred by producers will be passed on to consumers.
Renewable Diesel Production Surging
    Demand for and production of renewable diesel has been growing in 
recent years and is poised to surge during 2021 and beyond. EPA RIN 
data shows that domestic renewable diesel production tripled between 
2015 and 2020, rising from 177 mm gallons to 533 mm gallons. AES 
estimates that renewable diesel production will nearly double between 
2020 and 2021 to 1.0 B gallons. Based upon EPA RIN data, year-to-date 
production during January-July 2021 is 39% above year-ago levels.\5\ 
Beyond 2021, significant refining capacity expansion and further 
tightening of biofuel mandates is expected to drive domestic renewable 
diesel production to 3-4 B gallons, more than double the projected 2021 
forecast.
---------------------------------------------------------------------------
    \5\ EPA EMTS data and EIA production data.
---------------------------------------------------------------------------
Domestic Renewable Diesel Production (MM Gallons, 2021F)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: EPA, AES.

    The dramatic increase in renewable diesel production and related 
investments has been driven by the need to meet the requirements of 
California's Low-Carbon Fuel Standard (LCFS).\6\ The LCFS took effect 
in January 2011 , with the ultimate goal of reducing the carbon 
intensity of California's transportation fuel by 6.25% during 2019 
(relative to 2010), increasing linearly to a reduction of at least 20% 
by 2030.
---------------------------------------------------------------------------
    \6\ https://ww2.arb.ca.gov/sites/default/files/2020-09/basics-
notes.pdf.

   Carbon Intensity Benchmarks for Gasoline and Diesel Fuel and their
                               Substitutes
------------------------------------------------------------------------
                            Gasoline Average CI      Diesel Average CI
          Year                  (gCO2e/MJ)              (gCO2e/MJ)
------------------------------------------------------------------------
             2019                     93.23                   94.17
             2020                     91.98                   92.92
             2021                     90.74                   91.66
             2022                     89.50                   90.41
             2023                     88.25                   89.15
             2024                     87.01                   87.89
             2025                     85.77                   86.64
             2026                     84.52                   85.38
             2027                     83.28                   84.13
             2028                     82.04                   82.87
             2029                     80.80                   81.62
     2030 onwards                     79.55                   80.36
------------------------------------------------------------------------

    The net result of the biofuel mandates has been a surge in 
investment in renewable diesel capacity in recent years, with 
additional capacity expected in the coming years. Based upon survey of 
industry participants, AES estimates that biofuel refining industry 
capacity will increase from 734 mm gallons to 1,550 mm gallons by the 
end of 2021 and increase by an additional 68% to 2,610 mm gallons by 
December 2022. AES has identified nine renewable diesel plants that are 
currently in operation, with annual operating capacity as large as 275 
mm gallons. By the end of 2022, AES estimates that a total of 19 plants 
will be in operation, capable of producing over 2.6 B gallons.
    Beyond 2022, there are at least nine additional projects that are 
planned and have been announced that would increase industry capacity 
to produce renewable diesel to well over 4 B gallons. AES believes that 
several of these announced projects will not materialize, and that it 
is possible that domestic renewable diesel capacity will ultimately 
peak at 3-4 B gallons.
Estimated Potential U.S. Renewable Diesel Production Capacity
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: AES, Industry Estimates.
Role of the Renewable Fuel Standard in Driving Increased Soyoil Demand
    The Renewable Fuel Standard (RFS) was established by Congress via 
the Energy Policy Act of 2005 (P.L. 109-58) and expanded in 2007 by the 
Energy Independence and Security Act (P.L. 110-140). Both of these 
statutes amended the Clean Air Act to create the RFS which requires 
that transportation fuels sold in the U.S. contain a certain volume of 
renewable fuels. The U.S. Environmental Protection Agency (EPA) 
administers annually the required volume obligations (RVO) under the 
RFS by setting minimum volumes to be included in the annual fuel 
supply.
    Under the RFS, EPA sets an overall volume for based on target 
volumes for conventional biofuel such as corn-based ethanol, and an 
advanced biofuel mandated volume. Each advanced biofuel is assigned a 
lifecycle greenhouse gas (GHG) emission value threshold relative to the 
baseline lifecycle GHG emissions for gasoline. This value is measured 
in ethanol equivalent gallons to standardize the RVO requirements 
across different types of fuel. Each gallon of biodiesel equates to 1.5 
ethanol-equivalent gallons, while each gallon of renewable diesel 
equates to 1.7 ethanol-equivalent gallons toward meeting the advanced 
biofuel requirement. Biodiesel and renewable diesel comprise most of 
the advanced RVO quota, with cellulosic and various other advanced 
biofuels filling the balance.
    The advanced biofuel RVO for 2020 was established by EPA at 5.09 
billion ethanol-equivalent gallons. To meet this volume, 1.8 billion 
physical--or ``wet''--gallons (2.7 billion ethanol equivalent gallons) 
of biodiesel and 530 million wet gallons (900 million ethanol-
equivalent gallons) were produced in the U.S. Together biodiesel and 
renewable diesel supply represent about \2/3\ of the advanced RVO. The 
balance was made up by cellulosic and the various other types of 
advanced renewable fuels.\7\
---------------------------------------------------------------------------
    \7\ Based upon data from the EPA Moderated Transaction System 
(EMTS).
---------------------------------------------------------------------------
    Historically, a majority of renewable fuel produced in the U.S. to 
meet the advanced biofuel RVO has been biodiesel. In the coming years, 
however, a growing share of the total advanced biofuel will be 
renewable diesel due to its higher ethanol-equivalency and other 
credits granted under state low carbon fuel programs. Based upon EPA 
RINs data, domestic biofuel production during January-July 2021 rose by 
3.5% to 1,373 mm gallons--this includes a 2.5% decline in biodiesel and 
a 39% increase in renewable diesel production. AES is forecasting 2021 
domestic biodiesel production to total 1,662 mm gallons (^9%), offset 
by an 86% increase in renewable diesel production to 990 mm gallons. A 
key unknown over the remainder of 2021 and 2022 is the size of EPA RVOs 
for advanced biofuels, which as of early September 2021 have yet to be 
proposed or established.
Domestic Production of Advanced Biofuels Biodiesel vs. Renewable Diesel 
        (2021F)
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: EPA, AES.

    Combined, in calendar 2021, AES estimates that a total of 20.5 B 
pounds of feedstock will be used to produce biodiesel and renewable 
diesel, an increase of 16% from 2020. This includes an estimated 9.2 B 
pounds of soyoil.
    Looking ahead, an already extremely tight supply/demand situation 
for U.S. soyoil would be exacerbated if the EPA elects to increase the 
advanced RVOs for 2021 and 2022 beyond the 2020 level.

 
 
 
2020 Advanced Biofuel Breakdown      2021F Advanced Biofuel Breakdown
 

                                     
                                     

 
 
 
  Source: EPA.                         Source: EPA, AES.
 

Implications for U.S. Fats and Oils Availability
    The annual U.S. supply of fats and oils is estimated to total 51.1 
B pounds.\8\ This includes both production and imports during the 2020/
21 year. Of this total, soyoil represents 25.7 B pounds or 50% of the 
total. Excluding food use, the U.S. has a total available fats and oils 
supply of 26.8 B pounds to meet all other demand components--renewable 
diesel, biodiesel, exports and feed/industrial use.
---------------------------------------------------------------------------
    \8\ USDA Foreign Ag Service, The Jacobsen.

 
 
 
Estimated U.S. Fats and Oils Supply  Estimated U.S. Fats and Oils
 (MM Lbs)                             Supply--Excluding Food Use (MM
                                      Lbs)
 

                                      
                                      

 
 
 
  2020 Production + Imports
  Source: USDA, Census.
 

    Overall availability of U.S. fats and oils to meet renewable diesel 
requirements is already very limited and will become an even greater 
challenge in the next 2 years. Based upon estimated 2020/21 U.S. fats 
and oil supplies, renewable demand will exceed the net available supply 
(total excluding food and biodiesel usage) by mid-2022.\9\
---------------------------------------------------------------------------
    \9\ Based upon USDA FAS and Jacobsen data; assumes 8.5 pounds of 
feedstock per gallon of renewable diesel.
---------------------------------------------------------------------------
    With industry capacity rising to 2.6 B gallons by the end of 2022, 
renewable diesel feedstock requirements could rise to over 20 B 
pounds--compared to 4.1 B during 2020 and an estimated 8.4 B during 
2021. Further expansion of industry diesel refining capacity toward 4 B 
gallons or more will make the challenge even greater. Markets are 
already attempting to adjust to the shortfall, but the outlook for U.S. 
fats and oils availability is forecast by AES to be extremely 
tight.\10\
---------------------------------------------------------------------------
    \10\ In January 2021, the Energy Information Agency began 
publishing feedstock usage for the production of biofuels--biodiesel 
and renewable diesel combined. The data indicates that during January-
June 2021, 9.1 B pounds of feedstock was used--an annualized usage rate 
of over 18 B pounds. Soyoil usage during these 6 months totaled 4.1 B 
pounds (45% of the total). https://www.eia.gov/biofuels/update/.
---------------------------------------------------------------------------
Estimated Year-End Feedstock Requirements for U.S. Renewable Diesel
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Post 2022 assumes capacity only rising to 4.0 B gallons (vs. 
        announced/planned capacity of 6. 7 B gallons.
          Source: AES, Industry Estimates.

 
 
 
                        US Fats/Oils Availability
                                (MM Lbs)
 
2020/21 U.S. Supply                                              51,101
  less
2020/21 U.S. Food Use                                            24,260
2020/21 U.S. Biodiesel Use                                       12,548
2020/21 U.S. Exports                                              4,223
                                                            ------------
  8Net Availability                                              10,070
                                                            ------------
          Potential Annual Renewable Diesel Feedstock Required
 
8Dec. 20                                                          6,239
Dec. 21                                                          12,283
Dec. 22                                                          22,185
Post Dec. 2022                                                   34,000
 
Source: USDA, EIA, AES Analysis.

Implications for Soyoil Availability and Prices
    Total U.S. soyoil usage during the October-September 2020/21 crop 
year is forecast to total 25.5 B pounds, roughly equal to total supply 
(production plus imports). The breakdown of forecast soyoil usage 
during 2020/21 includes 14.7 B pounds (58% of total usage) for food 
use, 7.8 B pounds for biodiesel (31%), 1.3 B pounds (5%) for renewable 
diesel and 1.7 B pounds for exports (7%).\11\
---------------------------------------------------------------------------
    \11\ USDA World Ag Outlook Board, August 2021; breakdown between 
renewable diesel and biodiesel is an AES estimate.
---------------------------------------------------------------------------
    Due to the growth in renewable demand, the breakout of usage is 
forecast by USDA to change significantly during the 2021/22 crop year. 
Renewable diesel usage is forecast rise by 230% to 4.3 B pounds. Each 
of the other usage categories are forecast to decline--food use 
declining 7% to 13.7 B pounds, biodiesel declining 10% to 7.2 B pounds 
and exports declining 15% to 1.5 B pounds.
    Food use patterns for all vegoils are already being impacted by the 
surge in the use of soyoil to produce renewable diesel. USDA is 
forecasting a decline of 7% in soyoil food use to 13.7 B pounds. This 
will be offset in part by increased use of other oils, led by canola 
oil gaining 7% to 4.6 B pounds (despite drought in Canada). Overall 
usage of the nine major vegoils is forecast to decline by 0.6% to 24.2 
B pounds, driven primarily by a lack of supply.

 
 
 
2020/21 U.S. Soyoil Usage (B Lbs)    2021/22F U.S. Soyoil Usage (B Lbs)
 

                                     
                                     
    The impact of the dramatic growth in renewable diesel production 
has created an extremely tight U.S. supply/demand situation for soyoil 
as well as other fats and oils. This has led to a doubling in the price 
of soyoil futures over the past year.
    Because a significant share of the renewable diesel plants requires 
refined (RBD) soyoil, an even greater concern has been availability of 
RBD soyoil. Because RBD soyoil is required by both food users and more 
than \1/3\ of renewable diesel producers, a severe availability problem 
for RBD soyoil has already developed.
    AES expects renewable diesel plants currently requiring RBD soyoil 
will invest in ``pre-treat'' capabilities over the next 12-24 months--
this will give these plants the latitude to use a wider variety of fats 
and oils. However, in the near-term, the demand for RBD soyoil for 
renewable diesel will remain large and continue to trend higher, 
creating a significant challenge in meeting both food and renewable 
diesel demand for RBD soyoil.
    U.S. RBD soyoil total demand (food and renewable diesel) was steady 
between 2014/15 and 2019/20 averaging 14.3 B pounds. However, during 
2020/21 RBD soyoil usage surged to 16.1 B pounds during 2020/21, driven 
entirely by a sharp increase in the use of RBD soyoil to produce 
renewable diesel.
    Looking ahead, demand for RBD soyoil during 2021/22 is forecast to 
rise by 14% to 18.4 B pounds. While the use of soyoil for food during 
2021/22 is expected to decline by 7%, this will be more than offset by 
an expected 230% increase in the use of soyoil to produce renewable 
diesel.
U.S. RBD Soyoil Demand (B Lbs)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    US soyoil refineries operate with limited excess capacity, and thus 
the surge in demand for RBD soyoil during 2020/21 has led to a sharp 
increase in the premium paid for RBD soyoil over futures (the 
``basis''). The basis for RBD soyoil is typically less than $.04 per 
pound but has risen to as high as $.30 per pound in recent months--a 
seven-fold increase from the long-term average premium.\12\
---------------------------------------------------------------------------
    \12\ The Jacobsen.
---------------------------------------------------------------------------
    The shortfall in RBD soyoil is expected to become more extreme 
during 2021/22 as RBD soyoil demand is forecast to increase by an 
additional 14%. Eventually (12-24 months from now) the amount of 
renewable diesel requiring RBD soyoil may decline, as renewable diesel 
plants add ``pre-treat'' capabilities and are able to use a wider 
variety of feedstock. However, in the near-term, availability of RBD 
soyoil will remain a major challenge.
    Soyoil prices, including both futures and RBD soyoil have surged in 
response to a sharp increase in the amount used to produce renewable 
diesel. Prices peaked in early June--soyoil futures reached $.713 per 
pound (+154% vs. a year earlier), while RBD soyoil reached a record was 
at a record $1.04 per pound (+347% vs. a year earlier. Prices have 
eased in recent months but as of early September remain 80-100% higher 
than a year earlier.\13\
---------------------------------------------------------------------------
    \13\ Chicago Mercantile Exchange, The Jacobsen.
---------------------------------------------------------------------------
    The current economics imply soyoil prices (both futures and RBD 
soyoil) will remain at extreme levels during the coming year. Further, 
in the case of RBD soyoil there remains an availability risk that 
should not be overlooked. The bidding war for RBD soyoil between food 
interests and renewable diesel producers is likely to continue for at 
least the next 12-24 months.
Soyoil Futures & Refined (RBD) Soyoil Prices (Cents/Lb)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Market Solutions: How and When Will Markets Adapt to Rising Renewable 
        Diesel Production
    As the use of soyoil and other fats and oils increases further in 
the coming year, prices have the potential to rise further and 
availability will remain a concern. End-users in both the food and 
renewable diesel sector have highly inelastic demand, as witnessed 
during the past year.
    With soyoil prices rising dramatically, the current shortfall will 
eventually be resolved, but it will require 2-3 years of supply/demand 
adjustments. These include these seven expected adjustments:
    Near-term--beginning to occur[:]

  (1)  Declining U.S. soyoil exports: As the U.S. has become 
            uncompetitive in world markets, export demand for U.S. 
            soyoil has begun to decline (2020/21 exports are forecast 
            to decline by nearly half to 1.5 B pounds). The USDA is 
            forecasting a 15% decline in export during 2021/22.

  (2)  Reduced use of soyoil to produce biodiesel: From the 2020/21 
            total of 7.8 B pounds, use of soyoil to produce biodiesel 
            is forecast by AES to decline to 7.2 B pounds during 2021/
            22. Achieving the forecast decline is predicated upon the 
            EPA establishing a reduced annual advanced biofuel mandate 
            for 2021 and 2022.

    Medium-term--expected to occur during the next 12-24 months[:]

  (3)  Adding ``pre-treat'' capabilities at renewable diesel plants 
            that currently require RBD soyoil: There currently are four 
            plants in operation that require RBD soyoil, and an 
            additional three plants that will initially require RBD 
            soyoil to operate (total potential demand of 5.5 B pounds). 
            Each of these plants is expected to invest in pre-treat 
            capabilities, and eventually (in 12-24 months) have the 
            capability to use a variety of feedstock in the production 
            of renewable diesel.

    Longer-term: 24 months and beyond[:]

  (4)  U.S. imports of Canadian canola/canola oil: U.S. supplies of 
            canola are expected to increase modestly during 2021/22 
            (+0.4 B pounds vs. 2020/21). However longer-term, Canada 
            has already announced plans to increase their crush 
            capacity from 11.0 MMT to 15.6 MMT by 2023/24--enough to 
            add over 4 B pounds to the North American vegoil supply. 
            The additional canola oil will be used to displace soyoil 
            in food use and renewable diesel production.

  (5)  Additional U.S. crush capacity: U.S. producers have announced 
            plans to add over 100 mm bushels of crush capacity over the 
            next 2-3 years, increasing the supply of U.S. soyoil by 1.1 
            B pounds.

  (6)  Development of other non-food oilseeds: Several alternative 
            oilseeds that produce inedible oil are under discussion 
            (e.g., camelina and jatropha). These hold longer-term 
            potential, but the scale and timetable are uncertain.

    Soyoil (and particularly RBD soyoil) is expected to remain in 
extremely tight supply for the next 24 months. Beyond that, over the 
next 24-36 months, the high prices and reduced availability of soyoil 
(and particularly RBD soyoil) is expected to be largely ``remedied,'' 
primarily through the seven economic dynamics outlined above if current 
estimates hold true. Supply and demand adjustments should eventually 
make the availability challenges diminish.
    However, the resolution of the shortfall in U.S. soyoil supply over 
the next 24-36 months is not certain, and several critical assumptions/
risks that could compound the availability problem need to be 
recognized:

   Weather: if U.S. soybean or Canadian canola production is 
        reduced due to adverse weather, the availability and price 
        challenges in the vegoil markets will continue.

   Expansion of LCFS to Other States: Currently only California 
        has implemented a LCFS program, but other states (OR, WA, MN, 
        MO), as well as Canada, are implementing or considering 
        adopting a program similar to the LCFS. If the LCFS expands 
        beyond California, the availability and price challenges facing 
        the vegoil market would become greater.

   Maintaining or Expanding RFS Mandate Levels: If the EPA 
        maintains or increases the annual Renewable Volume Obligations 
        (RVOs) from 2020 levels (particularly for advanced biofuels), 
        the Federal requirements will drive demand for soyoil and other 
        fats and oils higher, and thus exaggerate the already tight 
        supply of soyoil.
Appendix
What is Renewable Diesel:
    Renewable diesel is a biomass-based diesel fuel that is chemically 
the same as petroleum diesel fuel. It may be used in existing petroleum 
pipelines, storage tanks, and diesel engines. It can be produced from a 
variety of biomass materials but is almost exclusively produced using 
fats and oils. It qualifies as an advanced biofuel under the Renewable 
Fuel Standard (RFS) program.
    Renewable diesel is produced through various thermochemical 
processes such as hydrotreating, gasification, and pyrolysis. This 
differs from biodiesel (methyl ester), which is produced through a 
chemical process involving the introduction of a catalyst (methanol). 
Because renewable diesel is chemically the same as petroleum diesel, it 
may be used in its pure form (called R100) or mixed/blended with 
petroleum diesel.\14\
---------------------------------------------------------------------------
    \14\ https://www.eia.gov/energyexplained/biofuels/biodiesel-in-
depth.php.
---------------------------------------------------------------------------
2020 EPA Renewable Volume Obligations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Renewable Diesel vs. Biodiesel
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Current U.S. Renewable Diesel Plants and Capacity
Current Est. Annual U.S. Renewable Diesel Capacity
    As of May 2021: 900 MM Gallons Annually
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
U.S. Soyoil Food Use vs. Biofuel Use (B Lbs)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: USDA, AES.
                             Hearing Insert
          Mr. LaMalfa. You mentioned too that you--was it 70 percent of 
        ships leave the U.S. with empty containers, or in some cases no 
        containers, because they have left them on the dock because 
        they are in a hurry to get back?
          Mr. Durkin. Correct.
          Mr. LaMalfa. Has the 24/7 port order helped to change that 
        situation any?
          * * * * *
          Mr. LaMalfa. So it is not in place yet?
          * * * * *
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          * * * * *
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

February 9, 2022

    Dear Congressman LaMalfa,

    Please find below, my response to the question asked at the 
November 3, 2021, House Agriculture Committee hearing on ``the 
immediate challenges to our nation's food supply chain.''
Ports Efficiencies
    Since the outset of the pandemic and the associated supply chain 
challenges, ABA has been active in briefing Congress, the Department of 
Transportation, and the Federal Maritime Commission on how delays can 
disproportionately harm bakeries seeking timely and necessary imports 
of ingredients and supplies. While official reports from select ports 
have seen some delay time improvements, including the West Coast ports 
of Los Angeles and Long Beach, industry reports indicate the opposite. 
Despite isolated improvements, port efficiencies remain a major 
challenge, even after the Christmas rush. On the whole, American ports 
are moving more goods than they ever have and the ability to continue 
baking production often relies on consistent and timely access to 
imported supplies.
    As port efficiencies remain a major challenge, ABA is cognizant of 
the multi-faceted nature of this problem. The baking industry has 
struggled with its own workforce shortages and understands how that can 
hamper the effectiveness of any logistical operation. As detailed in 
the hearing, ABA remains supportive of government policies that seek to 
address staffing shortages and allow for maximum employment. ABA has 
also supported the Ocean Shipping Reform Act of 2021, that really seeks 
to address and diminish the power ocean carriers have over the process, 
establishing minimum service standards and bringing transparency to 
detention and demurrage changes. In congruence with other importers, 
this legislation is supported by a wide coalition of agricultural and 
food manufacturing entities seeking reliable port access, whether for 
import or export purposes.
Cross-Border Vaccination Policy for Truck Drivers
    A recent development since the November 2021 hearing is a new 
policy mandating the COVID-19 vaccine for truck drivers delivering 
goods between the U.S. and Canada. The North American agricultural 
supply chains are deeply intertwined. The policy to require truck 
drivers to be fully vaccinated will create additional strain on the 
truck driving workforce and cause additional supply chain issues. 
Specifically, for the baking industry, it has a considerable impact on 
grain shipments from Canada to the U.S., which is a significant 
ingredient for bakers. ABA asks that various exemption and testing 
options be provided to truck drivers to ensure the supply chain is not 
disrupted.
Edible Oil
    Since the November 3 hearing, the Environmental Protection Agency's 
(EPA) issued proposed annual Renewable Volumes Obligations (RVO) under 
the Federal Renewable Fuel Standard (``RFS'') Program (Docket EPA-HQ-
OAR-2021-0324). As I mentioned in my previous Committee testimony, I am 
greatly concerned that EPA's proposal to increase annual volumes of 
subsidized biofuels for 2022 will further heighten the ongoing edible 
oil supply crisis the food industry is experiencing. Additionally, I 
testified before EPA at their January 4 RFS Public Hearing and re-
emphasized my previous concerns. I also shared that in its proposed 
rule development, EPA used out of date economic impact data on the 
edible oil supply to develop the proposal. The Clean Air Act requires 
EPA to correct and update its Regulatory Impact Analysis to use 
accurate and current food and commodity economic data. The actual price 
for soybean oil for 2020/21 was 75% higher than the assumption used by 
EPA. The actual price of soybean oil for 2021/22 was 91% higher than 
EPA's assumption. These faulty assumptions prevent EPA from recognizing 
the cumulative, incremental, soybean oil cost to consumers of nearly $8 
billion over 2 years. Further, I emphasized that EPA should work 
closely with USDA to understand and accurately analyze this significant 
impact.
    I was alarmed when the divergence of vegetable oils for use in 
biofuels led to a tripling of soy oil prices during 2021. Consequently, 
for some food companies and bakers, edible oil literally will not be 
available at any price due to diversion of edible oil from food 
production to fuel production.
    EPA's proposed RVO levels would further worsen the problem. For the 
reasons listed above, to avoid exacerbating inflation and the edible 
oil supply crisis, EPA should set biodiesel and renewable diesel 
volumes for 2022 and future years no higher than actual production for 
2021. The current price shock and supply crisis threatens to intensify 
the inflationary pressures that are being felt in the general economy, 
impacting American families at the kitchen table. ABA is asking that 
EPA use its statutory authority under the RFS program and consider food 
and commodity prices when finalizing the upcoming RVOs for biodiesel 
and renewable diesel. It would be helpful for Congress to also 
encourage U.S. EPA to accurately update their regulatory impact 
analysis with current data and to use their statutory powers as they 
should when setting the biodiesel and renewable diesel RVOs as the 
Agency finalizes this important rule.
            Thank you,

Ed Cinco, Schwebel's Baking Co.,
On behalf of the American Bakers Association.
                                 ______
                                 
 Supplementary Material Submitted by Greg Ferrara, President and Chief 
            Executive Officer, National Grocers Association
Insert
          Mr. LaMalfa. You mentioned too that you--was it 70 percent of 
        ships leave the U.S. with empty containers, or in some cases no 
        containers, because they have left them on the dock because 
        they are in a hurry to get back?
          Mr. Durkin. Correct.
          Mr. LaMalfa. Has the 24/7 port order helped to change that 
        situation any?
          * * * * *
          Mr. LaMalfa. So it is not in place yet?
          * * * * *
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          * * * * *
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

January 26, 2022

    One of the biggest challenges for independent retail supermarkets 
and the wholesalers that serve them is the acute labor shortage. The 
pandemic has driven able bodied people out of the workforce and many 
simply aren't returning. This impacts everything from truck drivers, 
where we face a shortage of 80,000 to 100,000 drivers to warehouse 
workers to in-store customer facing positions. While our industry is 
adjusting to this new reality, including embracing more technology, the 
reality is we need more workers and we need them now. Congress should 
take up the challenge to help fund training programs ranging from truck 
driving to butchers, bakers to chefs that give our young people and 
those who are currently facing barriers to employment the tools they 
need to develop marketable skills that lead to good quality careers.
    The other challenge impacting the independent supermarket industry 
is the lack of competition which has caused hundreds of local 
supermarkets to shut down over the years, leaving communities without 
access, while also impacting local producers who have fewer outlets to 
sell their goods. Strong, local communities are the key to a healthy 
American economy, which is why Congress and the Administration should 
be doing everything they can to ensure we have a strong, competitive 
food supply that ensures local communities can thrive.
            Respectfully Submitted,

Greg Ferrara.
                                 ______
                                 
 Supplementary Material Submitted by Mike Durkin, President and Chief 
 Executive Officer, Leprino Foods Company; on Behalf of International 
                        Dairy Foods Association
Insert 1
          Mrs. Axne. . . .
          So, Mr. Durkin, my question--as my State of Iowa is our 
        nation's second largest exporter of ag products, I am concerned 
        about how some foreign-owned shipping companies are essentially 
        dictating trade. They are bringing in imports into our ports, 
        but yet they are leaving with empty ships, without our products 
        being exported on them. This is very contrary to standard 
        import/export trade. Can you elaborate on your testimony on how 
        the Ocean Shipping Reform Act can address this problem, and 
        other solutions that we might act on here in Congress?
          Mr. Durkin. Two of the key components of that shipping reform 
        bill, one is that it would put a limit on terms of the empty 
        containers that are going back. There was always a portion of 
        that did go back--given the import/export imbalance, but that 
        number was at around ten percent prior to COVID, and now we are 
        at 70 percent, so there clearly is an issue that has kind of 
        escalated to a point--where I call this, obviously, is a 
        crisis. And then the second component of that is when those 
        orders get rolled, and we lose those bookings, as I mentioned, 
        there are fees from--demurrage fees, and other excess charges 
        that us, as well as other companies, have to handle. And I 
        notice--that is a big component--a second component of the 
        Ocean Shipping Reform Act that would help.
          And, again, I can't emphasize enough how quickly--if we can 
        get this thing--get it kind of--I know it has bipartisan 
        support, how quickly we can get this bill passed and approved, 
        and I think that would be a big help.

    The correct response is:

   The actual % empty containers going back pre-COVID was under 
        60% (source: Hoard's Dairyman *). The average rolled bookings 
        pre-COVID was 10%.
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Hoard's Dairyman Intel--Thursday \1\
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Oct. 21 2021 08:01 AM
West Coast port woes pile up for dairy
By Stephen Cain, National Milk Producers Federation \2\
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    The West Coast receives top billing in any discussion of ports and 
dairy exports. Roughly \2/3\ of all U.S. dairy exports, on a product-
volume basis, leave the United States via the West Coast. On a milk 
solids equivalent basis, that number jumps to roughly 85%.
    The importance of the West Coast as a dairy export center cannot be 
understated--and over the last 18 months, it has been put to the test. 
Greater trade volume, labor constraints, global container shortages, 
and higher operating costs have strained a system that's inadequately 
prepared to deal with it.
    The result?
    Delays and congestion that's limiting U.S. dairy's opportunity to 
expand on what's already record demand for its products overseas.
    The congestion is centered around Southern California, where a 
staggering 75 vessels at times have been waiting to berth in the Los 
Angeles and Long Beach ports. Average wait times are approaching 10 
days . . . some vessels have waited 20 days to berth. U.S. consumer 
purchases are the most immediate cause of the congestion.
    This U.S. Retail Sales chart below shows the level at which 
consumer retail spending has incrementally grown over the last decade 
compared with the tremendous spike over the last year.
U.S. Retail Sales
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    That's created a shipping container imbalance driven by the huge 
demand for high-value products out of Asia. To put that demand in 
dollars, the average amount shipping companies are charging per 
container leaving Asia bound for the U.S. West Coast is currently 
around $8,000--that rate had reached a dizzying height of over $15,000 
only a few short weeks ago.
    Comparatively, the average cost per container headed to Asia from 
the West Coast is, while still record high, much less, at around 
$1,200. This difference has led to a further compounding issue of an 
increasing number of empty containers being sent back to Asia in an 
attempt to save a few days in transit time; the faster a shipping 
company can get a vessel back to Asia, the faster it can benefit from 
the higher freight rates.
    Shipping companies would rather eat the cost and ship a vessel back 
to Asia empty than wait for a full load of products to ship back. The 
chart below shows the increasing percentage of empties leaving select 
West Coast ports.
Percentage of Empties Boarded in LA-LB-Oakland
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Unfortunately, dairy isn't immune to the congestion, and like other 
industries, it's attempting to divert product through other ports. In 
the 12 months leading up to June of this year (latest data available), 
dairy exports out of West Coast ports dropped nearly 10% while dairy 
exports out of the East Coast and the Gulf climbed 30% and 22%, 
respectively.
    But in many cases, diversion isn't economically viable, given the 
inland shipping costs of moving product to a port further away, country 
of destination, and labor constraints. Adding to the bad news, 
congestion won't clear up in the short-term. Dairy likely will struggle 
with port congestion through much, if not all, of 2022.
    Despite all of this, though, dairy continues to show its 
resiliency. U.S. dairy exports over the last 12 months are up 10%; a 
testament to the strength of the entire industry and the strong global 
demand for our products. While the water ahead may (literally) look a 
little choppy regarding export logistics, the U.S. dairy industry will 
continue to do what it is does best; produce high-quality dairy 
products for consumers, both domestically and abroad.

           Hoard's Dairyman Intel 2021
Insert 2
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          Mr. Durkin. Yes.
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

    Thank you for this important question and opportunity to respond in 
writing for the record. It is imperative that we take immediate action 
to help alleviate the bottlenecks at the ports. All sections of the 
supply chain are interdependent and resolving one area alone will not 
solve the issue. The following are suggestions that would have 
immediate impact:

  1.  Provide immediate incentives for carriers to load U.S. 
            agricultural exports awaiting shipment vs. leaving with 
            empty containers. This could include prioritized berthing 
            access, reduced terminal fees or financial incentives for 
            shipping loaded outbound containers. Currently 70% of the 
            containers leaving the U.S. are empty.

  2.  Prioritize perishable goods: It is not uncommon to give 
            preference to perishable goods in trade scenarios; for 
            example, the U.S.-Mexico-Canada Agreement has provisions 
            built into its Chapter on Sanitary and Phytosanitary 
            Measures that allow for expedited import check procedures 
            for perishable goods. Similar provisions could be applied 
            to loading goods for export.

  3.  Temporarily halt detention, demurrage, and penalty fees that are 
            related to rolled and omitted bookings. Carriers penalize 
            the exporters by charging daily fees for sitting in a yard 
            waiting for the next booking. This compounds the problem, 
            holding up much needed equipment such as chassis and 
            further exacerbating the downstream supply chain issues. 
            This year, our company has been invoiced more for detention 
            and demurrage than we have for freight from the two 
            carriers who export most of our goods. They are currently 
            incentivized to leave goods accruing penalties, if that 
            were to be halted, they may have more incentive to load 
            goods.

  4.  Expand port hours of operations beyond the LA and LB ports, for 
            example Oakland, Houston, Seattle) and incentivize labor to 
            help clear congestion in off hours. Include all operations, 
            not just crane operations.

  5.  Review chassis availability and how to efficiently turn 
            equipment. If suggestions 1-3 above are put into action, 
            carriers will have incentive to load containers and will be 
            disincentivized to cancel or roll bookings if they are not 
            accruing penalties. This will free up the chassis currently 
            held up with loaded goods ready for export and allow them 
            to be released back into the supply chain to move 
            additional containers. At any given time, we have 100-175 
            loaded containers sitting on chassis waiting to be loaded.

  6.  Provide waivers on trucking restrictions for both trucks and 
            drivers that eliminate capacity. For example, provide a 
            waiver to allow gross vehicle truck weight limits to 
            increase from 80,000 lbs. to 91,000 lbs. with an additional 
            sixth axle. This configuration complies with the Federal 
            bridge formula and is shown to have better braking capacity 
            than 80,000-lb., five-axle trucks. This adjustment would 
            allow manufacturers to transport products more efficiently 
            while also reducing industry's carbon footprint.

  7.  Cosponsor and support the quick passage of the Ocean Shipping 
            Reform Act of 2021 (H.R. 4996). Congress should pass the 
            Ocean Shipping Reform Act of 2021 which would address 
            unreasonable detention and demurrage charges, export cargo 
            bookings, and other carrier practices that are currently 
            hurting U.S. agricultural exporters.
                                 ______
                                 
   Supplementary Material Submitted by Jon Samson, Vice President of 
   Conferences, Executive Director, Agriculture & Food Transporters 
               Conference, American Trucking Associations
Insert
          Mr. LaMalfa. You mentioned too that you--was it 70 percent of 
        ships leave the U.S. with empty containers, or in some cases no 
        containers, because they have left them on the dock because 
        they are in a hurry to get back?
          Mr. Durkin. Correct.
          Mr. LaMalfa. Has the 24/7 port order helped to change that 
        situation any?
          * * * * *
          Mr. LaMalfa. So it is not in place yet?
          * * * * *
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          * * * * *
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

    Thank you for the opportunity to speak on current and future 
solutions. Due to ongoing high demand, but particularly during the peak 
shipping season we saw in the third and fourth quarters last year, 
shipping lines returned empty containers to Asia from U.S. ports rather 
than loaded agriculture export containers because they were able to 
extract higher profits from Chinese and other Asian manufacturers 
seeking expedited loading of consumer goods bound for the United 
States.
    Initiatives like the 24/7 port order are a part of the longer 
answer towards improving cargo throughput and efficiency at our ports. 
Trucks working at our ports also need inland warehouse facilities to 
remain open for longer hours so that goods can be dropped off or picked 
up, better notifications and data sharing to enable loaded agriculture 
export cargo to be prioritized and loaded, and infrastructure 
improvements to reduce bottlenecks and congestion.
    Improvements under the Infrastructure Investment and Jobs Act will 
help to alleviate some of those problems. We also welcome the inclusion 
of the Ocean Shipping Reform Act by the House of Representatives in the 
America COMPETES Act and hope to see that language, especially changes 
to detention and demurrage penalty charge practices, enacted into law. 
Finally, commercial partners are working to improve data 
standardization and real-time cargo visibility to improve supply chain 
planning. All of these elements can play near- and long-term roles in 
ensuring resilient agriculture supply chains.
                                 ______
                                 
   Supplementary Material Submitted by Rod Wells, Chief Supply Chain 
Officer, GROWMARK, Inc.; Chairman of the Board, Agricultural Retailers 
                              Association
Insert 1
          Ms. Schrier. Thank you, Mr. Chairman. Well, supply chain 
        dysfunction made worse by the pandemic was first brought to my 
        attention over a year ago by hay farmers in Ellensburg, 
        Washington. Since then, I have been in frequent communication 
        with growers and exporters all around the 8th District, and 
        even around the country, about these issues that they are 
        facing, and I am hearing it from my colleagues as well. It has 
        become more apparent to others.
          For more than a year, these farmers have shared with me how 
        pandemic conditions, but also the behavior, the really bad 
        behavior, of foreign-owned shipping carriers, you could almost 
        refer to them as a cartel, are hurting their industry. They are 
        threatening export markets, they are threatening relationships 
        that have been built up over decades with foreign purchasers, 
        and the costs and the availability of transportation to both 
        domestic and export markets continue to be a big challenge for 
        wheat, cherry, apple, pear growers, hay growers in my district. 
        I would mention that, even with trucking, some growers in my 
        district have said that the cost for a truck to the East Coast 
        has more than doubled in the last year, and others say that the 
        cost to move fruit just to a port to be loaded on a ship for 
        export costs as much as the entire trip did just about a year 
        ago. And a lot of you know this, because you are living it.
          There has been some discussion about the Federal Maritime 
        Commission, and, Mr. Wells, in your testimony you talked about 
        how it could be doing more to alleviate the backlog at our 
        ports. I was wondering, because sometimes it feels like they 
        just don't have the teeth to do what they need to do, 
        especially since we have no American shipping companies to 
        compete, I was wondering what teeth you think the Commission 
        has, what more they can do to enforce rules, and in addition to 
        the Ocean Shipping Reform Act of 2021, which I am proud to 
        support, what else can Congress do to help?
          Mr. Wells. Yes, great questions. Frankly, I probably need to 
        get back with you, Congresswoman, on that. I am not up to speed 
        fully on the maritime and the port, given my central Illinois 
        background. But if I could get written comments back to you, I 
        can address that question at a later time.

November 11, 2021

    Hon. Kim Schrier,
    United States House of Representatives,
    Washington, D.C.

    Dear Congresswoman Schrier:

    Thank you for participating in the U.S. House of Representatives 
Agriculture Committee on November 3, 2021, regarding The Immediate 
Challenges to our Nation's Food Supply Chain. During your time for 
questions, you noted supply chain disruptions were brought to your 
attention by hay farmers in the 8th U.S. Congressional District. 
Farmers across the nation are experiencing supply chain challenges like 
you described and are interested in seeing steps taken to restore 
supply chain integrity, while also learning what actions will be best 
long-term for our country.
    You noted that there has been discussion regarding the Federal 
Maritime Commission, questions about their authority, and if they are 
doing enough to help. What teeth does the commission have, what more 
can they do to help shipping, and what more can Congress do?
    Legislation you are cosponsoring, Ocean Shippers Reform Act (H.R. 
4996), is a step Congress can take now that would address a number of 
challenges we reviewed at the hearing. The legislation would be a 
critical move toward improving port oversight, operations, and taking 
steps toward addressing unfair demurrage and detention practices 
impacting agriculture exports.
    Listed below are additional actions that could be taken and are 
consistent with the Agricultural CEO Council recommendations to the 
President:

   Direct the U.S. Department of Justice to review the existing 
        Shipping Act law to determine if the enforcement tools in that 
        act can be activated to gain compliance with the other 
        provisions of the act setting forth reasonable practices.

   Establish an interagency working group focused on 
        facilitating agricultural exports.

   Sponsor initiatives that increase operational tempo, 
        including increasing gate operations, to include port 
        authorities, terminal operators, labor, ocean carriers, 
        shippers, and truckers.

   Encourage and support the expansion of dual transactions, to 
        improve port efficiency, for motor carriers of all firm sizes.

   Encourage investment in an expansion of the overall supply 
        of containers.

   Provide Federal support for deployment of port and national 
        data sharing portals such as already developed by the Port of 
        Los Angeles.

   Incentivize ocean carriers to increase export flows by fully 
        utilizing their existing capacity.

   Increase coordination between the Federal Maritime 
        Commission (FMC) and the Surface Transportation Board on 
        oversight of multi-modal container shipments to ensure that the 
        FMC and the Shipping Act apply to the complete international 
        transit of goods from origin to destination.

   Provide public support for and any necessary resources 
        towards the activities the FMC is undertaking on this issue, 
        including the Interpretive Rule on Demurrage and Detention and 
        other enforcement and administrative actions.

    We know supply chain disruptions involve a number of challenges 
converging at a similar point in time. It will likely take a number of 
actions to improve our supply chains, so they are less vulnerable in 
the future. Passing the bipartisan infrastructure bill will be helpful 
in addressing our nation's infrastructure needs. Additional actions 
Congress could take include passing a working H-2A program to help fill 
labor shortages in agriculture, consider additional flexibility in 
Hours-of-Service rules so trucking can respond in a timely manner to 
periods of high demand, consider increasing weight limits, and focus on 
constructing new 1,200 long locks on our inland waterway system to 
efficiently meet the capacity demands of modern shipping.
    Attached is a comprehensive list of potential actions assembled by 
the Agriculture Transportation Coalition. You may find several valued 
suggestions.
    We look forward to working with you and other Members of the U.S. 
House Agriculture Committee to improve our supply chains to meet the 
demands of a strong economy.
            Sincerely,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Rod Wells,
Chief Supply Chain Officer, GROWMARK,
Chairman of the Agriculture Retailers Association.
                               attachment
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Inventory of Supply Chain `Solutions'--November 2021
    The Agriculture Transportation Coalition has been asked by U.S. 
Government agencies, the White House, and Congressional Committees for 
`solutions' to the supply chain crisis--big or small, easy or not.
    This Inventory of Supply Chain `Solutions'--November 2021, was 
proposed by exporters, importers, port leaders, truckers, terminal 
operators (very confidentially), public officials such as Governor 
Newsom, and most importantly, 8those closest to the crisis, the 
membership of the AgTC. Some could be implemented immediately, some 
already are, others will take years, some are logical but 
controversial, some sound simple, but none are. That does not mean 
these shouldn't be considered and as appropriate, pursued aggressively. 
Most would agree: the status quo is not sustainable.
    Each of these 64 `solutions' requires a more detailed description 
and discussion of the feasibility, cost, benefits, interests of various 
stakeholders, the short-term and long-term impacts on the supply chain. 
We are glad to discuss, and add others. We encourage private parties 
and/or governments to consider these, add other `solutions', and as 
appropriate, implement.
    The agriculture shipping community continues to urge, together with 
importers, exporters, service providers, passage of H.R. 4996, the 
bipartisan Ocean Shipping Reform Act of 2021 introduced by Rep. John 
Garamendi (D-CA) and Rep. Dusty Johnson (R-SD).
    Feel free to contact the AgTC team at: [email protected].

    This list of `solutions' is organized as follows:

  1.  Marine Terminal Operations/Trucking into Terminals

  2.  Additional Land/Warehousing--Near Ports and Inland

  3.  Trucking Costs and Truck Driver Shortage

  4.  Information/Transparency of the Supply Chain Investment

  5.  Rail Service at Inland Rail Ramps for Ag Access to Marine 
            Terminals

  6.  Chassis Shortage

  7.  Ocean Carrier Practices; Federal Maritime Commission Enforcement

  8.  Creating a Competitive Marketplace

  9.  Federal Agency Contribution to Increased Export and Import 
            Fluidity

  10. Federal Financial Assistance for Agriculture Lost Sales, 
            Transport Costs, Product Damage

  11. Restoring Port Authority Control over Port Operations
1. Marine Terminal Operations/Trucking into Terminals
  a.  Expanded marine terminal gate hours; while 24/7 would be ideal, 
            however, opening the gates just 2 hours earlier in the 
            morning (``flex'' hours), and perhaps another hour in the 
            afternoon, would help immensely.

  b.  Stagger lunch hours rather than completely shut down terminals/
            cranes/gates in the middle of the day.

  c.  Street turns--various methods. For instance, truck hauling an 
            import container out of the terminal, after dropping 
            container and chassis at importer DC or other location, 
            either hooks up a container (full or empty) and returns to 
            the marine terminal. Alternatively, after dropping the 
            import container, proceeds to an exporters facility to hook 
            up a loaded export container and returns to the terminal. 
            This reduces congestion and cost and trucking shortages, by 
            converting two round trips, to just one round trip.

  d.  Earliest Return Date: At West Coast ports follow example of many 
            East Coast ports where the ERD is `frozen', meaning no 
            demurrage charge assessed against the shipper if the ERD 
            changes. Further, carriers/terminals must allow sufficient 
            time for the shipper to collect a container from the 
            terminal, and then unload/load it, and return it to the 
            terminal. Currently carriers are providing as little 12 
            hours!

  e.  Set aside Saturdays and Sundays for dedicated removal of 
            containers of the largest volume (number of containers to 
            be determined) importers, from the terminals. Those 
            importers (or the ocean carriers) who arrived those 
            containers, to pay for the terminal operations (longshore 
            labor) on those days.

  f.  Peel-off piles--to expedite the unloading and evacuation of 
            containers from marine terminals. This requires planning 
            and information sharing by the foreign shipper, the 
            carrier, the marine terminal here, the importer, and the 
            truckers.

  g.  Automate all or at least some marine terminal operations. Install 
            the automation that is operating at major ports globally.

  h.  Suspend the PierPass appointment system, which is not working as 
            intended

  i.  Suspend marine terminals' dual transaction requirements for 
            trucks at marine terminals

  j.  If a trucker shows up for a container and it is not available, 
            the terminal must pay $500 for a truck not used.

  k.  If the terminal takes more than 2 hours to turn a truck inside 
            the terminal then the terminal must pay $100/hour or part 
            thereof.

  l.  If a carrier refuses to take back an empty, or a booked loaded 
            export container, then the carrier must pay a penalty of 
            $500 for each violation

  m.  If a carrier requires a trucker to go to a different facility to 
            either drop an empty or pick up a chassis, the carrier will 
            have to pay a charge of $500. per violation

  n.  As appropriate, move homeless encampments that interfere with 
            truck access to the marine terminals.

  o.  Terminal congestion caused by `box rules'--see Chassis section

  p.  Determine if carrier practices to provide certain champion 
            account importers lengthy ``free time'' (which means no 
            detention or demurrage charges), and generous chassis 
            terms, reduces their incentive to remove their containers 
            off the terminals. (Compare to small/medium importers who 
            get only 2, 3 or 4 days free time, no waiver of demurrage/
            detention). Similarly, if carriers pass port authority-
            imposed container dwell fees onto some shippers, but not 
            others, does this constitute a Shipping Act violation?

  q.  West Coast Labor Agreement Uncertainty. As always, the 
            approaching expiration of the PMA-ILWU contract (July 2022) 
            creates uncertainty. At this time of extreme stress on the 
            supply chain, perhaps PMA and ILWU could alleviate (or 
            delay) the uncertainty by early agreement to extend the 
            current contract another year.
2. Additional Land/Warehousing--Near Ports and Inland
    West Coast marine container terminals abut densely populated 
cities, with minimal room for expansion (in contrast to East and Gulf 
Coast ports with ample acreage to expand container capacity). So when 
cargo volume surges, or congestion slows the ability to evacuate 
containers from the terminals, west coast terminals can be (and 
currently are) overwhelmed. As the containers crowd the terminals, 
productivity drops. Thus the urgent need to find `space' for 
containers, off the terminals.

  a.  On the terminals: Level set free time at the terminal for all 
            importers and exporters, to create equal incentives to 
            expedite removal of containers, and make space to work the 
            terminals. See item 3.p. above.

  b.  Container storage close to marine terminals:

      i.  Immediately acquire land near ports for storing shipping 
            containers and 
                logistics. Expedite permitting or re-zoning that is 
            necessary for land ac-
                quisition.

      ii.  As per City of Long Beach, allow higher stacking of 
            containers.

      iii.  Find and improve (only as essential) unused lots in the 
            vicinity of the 
                marine terminals, where containers can be temporarily 
            stacked.

      iv.  To expand inventory of local container sites, cities in the 
            port areas 
                should amend or suspend local zoning/land use 
            restrictions in order to 
                provide land for excess container storage near the 
            ports.

      v.  CA state agencies should aggressively find land to 
            temporarily store cargo 
                and to expedite leasing on state-owned land.

      vi.  Increase the number of employees at warehouses that are 
            holding agri-
                cultural products through Federal incentive programs 
            for employment.

  c.  Space within 2 hours of marine terminals: Develop inland 
            terminals, even if just rudimentary truck and storage 
            yards, within 1 or 2 hours of the ports. A California 
            example is ``French Camp'', in the Central Valley, serving 
            as a container yard to which containers can be removed from 
            Oakland marine terminal, and serving Central Valley 
            destined and originating cargo. Investments in these rural 
            areas will create additional jobs and economic activity.

  d.  Inland Ports: Ports on the east coast have multiple `inland 
            ports' where cargo can be brought, loaded on train, and 
            moved 100 to 200 miles to the ports, and enter the marine 
            terminals, thus avoiding and reducing truck congestion at 
            the marine terminal gates. Loaded import containers can be 
            brought back to these inland load points as well. But there 
            are no such facilities at U.S. West Coast ports. Some sites 
            have been identified in the Central Valley, which could 
            create economic activity and employment opportunities for 
            Rural America. CA state and local agencies must facilitate 
            streamlined approval and implementation of these 
            facilities.
3. Trucking Costs and Truck Driver Shortage
  a.  Nationally: Increase our restrictive national uniform truck 
            weight limits (lowest in the world) to the global standard 
            (adopt the Canadian model, currently in place in various 
            states, including WA, OR, ID, etc.

  b.  California Truck Weights: CA truck weight limit (80,000 lbs GVW) 
            is lowest in the U.S., should adopt weights long in place 
            on designated freight corridors in other states (105,500 
            lbs GVW with extra axle). Current restrictions mean that 
            cargo requiring two trucks throughout the world, require 
            three trucks in California, adding to congestion, truck and 
            driver shortages. While such weight increase to the global 
            standard is urgently needed nationally, increasing weight 
            limits on certain CA truck corridors, as proposed by 
            Governor Newsom recently, is most urgent at this moment; 
            this would be immensely effective in reducing the number of 
            trucks on the roads, reducing congestion, limiting the 
            truck driver shortage.

  c.  Washington and California. Modest increase in two-axle trucks 
            would reduce truck, chassis and driver shortages.

  d.  Immediately reduce age for eligibility for training and testing 
            for Commercial Driver Licenses, to 18 years. Currently 21 
            years and above. This will increase the number of drivers, 
            lower the average age of the aging trucker driver pool.

  e.  Allow for those in the U.S. Military who are trained to operate 
            large equipment to qualify for their CDL. Since they are 
            qualified to operate large machinery in the U.S. Military 
            they should be well trained and qualified to operate trucks 
            and should qualify for a streamlined process to receive 
            their CDL.

  f.  Delay or Suspend U.S. DOT Restrictive Rules for CDL, to be 
            effective Feb. 7, 2022 which will further reduce truck 
            driver supply.

  g.  Extend Hours of Service: for draymen, either a set number of 
            hours per day or a formula based on when they get on line 
            outside the terminal until they are outgated (perhaps 1 
            hour extra HOS for every 2 hours of waiting). For over-the-
            road truck drivers, consider modest adjustments to the HOS 
            formula to increase efficiency, and increase safety.

  h.  Terminals must pay for the trucking cost if trucker arrives 
            timely for marine terminal appointment, but the container 
            is not available.

  i.  Carrier must pay trucker if it refuses to accept an empty 
            container return, or if it requires the trucker to take the 
            empty container to a location different from where the 
            container was picked up for the same carrier.

  j.  CA Air Resources Board requirements on drayage trucks are 
            uncertain, mandating technology that is either non-existent 
            or unaffordable, imposing uncertainty and hesitation to 
            invest in increased trucking capacity.

  k.  For safety and unhindered cargo movement, remove the homeless 
            encampments which are in and around goods movement 
            corridors. This is a safety risk for the homeless in those 
            areas.
4. Information/Transparency of the Supply Chain Investment
  a.  Single Real-Time Data Portal: Create a single data portal that 
            tracks cargo movement shipping availability; trucking wait 
            time; terminal appointments and gate operations, cargo cut, 
            equipment location and availability, etc., to allow better 
            business operations and logistics. Mandate participation by 
            all port stakeholders--particularly the marine terminals, 
            ocean carriers, chassis providers. Start with one portal 
            for the entire LA/Long Beach port complex, then expand to a 
            . . . .

  b.  National Supply Chain Data Portal, to include all ports and 
            inland rail ramps.

  k.  Ocean carriers should report to port authorities within 1 day of 
            leaving and arriving at all U.S. container ports the 
            accurate number of loaded export containers, empty export 
            containers, and import containers. All U.S. container ports 
            should provide such total numbers to the FMC on at least a 
            monthly basis, and published.
5. Rail Service for Ag Access to Marine Terminals
    Note: Rail service is critical to the movement of agriculture 
exports from locations, distant from the coasts, where much agriculture 
is grown and processed. Efficient on-dock rail and near-terminal 
transload facilities are vital for ag exports. Congestion and service 
shortcomings at inland rail ramps directly impact coastal marine 
terminal operations. The following is not intended to be comprehensive 
inventory of rail supply chain matters, but rather, focused on some of 
the most apparent factors determining ag access to the coastal 
terminals.

  a.  Inland rail terminals should seek adjacent space for storing 
            containers short-term from nearby communities.

  b.  Inland rail terminals should expand operating hours and, as with 
            port terminals, start to ramp up to 24/7 hours of operation 
            with incentives for off-hours use to truckers and BCO's.

  c.  Railroads should identify possible additional container storage 
            and intermodal service at other rail terminals that are 
            currently little or non-used for container service.

  d.  Railroads should participate in the individual port central data 
            portals, and in the National Supply Chain Data Portal.

  e.  Railroads should work with port authorities to develop or expand 
            inland load facilities (AKA `inland ports') serving the 
            coastal ports.

  f.  Railroads, at their inland rail ramps, should not enforce or 
            apply ocean carrier restrictions on chassis choice.
6. Chassis Shortage
  a.  Additional land will allow for empty containers to be moved and 
            stored, freeing up chassis for use.

  b.  Remove trade barriers that increase costs of chassis being 
            exported to the U.S.; and/or stimulate U.S. manufacturing 
            of chassis for U.S. ports.

  c.  Ocean carriers should provide chassis at the same cost, and set 
            ``free time'' (no detention or demurrage) for their 
            champion account importers at same terms as they do to 
            smaller/medium importers, to assure all importers have 
            equal incentive to get containers off chassis and off 
            terminals.

  d.  Any available chassis should be eligible to carry any container. 
            End ``box rules'': some ocean carriers require their 
            containers to be carried only on chassis owned by a 
            particular company. When that company's chassis are not 
            available, even if those of other brands are idle nearby or 
            if the trucker has his own chassis, the trucker must drive 
            around to find the `right' chassis. Until then the 
            container can sit on the ground.
7. Ocean Carrier Practices; Federal Maritime Commission Enforcement
  a.  Mandate carriers provide their shipper customers, terminals, 
            truckers with accurate data of arrival times, loading 
            windows, cargo cut, container return dates (ERD) and 
            continuously update (as airlines do for their flights).

  b.  Mandate carriers contribute all necessary data to each port's 
            central data portal

  c.  Incentives for export carriage (vs. mandate); could include non-
            monetary options like preferred berthing access (first-in-
            line status) for carriers agreeing to increase export 
            carriage

  d.  International ocean carriers, should be required to carry our 
            U.S. exports (as long as they can be loaded/carried safely, 
            and tendered timely, and are destined for the ports to 
            which the carrier is already scheduled to arrive).

  e.  Establish at the FMC a shipper advocate to resolve disputes 
            between a carrier or terminal and the U.S. exporter or 
            importer.

  f.  Prohibit ocean carriers from ``marking up'' marine terminal 
            demurrage charges as set forth in their published tariffs. 
            Typically, the marine terminals' demurrage ranges from $20/
            day to $40/day. But the carriers add another $100 to $200/
            day, then invoice the BCO.

  g.  Enforce the Federal Maritime Commission's Interpretive Rule on 
            Detention and Demurrage, which declares many current 
            charges to be ``unreasonable'' (and thus a violation of the 
            Ocean Shipping Act), as they are imposed even when the 
            container is not available to the importer, exporter, 
            trucker.

  h.  Require carriers to certify compliance with the FMC D & D Rule as 
            a condition to invoicing a shipper for such charges.

  i.  Provide informal mechanism at the FMC allowing a shipper who is 
            unfairly charged D & D or any fee by an ocean carrier, to 
            submit the charge to the FMC (informally, without lawyers); 
            the FMC will investigate, and if finding failure by carrier 
            to comply with the D & D Rule, order waiver or refund of 
            the charges, and as appropriate, impose Shipping Act 
            penalties.

  j.  Prohibit ocean carriers from imposing D&D or other charges on 3rd 
            parties with whom they have no contractual relationship--
            freight forwarders, customs brokers, truckers.

  k.  Prohibit demurrage or detention charges when a container is being 
            held by a government agency for inspection or other purpose

  l.  Earliest Return Date--reasonable notice: carriers must provide 
            accurate ERD, may not charge detention/demurrage when the 
            carrier changes it.
8. Creating a Competitive Marketplace
    The Justice Department should assess if the current structure of 
ocean container shipping services is limiting competition (facilitating 
freight rate increases and control of capacity).
9. USDA and CBP Contribution to Increased Export/Import Cargo Fluidity
  a.  USDA Inspection Services (APHIS, AMS, FSIS, etc.)--due to long 
            delays of product leaving the port allow for inspections 
            and associated documentation to allow for those delays. 
            Having to re-inspect product, after an initial inspection 
            and approval for shipment, causes additional delays that 
            are unnecessary.

  b.  Expanded CBP/APHIS hours of operations to prevent inspection/exam 
            bottlenecks and impeded increased port hour operational 
            success

  c.  CBP should review its import enforcement and facilitation 
            processes, including for instance, policies relating to 
            ``holds'', intensive exams, advance import cargo data 
            sharing with ports/ terminals, and initiate changes which 
            would increase import fluidity through the terminals and to 
            the importer. CBP should share with Ports the vessel 
            arrival information and container contents it gains through 
            AMS filing, to give the ports and terminals time to plan 
            for container processing prior to the vessel's arrival.
10. Federal Financial Assistance for Agriculture Lost Sales, Transport 
        Costs, Product Damage
  a.  Farmer Payments for Product Loss or Sales as a Result of Port 
            Delays:

      i.  Loss of sales based on previous 2 year export sales.

      ii.  Delayed arrivals at scheduled export destinations.

      iii.  Rotten or lost product arriving at ports of entry. With 
            increased delays 
                of product arriving at ports of entry perishable 
            products arrived rotten or 
                damaged causing customers to seek payment for lost 
            product and sales.

  b.  Transportation Cost Off-set:

      i.  Transportation costs for freight of U.S. products 
            domestically is sky-
                rocketing due to fuel costs and a shortage of truck 
            drivers. This puts U.S. 
                farmers, ranchers and processors at a disadvantage when 
            competing 
                against low-cost imported product; and increases the 
            cost of products for 
                consumers. USDA should prioritize funding to a program 
            that off-sets the 
                sky-rocketing transportation costs for producers.
11. Restoring Port Authority Control over Port Operations
    Port Authorities which control terminal operations and policies can 
operate them in the public interest; several Southeast states are 
``operating ports''. U.S. West Coast ports are ``landlord ports'', 
leasing port property to companies which control terminal operations 
and pricing. If state laws were changed to allow Port Authorities to 
take control over marine terminals, would Port Executive Directors be 
able to take steps to increase terminals' efficiency and more 
reasonable pricing?
Summary
    Each of these 64 ``solutions'' requires a more detailed description 
and discussion of the feasibility, cost, benefits, interests of various 
stakeholders, the short-term and long-term impacts on the supply chain. 
We are glad to discuss, and add others. We encourage private parties 
and/or governments to consider these, add other `solutions', and as 
appropriate, implement.
    Feel free to contact the AgTC team at: [email protected].
Insert 2
          Mr. LaMalfa. You mentioned too that you--was it 70 percent of 
        ships leave the U.S. with empty containers, or in some cases no 
        containers, because they have left them on the dock because 
        they are in a hurry to get back?
          Mr. Durkin. Correct.
          Mr. LaMalfa. Has the 24/7 port order helped to change that 
        situation any?
          * * * * *
          Mr. LaMalfa. So it is not in place yet?
          * * * * *
          Mr. LaMalfa. My time is out, but I would hope the panel, in 
        other questions, would you emphasize what things we could be 
        fixing right now to get results right now in other questions? 
        Thank you.
          * * * * *
          The Chairman. Yes. And if you could provide those in writing 
        back to him, we would appreciate it. Thank you. And now the 
        gentlelady from Louisiana, Ms. Letlow, is recognized for 5 
        minutes.

January 31, 2022

  Hon. Doug LaMalfa,
  United States House of Representatives,
  Washington, D.C.

    Dear Congressman LaMalfa:

    Thank you for participating in the U.S. House of Representatives 
Agriculture Committee on November 3, 2021, regarding The Immediate 
Challenges to our Nation's Food Supply Chain. During your time for 
questions, you noted the significant number of shipping containers 
leaving the U.S. empty and raised a question regarding the impact the 
24/7 port order has had on this dynamic. You also asked the panel for 
their inputs regarding points of emphasis that might achieve quick 
results.
    The Agricultural Retailers Association and GROWMARK appreciate your 
focus on getting America's supply chain functioning in a manner that is 
productive for agriculture and our nation's overall economy.
    Supply chains across the county continue to experience challenges. 
As stated in my written testimony, many of the agricultural products, 
from essential crop inputs used to produce a sustainable supply of food 
to our country's exports, utilize our waterways and ports. Whether 
these products arrive from other countries or originate in America, 
they are an essential contributor to enhanced supply chain resiliency. 
There has been a serious port backlog since early 2021 impacting this 
flow of products.
    Congressman LaMalfa, in your comments you mentioned providing 
flexibility to transportation rules for a period of time to allow for 
supply chains to catch back up. In my written testimony we proposed to 
provide flexibility to weight limits during the non-freezing and 
thawing time periods in our country to allow for more efficient truck 
loads to be delivered with increased weights. We proposed calling this 
effort ``Resupply America''. A practical proposal would be to allow 
increased road weight limits to 88,000 pounds for trucks. The increased 
number of 18-20 year old drivers allowed in a truck driver pilot 
program approved in the infrastructure bill is a start and needs to be 
expanded as soon as reasonable. Flexibility in the Hours of Service 
program, as you suggested, would be a good opportunity to support our 
nation's drivers to help supply chains catch up. Each of these 
proposals, and any others, could be considered in an effort to Resupply 
America.
    We note the 24/7 port order has not been implemented to this point. 
Many other sectors of the supply chain will need to coordinate, have 
more flexibility with current rules, and become more efficient if 
expanded working hours can improve the supply of goods through our 
ports. We continue to feel it is important for the Federal Maritime 
Commission (FMC) to act. FMC should leverage its authority to limit the 
impact of rising demurrage and detentions costs to shippers which 
eventually impact consumers.
    Thank you for cosponsoring and helping the House of Representatives 
pass the Ocean Shipping Reform Act, H.R. 4996. We look forward to 
timely action in the Senate so this proposal can become law as soon as 
possible. We realize it will take a collection of actions to experience 
a recovery in the supply chain in 2022.
            Sincerely,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Rod Wells,
Chief Supply Chain Officer, GROWMARK,
Immediate Past Chairman of the Agriculture Retailers Association.
                                 ______
                                 
                          Submitted Questions
Questions Submitted by Hon. Salud O. Carbajal, a Representative in 
        Congress from California
Response from Jon T. Schwalls, Executive Officer, Southern Valley Fruit 
        and Vegetable, Inc.; on behalf of Georgia Fruit and Vegetable 
        Growers Association
Labor
    Question 1. Back in March, the House passed the Farm Workforce 
Modernization Act of 2021, which I am a cosponsor of.
    I am happy to see that the Georgia Fruit and Vegetable Growers 
Association recently recognized the urgent need to pass this bill, but 
I am concerned that industry groups are not expressing enough support 
for the Senate to prioritize passage.
    What are your biggest challenges finding and retaining labor in the 
fruit- and vegetable-grower, packer, and processor sectors?

    Question 1a. Are there existing Federal policies that could help 
alleviate some of these challenges?
Food Security
    Question 2. Food banks report sustained demand still due to the 
economic hardship from the pandemic, now complicated by their ability 
to feed their community as they are facing many of the same cost 
increases, labor shortages, and other impacts from the supply chain 
crunch.
    What could the USDA do to better support your industry, such as 
incentivizing local procurement or addressing last-mile costs, that 
help take on current supply chain challenges and would also help the 
nation support food banks and reduce food insecurity?
    Answer 1-2. February 14, 2022

    Dear Congressman Carbajal:

    Thank you for this question. There are currently two major 
challenges.
    First, production input costs are increasing at a much higher rate 
than perishable commodity prices. The average perishable commodity 
price increase from the last 2 years is approximately 1.3%. This does 
not align with the significant increase in input costs. Input cost such 
as fertilizers and soil nutrients during the last 2 years has increased 
between 125-300%; the cost of crop protection products increased on 
average by 30%, the cost of farm fuel has increased by more than 100%.
    The input cost increases are not sustainable without an increase in 
consumer pricing. However, low-income families will continue to be 
impacted by price increases to fresh fruits and vegetables. Studies 
show a lack of fresh fruits and vegetables in a child's diet has a 
higher likelihood of diabetes and obesity. With already limited access 
to fresh fruits and vegetables in many areas (exacerbated by the 
pandemic, supply chain logistics, and increased cost) children have 
less access to produce. Increases in input costs will only lead to 
continued increases in food prices.
    The second challenge is the significant shortage of domestic 
workers interested in applying for and taking up seasonal agricultural 
jobs. Consequently, domestic farmers and ranchers are forced to turn to 
the H-2A program to source temporary foreign workers. Southern Valley 
participates in the H-2A Visa work program due to the lack of a 
reliable, willing, and able seasonal farm workforce domestically.
    A survey performed by the National Council of Agricultural 
Employers (NCAE) of all 50 State Workforce Agencies (SWA's) in 2020 
found that of the 97,691 H-2A jobs that were certified in the period 
March 1, 2020, to May 30, 2020, only 337 domestic workers applied for 
the positions.
    As a domestic producer, the H-2A program is very cumbersome and 
extremely costly. In addition to the required wage rate which is 214% 
higher than the Federal minimum wage, it costs an employer 
approximately $4.90 per hour on top of the hourly rate to employ 
workers under the H-2A program. In addition to all the administrative 
costs, H-2A employers are required to provide to H-2A workers free 
housing, meals or kitchen facilities, free transportation to and from 
housing, reimbursement of all travel expenses to and from the U.S. for 
H-2A workers including bus or plane fare, meal costs, visa costs, etc. 
These free benefits are not considered as W-2 wages by the U.S. 
Department of Labor (DOL) when determining wages for H-2A workers.
    As this trend continues, more and more farmers will be forced to 
close or move operations to another country. The ag industry will see 
an increase in bad actors cutting corners to make a profit, thus 
tarnishing the industry's reputation.
    Today, according to USDA, over 60% of the fresh fruit consumed in 
the U.S. and over 35% of the fresh vegetables are imported from our 
foreign competition. Wages in Mexico average $1.50 per hour. Wages in 
Guatemala average $1.75 per hour. Wages in Canada average $9.00 to 
$12.50 per hour. All while the U.S. average for H-2A workers is $15.56 
per hour. This is not sustainable. Therefore, you are more likely to 
find foreign sold in your neighboring San Luis Obispo grocery stores 
over California grown produce. Producers need a foreign labor program 
wage.
    Unfortunately, proposed Federal policies have the ability to create 
more harm than good. For example, the Department of Labor's proposed 
ruling on Adverse Effect Wage Rate for the H-2A program seeks to 
increase the wages of all workers based on any one single duty that a 
worker might perform. Farmworkers performing agricultural duties should 
be paid based on the prevailing wages comparable to other farmworkers. 
We need a common-sense application of this.
    Thank you in advance for your question and leadership on such an 
important issue.
            Respectfully,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Jon T. Schwalls,
Executive Officer,
Southern Valley Fruit and Vegetable, Inc.
Response from Greg Ferrara, President and Chief Executive Officer, 
        National Grocers Association
    Question 1. Would you say the trend towards consolidation in the 
food supply chain has had an impact on grocers, especially the smaller 
ones?

    Question 2. And what can we do to ensure there is still a 
competitive market out there that doesn't lead to more disruptions 
which effects consumers options at stores and prices of items like 
beef?
    Answer 1-2. January 26, 2022

    NGA does believe consolidation in the food supply chain, including 
the significant growth of retail power buyers over the years, has had a 
negative impact on consumers and communities. As these retail power 
buyers have grown in size, their influence over suppliers has also 
grown to the point where they are often able to dictate favorable terms 
from suppliers that other smaller competitors in the marketplace do not 
have access to. Due to the lack of enforcement of antitrust laws, such 
as the Robinson-Patman Act, suppliers are often faced with an 
unwinnable solution; comply with the power buyer demands or risk losing 
their business. As a result, smaller competitors are at a significant 
disadvantage, unable to get access to new products, the best 
promotions, terms, or as we have seen during the pandemic, appropriate 
allocation of product. Unable to remain competitive, we've seen 
communities lose their local supermarket, which has a negative economic 
ripple effect on rural and urban communities. We believe proper 
enforcement of existing antitrust laws, such as the Robinson-Patman 
Act, will go a long way to rebalancing the scales so all competitors 
have a fair shot at winning the customer's business and ensuring all 
consumers have access to the products they need, when they need them.
            Respectfully Submitted,

Greg Ferrara

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