This economic disease is affecting California farmers amid a historic drought that is threatening future harvests in the state.
"We're at the mercy of foreign shipping companies," said Roger Isom, president of the California Cotton Ginners and Growers Association and the Western Agricultural Processors Association.
California is one of the country's main agricultural regions. It is the nation's only supplier of tree nuts such as walnuts, pistachios and almonds. Most of the tree nuts grown here are exported to other countries. According to the California Department of Food and Agriculture, in 2019 the export of tree nuts alone netted the country more than $8.1 billion.
But the heavy congestion at the state's main ports is preventing farmers from being able to send out most of their agricultural products. (Related: Truck driver warns supply chain crisis will not end unless port congestion, labor shortage and other long-term issues are resolved.)
"We're in a game, somebody changed the rules on us, and we have no way to correct it," said Isom.
According to Isom, more than 80 percent of scheduled shipments were canceled last month. Those who were able to get their goods out had to ship their products to other less congested ports.
Many walnut and pistachio growers, for example, had to pay to get their goods on a train either to Texas and Maryland to get shipped out. Many cotton growers booked flights to get bales of cotton directly to Peru where they are processed.
Isom said this method of transporting agricultural produce is very unsustainable, and many are already losing a lot of money on these sales. But they are forced to do it or else they risk losing their customers.
But even if California growers are able to get their shipments out in time, their future remains precarious. According to Isom, many of the state's orders are "now being filled by other countries."
"One of our members lost $7.5 million in one month of sales because of an inability to fill timely commitments," said Isom during a meeting with state lawmakers on Wednesday, Nov. 3, regarding the supply chain crisis.
Farmers all over the state are suffering due to the supply chain crisis
In Northern California, farmer Chris Fedora of Fedora Farms is usually able to sell about 80 percent of his walnuts internationally. This year, he will be lucky to sell half his harvest to the global market.
"The trucking is going to start becoming a little bit of an issue right now," he said.
His main concern is a lack of shipping containers and warehouses for truckers to store his walnuts. "So, it's going to start backing up onto us. And then, if that's the case – if we're totally full – then if we have anything left in the field, we can't bring it in." This would result in a huge loss for him.
If Fedora is unable to sell his products internationally, he will have to find domestic markets willing to buy them.
In Kern County, fourth-generation farmer Jason Giannelli is unable to figure out how to keep doing business, as the supply chain crisis made it unprofitable to keep farming.
"It's not just having an impact on this valley," said Giannelli. "It's having an impact on the state and you're seeing the ripple effects of that."
Giannelli has seen costs go up dramatically over the past few months. "I'm already seeing a 60 percent increase in our cost in the last four, five months," he said.
Like other farmers, Giannelli's main problem is his inability to ship out his goods. "We have to figure out if we want to sell all of our product right now, or can we wait to sell everything, but at the same time it's like, can we get it out?"
Giannelli has been trying to figure out other ways to get his goods out. "You can't get them off to the right destinations, right off the ships," he said. "There is not enough [truck drivers] and where do you put them at?"
While the port congestion, the lack of available warehouse space and the shortage of truck drivers are Giannelli's main concerns right now, he is also looking ahead. He is uncertain about how much he can plant next harvest due to the shortage of fertilizer.
"Can we get fertilizer right now, and can we store it right now?" he asked. "Because we don't know what it's going to be in three months from now, [the price] can jump another 60 percent."
Fruits and nuts are California's fifth-largest export sector, trailing behind electrical and industrial machinery and motor vehicles and automobile parts. California's agricultural exports also make up a significant chunk of the American economy.
In 2020, California's exports alone made up more than 10 percent of all American exports. For agriculture exports, California accounted for 16 percent of all American exports in 2019.
While agriculture sector experts believe Americans are unlikely to experience shortages of walnuts and other tree nuts for now, the future of America's farmers remains uncertain.
Learn more about how the supply chain crisis is affecting America's agricultural sector at Harvest.news.
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