A shortage of available, ocean-going cargo containers, coupled with rising freight rates, is putting a big-time chokehold on hay exports out of the Pacific Northwest.
“We have customers,” says Rollie Bernth, president of Ward Rugh, Inc., a hay export firm in Ellensburg, Wash. “We just can’t get the hay shipped. It’s creating all kinds of headaches. This is as bad as it has been in years.” (California and Arizona hay market analyst Seth Hoyt of the Hoyt Report notes that there have been container shortages from California ports. However, “it has not the extent of the Pacific Northwest. The ship lines have reduced the number of ships coming into the California ports and this has made it more of a challenge to move hay, particularly timely bookings.”)
The recession in the U.S. economy is the key factor. With fewer imports coming into West Coast ports, there aren’t as many cargo containers available to backhaul U.S. hay to customers in the Pacific Rim. At the same time, to make up for the decrease in shipping volume, companies have been increasing freight rates at a steady clip. “Rates are double what they were last year and just about triple what they were two years ago,” says Bernth.
"The whole (hay export) business is built on the fact that we can ship our products competitively,” adds Mark Anderson, president of Anderson Hay & Grain Co., Inc., another exporting firm based in Ellensburg. “This is a major concern.”
He fears that if the situation doesn’t improve soon, there could be long-term negative consequences for hay export firms in the Pacific Northwest and the entire U.S. hay-growing industry. “We’ve developed a reputation with our customers for being able to produce and deliver high-quality hay. But if this continues, some of those customers may start thinking that the forage supply coming from the West Coast of the U.S. isn’t dependable. That’s something we absolutely don’t want to happen.”
On the upside, Anderson believes freight rates may be approaching the point where shipping firms find it feasible to move containers, either by water or rail, from other areas of the country to the Pacific Northwest. Even so, he says, it will still take a major pickup in the overall U.S. economy to get westbound hay shipments moving again. “The only way we’re going to see export volume pick up is if we have a good balance of imports.”