DUES DOLLARS AT WORK
SUPPLY CHAIN CHALLENGES CONTINUE TO PLAGUE CATTLE PRODUCERS by CCA Vice President of Government Affairs Kirk Wilbur Supply chain disruptions are nothing new for the livestock industry. Even before the global COVID-19 pandemic made supply chain concerns an ever-present reality for American consumers, cattle producers had contended with a bottleneck caused by a fire at a Holcomb, Kan., beef processing plant in mid-2019. During pandemic lockdowns, CCA and our national partners worked tirelessly to minimize disruptions in the supply chains impacting cattle and beef production. Few would have anticipated in early 2020 that these disruptions would persist more than two years into the pandemic, but lingering labor shortages – combined with unforeseen natural disasters and the effects of government policy – have ensured these bottlenecks persist. CCA continues to work tirelessly to limit the impacts of these disruptions at our ports and over our railways and highways. Below are details of some of the Association’s latest efforts. Railway Delays Disrupt Availability of Livestock Feed In recent months, there have been signifi cant delays in railway deliveries of grain to California, causing significant disruption to the feeder sector of the industry. The delays have been driven in part by several extreme weather events and labor shortages impacting railroads. Citing rail congestion caused by high wind events throughout the Southwest and flash flooding from monsoonal rains in New Mexico, BNSF Railway Company on June 23 implemented a service embargo on agricultural commodities “moving to destinations in California.” While BNSF’s embargo on agricultural commodities was scheduled to expire at the end of July, the railway company on July 26 noted that it was seeking “to improve the congestion in California by continuing the embargo into August.” On June 15, one California feedyard operator was forced to petition the Surface Transportation Board (STB) for an emergency service order requiring Union Pacific Railroad to prioritize shipments of corn from the Midwest to California to be processed into cornmeal for livestock feed. On June 17, the STB issued the emergency service order. These prominent examples are by no means the full extent of railway disruptions, however. In the second quarter of 2022, 204,000 grain car orders were delayed or unfilled – a 231 percent increase over the same period in 2021. Of those 204,000 orders, 140,000 were delayed by 11 or more days. As a result of these supply chain disruptions, cattle feeders have come within days or even mere hours of being short of feed for their livestock and have been forced to scramble to avoid catastrophic feed disruptions. Further disruption of rail deliveries was avoided on July 8 California Cattleman September 2022
15, when President Biden staved off a railway labor strike by establishing a Presidential Emergency Board (PEB) – as authorized by the Railway Labor Act, which governs collective bargaining for the rail industry – to develop recommendations to settle ongoing labor disputes between railway carriers and labor unions. The PEB has 30 days to offer such recommendation. CCA has been deeply engaged in addressing the rail disruptions – among other supply chain bottlenecks – in recent months. First, the Association has been in regular contact with California Secretary of Agriculture Karen Ross and senior staff at the California Department of Food and Agriculture to brief them about supply chain disruptions and enlist the agency’s support in addressing disruptions on the state and federal levels. Additionally, CCA has been working alongside the National Grain and Feed Association and several other stakeholders comprising the Agricultural Transportation Working Group to seek lasting solutions to railway disruptions. For instance, CCA and the Working Group had called on the Biden Administration to establish a PEB to avoid a railway labor strike which would have wrought havoc in the supply chain. Additionally, the Working Group has been working to support the Freight Rail Shipping Fair Market Act, which would increase the reliability of freight rail service. The Act would reauthorize the STB, whose most recent reauthorization expired nearly two years ago. Among other provisions, the Act would require the STB to develop by regulation minimum service delivery standards for each commodity, and to dictate available remedies when those standards are not met by a railway company. The Act would also require contracts between railroads and shippers to specify service delivery standards and remedies. While the Freight Rail Shipping Fair Market Act has not yet been formally introduced in Congress as of press time, draft language has been circulated by Peter DeFazio (D-OR), the Chairman of the House Transportation and Infrastructure Committee. While it is likely that the legislation will not be fully considered until the 118th Congress gavels in next January, CCA has reached out to members of the California Congressional Delegation who sit on the Transportation and Infrastructure Committee to urge their support for the legislation. CCA Enables Greater NCBA Engagement As CCA has worked to avoid disruptions in freight rail deliveries throughout the year, our partners at the National Cattlemen’s Beef Association have sought to be an ally in ...CONTINUED ON PAGE 10