Port Fees Loom Over U.S. Ag Exports as Women in Agribusiness Leaders Gather

Hundreds of women gathered in Orlando for the Women in Agribusiness Summit. Agri-Pulse Newsmakers spoke with Alejandra Castillo from the North American Export Grain Association about how the ag sector could be affected by port fees set to go into effect Oct. 14.

Polly Ruhland with FTI Consulting was asked about the shifting dynamic between food producers and consumers, and Maria McWhorter from Kynetec discussed farmers’ views of the farm economy.

Sara Neagu-Reed was awarded the Women in Agribusiness Demeter Award of Excellence at the event. She discussed how her upbringing in Oakland, California, and roots in Romania have guided her career.

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Lydia Johnson: Welcome to Agri-Pulse Newsmakers, where we aim to bring you to the heart of ag policy. I’m your host, Lydia Johnson. This week, we’re bringing you a special edition of the show from the Women in Agribusiness Summit. Hundreds of ag industry leaders gathered in Orlando for educational sessions, focus on policy developments, the farm economy and innovations in the ag sector. Attendees also joined farm tours, discussed opportunities for the industry, and engaged in networking with other female leaders.

Alejandra Castillo, President and CEO of the North American Export Grain Association

Lydia Johnson: To begin, foreign shipbuilding port fees are set to go into effect this fall. We asked Alejandra Castillo, the president and CEO of the North American Export Grain Association, about the issue.

Alejandra Castillo: Yeah, this is an incredibly big topic for the export industry, right. So for us, as we approach Implementation Day, which is on Oct. 14th, really having some clarity around how this will be assessed, how will they be implemented, you know, particularly which types of vessels are actually going to be affected? Because right now we’ve got two main, divisions or two main pillars. So, there is Chinese-owned vessels, and then there is Chinese-operated and -owned vessels. And so that distinction of how they will be treated and assessed once they arrived at port, that’s clarification number one. There’s still some clarification questions on the tonnage. So the current exemptions allowed for vessels that are 80,000 a deadweight or less to be exempted from the ruling. But we know that a good portion of the new vessel fleet of Councilor Maxes, which are slightly bigger than 80,000 deadweight, may not be exempted. So, if we see a lot of those ships right now coming into the ports, how will they be treated? What kind of fees will be assessed? And then what constitutes an empty or in-ballast vessel? Right. Do they come empty at the first port? But they have to load cargo on a second port. Will they be treated as non-empty on not on ballast. And so there’s a lot of technical questions on how will this be actually done on the day of that. It’s very critical for the exporter industry to know. I can tell you right now, we’re starting to see an increase in premium of freight, start to happen. So it’s becoming more expensive to book freight for the U.S. right now, which obviously impacts our ability to forecast and make sales and put sales on the books because we don’t have vessels coming in.

Lydia Johnson: And, you know, I’m curious, a lot of unanswered questions as we look to that deadline. But I’m curious, you know, first, how many Chinese-built ships are there really? And how many U.S. products or products in general could this affect in transport?

Alejandra Castillo: We don’t have a firm number of how many Chinese ships are out there, but we do know in the global fleet, China, participates — about 50% of the vessels that are in China in the in the available fleet are Chinese owned. Right. But we also know that we have Japanese and Korean, vessels coming in on a good year. What we are unsure of is, are the new vessels that are coming into the market. How many of those are Chinese owned or are owned by another party? Foreign sorghum, soybeans, derivatives of both of these, commodities are all ship in both vessels. Right. So, I would say about in terms of all of agriculture, but really comprises over 50% of what gets shipped out of the U.S. is done on vessel.

Lydia Johnson: And, you know, will U.S. producers eventually bear the brunt of this or how does that cost get passed along the supply chain?

Alejandra Castillo: Yeah, I mean, that’s what we are assuming, right? It is safe to assume that any fees that are assessed, and I would add any tariffs that are assessed on a product eventually need to go somewhere. And the most logical place that it will go or trickle down is into the farm gate. Right. That farm gate prices will be affected by this. I think it’s still early to say, to be able to even guesstimate what that impact will be. And that’s why Oct. 14th is going to be important to start tracking this.

Lydia Johnson: And trade, you know, broadly can be seen kind of as a relational, action as well. Yeah. I’m curious with these tariffs in place and the threat of them and just the actions of we’ve seen from this administration so far this year alone, you know, how could relationships with U.S. trading partners change in the future?

Alejandra Castillo: You know, the U.S., one of our standards in export is that we are the most reliable supplier out there. And I would have to say that we’re starting to see some questions on that, right? Our ability to be able to meet the demands of, of the market, not in terms of supply, but in terms of the ability to actually enforce that, that’s been that’s been put into question at times. And I feel like right now, you know, in trade, everything is based on relationships, is based on our ability to get to know our customers and our customers, to get to know us and depend on us to supply them with what they need in a timely way, in an efficient way, in a safe way. And that’s something that has taken the market years to build.

Lydia Johnson: I’m curious on Brazil as well, you know, how does Brazil play into this global trade conversation, and are they benefiting from the trade tensions that the U.S. has more so created?

Alejandra Castillo: Yeah. Today’s first speaker at the Women in AG Summit talked about the fact that, we have no sales, in the books for the 25-26, soybean crop from the, from the United States and all the sales that are coming out to China are Brazilian. And so is Brazil being benefited by the current trade, environment? Absolutely. It’s going to be interesting, though. If you consider the fact that the United States continues to have robust crop production. Our corn production this year alone is breaking records. That’s we’ve been breaking records in form for production for the last three years. Soybeans continues to be a big crop, too, so we’re not insignificant market contributors in terms of production. I think where we are really seeing a changing of the dynamics is in the environment of trade and trade policy.

Sara Neagu-Reed, Director of Production and Environmental Policy at the International Fresh Produce Association

Lydia Johnson: Sara Neagu-Reed is director of production and environmental policy at the International Fresh Produce Association, and a recipient of the Women and Agribusiness Demeter Award of Excellence. We asked her what it means to be nominated and now selected, receive the award.

Sara Neagu-Reed: Well, like I said on stage, it felt like winning the Oscar in agriculture. It’s a very prestigious award that I think these days is very important to people in Washington, D.C., working on behalf of the farmers. So, my line of work. It feels good to be seen. As you know, things move very, very slowly in D.C. There are issues like ag workforce reform that we’ve been working on for 30 plus years with no resolution. So, it’s just a steady pace. But it’s hard to deliver good news all the time. And sometimes I think, you know, as a female in our industry too, I feel a little insecure because I don’t have big wins, even if I’m doing things behind the scenes that are checking boxes and making progress. So, to have people in our industry recognize my work ethic and, you know, my piece in trying to move issues like ag workforce reform forward or farm bill, it’s it means a lot, and it feels really good. And I think we all need to feel good these days.

Lydia Johnson: Tell us a little bit about your background. I mean, how did you get into policy and how did you make your way to D.C.?

Sara Neagu-Reed: Yeah. Sure thing. So, I get the question all the time. Where are you from? Oakland, California, as you know, very urban city center. Not much, you know, agriculture production happening there. But I grew up with the storytelling of agriculture. See, my parents came here from Romania. They used to be farmers there, but due to communism, they lost their land. So, that was a third-generation dairy operation and a second-generation tomato production operation. And they felt they had no choice. There were being persecuted and moved out west couldn’t afford any sort of acreage. So, you know, I call my dad the biggest urban ag grower I know because he started his little garden in our backyard. He raised some chickens in Oakland, but aside from that, it was always the story about appreciating the growers, understanding where our food comes from and how hard it is to get it to our table, to the grocery store. And that has instilled a passion in me, almost a purpose, not to sound cheesy, and that’s what drove me to lean into agriculture policy, to work for a member of Congress where I said, I want the ag portfolio, I want the immigration portfolio to pivot and work at the U.S. Department of Agriculture and work on organic production, things that really meant a lot to me and to be where I am now, you know, full circle back to specialty crops that were my storytelling comes from my background, being from California, working on issues that impact, yeah, it feels like it’s always been my plan.

Lydia Johnson: And I guess as you look at some of those issues, you’ve gotten to work on, a lot of them tie back to your roots, but I guess specifically mentioned organic and ag labor reform. How have you seen those issues? Did you choose those issues originally to dive deeper into? And how have you seen them change and develop over your career?

Sara Neagu-Reed: It’s almost like they go hand in hand because as you probably know, organic production is way more labor intensive, so they’re going to be way more reliant. But regardless, it’s across the board. A difficult challenge, with organic. My little brother actually was diagnosed with leukemia when he was four years old, and my mom went into the cupboard and she threw everything out. And she decided and was very intentionan that she wanted to adopt the organic-only consumption policy in our household. Now, this was in the mid 90s when the National Organic Program had just been sort of stood up. So, it was in the infancy stages. Imagine how hard it is trying to find organic produce. So, she made it a big part of our lives and my childhood to understand, what’s in our food, you know, what consumption meant to her. And organic was it? So for me, it’s almost like I sort of took that on. And as an adult, you know, just continued trying to ensure that those individuals who are growing organic products were a part of the organic supply chain are taken care of. And I’m lucky to be able to facilitate that now at IFPA, whether it’s for retailers who carry organic products or the growers like in California who are growing organic produce.

Lydia Johnson: It’s so cool to see your story in your background kind of bleed into your work and what you do every day. I’m curious, we have lots of women watching the show and, other producers that might come to D.C. to advocate for policy or policy makers that could be watching as well. And what’s your advice for them to get involved and to continue to make headway in the ag policy space?

Sara Neagu-Reed: Yeah. Well, we need everyone. We need every single story. I was just sitting at a table networking with, one of the attendees here who said that she felt — she’s been a couple times to the Women and Agribusiness Summit, but she thought this year it’s so doom and gloom, and she didn’t feel like there was enough actionable items being discussed. And I just looked her straight in the face and I said, come to D.C., call your member of Congress, engage with your Farm Bureau, engage with whatever trade association represents what you are working for, whether it’s an input like a fertilizer or, you know, you’re growing corn. There are opportunities and there are asks. And we were discussing the high input costs right now, and it’s very timely with the economic aid relief discussions going on. So, it’s just about being aware. And sometimes I feel like especially these women here, they’re so hard working. They’re in the weeds that what they do, and they don’t understand that there is something they can activate and be a part of, and that’s the advocacy component of it. And that is joining. And I know it takes time and energy, but it could be something as simple as signing a letter to your member of Congress, forming that relationship, inviting them to your operation.

Polly Ruhland, Senior Managing Director at FTI consulting

Lydia Johnson: The dynamic between food producers and consumers is shifting. We asked Polly Ruhland, senior managing director at FTI consulting, to explain the shifting dynamics.

Polly Ruhland: Yeah, so there’s always been a little bit of an interplay between production and consumers. And what we have to realize is in the food chain, raw cash enters the food chain at one point, and that’s at the consumer point. And material or food enters the chain at the production point. Everywhere in between is either adapting the foods to consumer preference or taking the share of the cash from the consumer dollar. So, there’s going to be a tension throughout the chain between those two ends of the chain. The thing that we have to realize now is the consumer is more aware and more informed about their food and their food production than they ever have been before. And, conversely, food producers are more able to access consumer demands and consumer thoughts more than they ever have been before. And so, consumers are closer to food than they ever have been. So, we have to, in ag, be closer to consumers than we ever have them before. Does that mean we, allow them to dictate, you know, how we do food production? No. And I think that’s the fear of a lot of farmers. But that’s not how the relationship needs to go in the future. It needs to be a symbiotic relationship between food producers and consumers for the health and well-being of the world.

Lydia Johnson: Lets dive into that dynamic a little bit, you know, how do you see cost and quality? What are the, you know, specific drivers of this change and, you know, increased consumer awareness and preferences?

Polly Ruhland: Yeah. So, I think when we’re talking about, how ag is going to move forward into the future, we see, a lot of dynamic changes and those dynamic changes create tensions within themselves. For example, it’s easy for us in ag to see the tension between cost and sustainability, for example. Oftentimes it is the farmer that has to make investments in the sustainability, and those investments are an added cost on the farm. So, it’s not necessarily the factors themselves that have to be examined, but the tensions between the factors. And what elasticity does additional cost on the farm cause in the sustainability sector, or what does additional sustainability investment mean for the pure cost on the farm? And so it’s those gray areas or those elastic areas between the things that we need to accomplish that have to be examined more closely. And that’s what we’re talking about at FTI here at Women and Agribusiness.

Lydia Johnson: And I’m curious maybe thinking about the producers that might be listening. You talk about on farm sustainability, regenerative agriculture, all those things that they’re doing at the farm level. How is that translated into the consumers as a value? The great work that farmers are doing on the ground, how is that translated to the consumer, to the end user?

Polly Ruhland: Well, we have to consider that, I think in two ways. One is that the consumer, again, is the other folks that hold the cash. And so, they have a right to say, here’s what we want to go in our mouths. Here’s what we want to eat from you. At the same time, farmers have the right to say, listen, here’s what we can do on the ground, here’s what the land will allow us to do. Here’s what we need to do to steward the land, consumers. And so that constant understanding between the two sides of the supply chain is what we’re working toward in agriculture. And we have to take the responsibility for outreach, and for understanding on the production side.

Lydia Johnson: I’m curious. We’ve seen the Make America Healthy Again Commission’s second report, now. We’ve seen that movement just pick up steam within the last year. Are you seeing that also, shift consumers values and their preferences at the grocery store?

Polly Ruhland: Yeah. Make America Healthy Again is just the outward sign of a movement that’s much, much older than this administration, than these reports. We’ve seen it come to the surface. We’ve seen it, you know, come to a head politically. But we certainly have seen this movement toward healthy food for a decade. And so, when we think about MAHA itself, we have to be careful not to think of it as just a political movement. We have to think of it as a consumer movement toward making food healthy and understanding the dynamic between food and health and food and disease, for example. And so, when we think about, the relationship between food production and grocery and retail and consumers, understanding how healthy our food is and understanding what part of the supply chain, has a play in making food, quote unquote, unhealthy. And also understanding that moderation is a message that we have to talk about to consumers as well.

Maria McWhorter, Executive Director, Agriculture, North America, Kynetec

Lydia Johnson: We’re looking in the harvest season with many uncertainties about the global trade landscape. We asked Maria McWhorter with Kynetec how farmers are viewing the state of the farm economy right now.

Maria McWhorter: Yeah, so it’s definitely a challenging year. At kinetic, we do survey, tens of thousands of growers every year. This this year is no exception. I still feel farmers are bringing optimism despite the challenging season. We are seeing some trends as far as, more shifts towards use of generic products and private label, really trying to tighten your belt so they can up the volume of products is still up. They still want, strong crop. And we’re actually seeing some upticks in utilizing new technology and new innovations, exploring biologicals, drone use is up quite a bit this year, investment in optical spray and seeing spray from John Deere to a different technology like that. So, we’re still seeing farmers, looking to innovate. And it’s really all about ROI. And, you know, the long term, the long game that they’re playing. That’s farmers. They’re optimistic and they’re always playing the long game.

Lydia Johnson: Playing the long game for sure. And input costs, you know, are squeezing producers that are already in a pretty challenging farm economy. I mean, how are you seeing these high input cost impact producers and what are they saying in these surveys?

Maria McWhorter: Yeah, it’s definitely impacting the bottom line. And I think, one of the things farmers are really looking for is partnership. And they want to be flexible in their purchases and, partnerships with retail and with manufacturers that can really help bring that flexibility are really important for farmers right now.

Lydia Johnson: And, you know, I’m curious, are innovations like biologicals or precision ag technologies this maybe a bright spot for savings, for producers that are spending lots on these input costs right now?

Maria McWhorter: Absolutely. And I think that’s one of the hopes for the future, is that we have a better understanding of things like bio stimulants and some of the different products that can help you better utilize fertilizer. And, you know, I hate to say the word regulation. Sometimes that means red tape and can sound like a bad word to farmers. But I think there is some optimism around, potentially more regulation around these types of products so it can bring clarity. And with clarity can come confidence, so they can use products to really maximize ROI, despite some of the other input challenges,

Lydia Johnson: I’m curious, with all these pressures, the ones we discussed, many that we didn’t discuss, how are you seeing farmers adapt? You know, what trends do you hear about diversification or succession planning is as you talk to producers?

Maria McWhorter: Yeah, I think it’s tough to diversify in some markets — if you’re corn, soybean, cattle, I mean you’re in that market. You just can’t change overnight. But definitely feeling like farmers are more open minded on how the long-term viability of their farm will look. Different roles within the farms. Potentially integrating or, developing different businesses that serve the farms. We’re definitely seeing some changes there. So, I think they’re still in it for the long run, but, open to different ways of succession planning and diversifying the farm.

Lydia Johnson: Thanks for joining us for another episode of Agri-Pulse Newsmakers. Next week, both the House and Senate will be in session. Tune in next week and check our website any time for the latest developments on all things food, farm and fuel policy for agri-pulse. I’m Lydia Johnson. Thanks for watching.

Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.