While U.S. exports of milk powders and dry whey products surged in February, other dairy commodities didn’t fare as well. And they all continue to face headwinds in getting to overseas ports.
“U.S. dairy exports, like many other U.S. agricultural products, are delayed leaving the United States as a result of logjams at U.S. and international ports,” said William Loux, director of global trade analysis for the U.S. Dairy Export Council.
There are several factors contributing to the delays, he said.
“First is that consumer demand for goods is very high, particularly in the United States,” he said.
During the pandemic, people aren’t able to go out and spend money on services as easily. So they spend more money on goods, which is driving up international freight rates from Asia to North America, he said.
“Thus, it is highly profitable for container companies to sail from Asia to the United States with expensive consumer goods, but it’s not as profitable for those companies to run agricultural commodities from the U.S. back to Asia,” he said.
As a result, rather than wait for U.S. export product to be loaded, container companies opted to run back empties to Asia, he said.
“This has left U.S. product stuck at the port and exacerbated other underlying issues, such as shipping companies reducing lines pre-pandemic, containers being in short supply globally and labor and equipment shortages at a number of ports,” he said.
“This isn’t to say that product isn’t moving or that it’s unsolvable, but the delays are a headwind on dairy exports,” he said.