Inefficient California port systems cost American farmers billions in lost revenue. Farmers along the West Coast suffered adversity in recent years that included Covid-19 disruptions, wildfires, drought, and supply chain bottlenecks at the country’s busiest ports.
“We are shipping right now less than half of what we should be shipping and could be shipping this time of the year, simply because there’s no equipment available,” Don Barton of Gold River Orchards reportedly said.
Research conducted by agricultural economists at UC Davis and the University of Connecticut point to significant losses. Experts tend to agree that supply chain woes may have caused the worst overall losses. The academic models indicate a 17 percent drop in agricultural exports transported by containers from May through September 2021.
“Since 40 percent of filled shipping containers leaving California’s ports are filled with U.S. agricultural products — around a third of which are from California—California’s farmers experienced significant lost export opportunities,” a UConn Today report states. “By the peak of the disruption in September 2021, there were around 25,000 fewer containers filled with agricultural products leaving California ports than there were in May 2021. Processed tomatoes, rice, wine, and tree nuts saw the sharpest average trade declines.”
The study’s authors estimate the agriculture sector sustained losses upwards of $2.1 billion in export sales during the period. That figure reportedly exceeds the lost revenue from the 2018 U.S.-China trade war.
Exacerbating the situation, demand for imports surged in 2021 and Asian markets sought more empty containers traveling from the U.S. In September, a 40-foot container transported from Shanghai to Los Angeles garnered a $12,000 fee. Returning freight only earned $1,400. This scenario made it more profitable to send empty containers back to Asia for a quick turnaround.
“By September 2021, nearly 80 percent of all containers leaving California ports were empty — about 43 percent fewer filled containers leaving California’s ports than there were prior to the pandemic,” UConn’s Department of Agricultural and Resource Economics reportedly estimated.
UC Davis professor Colin Carter reviewed agricultural items and discovered that some growers experienced more damaging setbacks than others. The Golden State and Southwest orchards are responsible for the bulk of almonds, chestnuts, English walnuts, and Macadamia nuts, among others. At the Port of Oakland, the number of ships that typically pick up nuts reportedly declined from 959 to 679 during the first three-quarters of 2021.
“We calculated California tree nut producers lost about $520 million. This was followed by wine, with a loss of more than $250 million, and rice with about $120 million lost,” professor Carter reportedly said.
Agricultural leaders worry that persistent port inefficiencies will result in Asian markets considering California growers an unreliable resource.