Infrastructure challenge poses double danger for ag growers
Farmers and agricultural producers have warned for years that domestic freight transportation bottlenecks due to undercapacity and lack of system modernization are harming their ability to compete with overseas producers for customers around the world.
Delays raise the cost of their exports and make it easier for buyers in other countries to seek alternative sources for produce, meat, grains and other products.
Now the lack of U.S. infrastructure investment is becoming a two-edged sword that is threatening U.S. producers' ability to defend their home market from assault by agricultural imports, said Peter Friedmann, who represents import-export intermediaries and agricultural shippers in Washington.
At the same time, infrastructure advances elsewhere and in ocean transit times mean that imported agricultural goods have become a viable alternative, even for seasonal produce.
Friedmann said during the annual conference of the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations in Denver this month that a representative from a major multinational agribusiness communicated that the company is looking at serving the U.S. market with apples from China instead of from the Pacific Northwest. Several years ago China took control of the global supply of apple juice concentrate as the quality of their apples improved to meet distributors’ requirements. Now, the world’s manufacturing center could be the source of the actual apples for U.S. consumers.
The company believes it will be able to deliver applies less expensively to the Southeast, and even places like St. Louis and Houston, using all-water routes, than actively growing them on U.S. soil and shipping them by truck and rail across the country.
“When you can go 7,400 miles from China with fresh reefer apples cheaper and more reliably than you can go just 2,500 miles from our own Pacific Northwest, well, now you see why our country has become a net food importer,” Friedmann said.
Big food producers have continued to invest in land in South America and Australia to grow grapes and other products to meet the public’s demand for these products year round.
Now, the success of that import business combined with the rise in land values for real estate development have led these companies to begin shifting more production and food processing from the United States to foreign sources, Friedmann added after his keynote address.
Friedmann is general counsel for the PCC and executive director of the Agriculture Transportation Coalition.
Both organizations have joined other groups in calling on the federal government to fund and coordinate planning for road, rail, port and waterway projects.