Midwest food-grade soybean exporter among those pushing against the tide to resume normal export business
SB&B, a Casselton, North Dakota, agricultural export business which produces, processes and markets non-GMO soybeans, for a year has been sitting on more product than is typical because of a transportation backlog that’s resulted from the coronavirus pandemic. They are among the ag export companies being crippled by the lack of available ocean ships to move U.S. farm products to global markets. Ag exporters are enlisting the help of the federal governments and trade group to try to breakup that backlog
CASSELTON, North Dakota — Sinner Bros. and Bresnahan’s exports of food-grade soybeans — like that of other agricultural commodities across the United States — have been slow going this year.
“This is a monumental problem that we’re all trying to get through, all caused by the pandemic,” said Bob Sinner, SB&B president and one of the company’s founders.
The Casselton-based family-owned export business, which produces, processes and markets non-GMO soybeans, for a year has been sitting on more product than is typical because of a transportation backlog that’s resulted from the coronavirus pandemic.
They are not alone. They are among many ag export companies being crippled by the lack of available ocean ships to move U.S. farm products to global markets. Ag exporters are enlisting the help of the federal governments and trade group to try to breakup that backlog.
“Eighty-five percent of our business is international,” Sinner said.
Sinner learned about the market potential for exporting food grade soybeans about 30 years ago when he chaired the United Soybean Council’s International Promotion Committee. While he was committee chair, Sinner represented about 400 projects in 85 different countries.
“Through your travels, you begin to realize there are opportunities for companies, growers to raise a specific variety, for a specific food,” Sinner said. He discussed with his family the potential for exporting soybeans grown on their farm.
“We’ve always been proud of the quality that our own farm can produce, and said ‘Let’s see what we can do with this,'” Sinner said.
What Sinner and his family eventually did was form SB&B, which now exports non-GMO, Identity Preserved food grade soybeans. The soybeans are grown by about 220 farmers on 70,000 acres in North Dakota, South Dakota, Montana, Minnesota and Wisconsin.
Sinner Bros. and Bresnahan has processing plants in Casselton and in the western Wisconsin town of Bloomer. The North Dakota and Wisconsin plants, together, annually export 3,500 containers, or about 2.5 million bushels, of non-GMO food-grade soybean products.
The miles that separate the farmers who grow the soybeans for SB&B expands the company’s footprint, which makes its soybean production less susceptible to the vagaries of the weather. The drought this year is a classic example of why the company has growers in a four-state region: While the drought reduced yields in North Dakota, Wisconsin farmers produced an above-average crop.
But reducing the risk of weather-related production shortfalls is much less challenging than moving the product from rural North Dakota and Wisconsin towns overseas to main customers in Japan, Thailand and Taiwan.
“We are supplying to about 13 or 14 different markets,” Sinner said. ”They’re all somewhat different. The bulk is Natto — they’re a fermented bean. That market is exploding.”
Other common food-grade soybean products for export are to companies that produce soy milk, tofu, sprouts, miso or soy sauce, or who use them for roasting or process them for general use. Exports of the food grade soybeans, like exports of all U.S. products, were slowed during the height of the pandemic during the spring and summer of 2020.
Meanwhile, imports of manufactured products to the United States also halted. That had an effect on the exports because the same containers are used for imports and exports.
When the imports began picking up again, and consumers started to buy products, the importers were overwhelmed and had to figure out how to catch up, Sinner said.
The solution for ocean carriers was to focus on exporting large companies’ products.
“The demand was so strong, the ocean carriers started talking to companies like ourselves, and said, ‘You know what Bob, we’re not really interested in taking our export box. We don’t want your soybeans. We don’t want to take the units and load them because if I take time to load it, and then it goes back overseas, and I have to give your customer time to unload it, and that just delays us in getting a valuable import back into that container,’” Sinner said.
As of Sept. 15, the backlog of imports included 40 ocean vessels that sat outside the port of Los Angeles-Long Beach waiting to be unloaded, he said. By Sept. 21, that number had grown to 70, according to freightwaves.com.
Once the vessels are unloaded, they will be allocated to large companies. So instead of SS&B receiving 10 or 15 per week, as it did before the pandemic, it only gets two or three, Sinner said.
Meanwhile, there’s also a disparity in the weight of the containers that are imported versus exported, a factor that also has exacerbated the slow movement of agricultural commodities overseas.
“One hundred percent of the containers that come in are not heavy; they’re carrying TVs, electronics and clothing,” Sinner said. “But export containers are heavy. They’re carrying agricultural production products.”
Historically , the ocean vessels leaving the country have been about 25% to 30% empty, but that has grown to 50% to 60% empty since the pandemic, he said.
As the export issues have escalated in the last several months, there has been a commensurate increase of complaints by agricultural companies .
“It’s bordering on illegal because if you read through the International Shipping Act, it basically indicates that carriers have a responsibility to serve the export industry, and it is illegal to decline export business,” he said.
The Specialty Soya and Grain Alliance, a group of U.S. companies that focus on production, processing and shipping of soya and grain products worldwide, which Sinner heads, and other agricultural exporters, have put pressure on the Federal Maritime Commission to address the export situation.
During the past year, the agricultural exporters have written letters and held Zoom meetings with various federal agencies and with the Biden administration, Sinner said.
They have also drafted H.R.4996, which is the Ocean Shipping Reform Act of 2021, which was introduced in August by U.S. Reps. Dusty Johnson, R-South Dakota, and John Garamendi, D-California. The Specialty Soya and Grains Alliance is among the many ag-industry supporters of the bill, which would be the first major update of federal regulations for the global ocean shipping industry since 1998. Johnson and Garamendi say the legislation would support American exports by establishing reciprocal trade opportunities to help reduce the United States’ trade imbalance with China and other countries.
“Foreign ocean carriers aren’t playing fair, and American producers are paying the price,” Johnson said in a statement. “It’s time for updated rules of the road. That’s what our bill does.”
In mid-September, Specialty Soya and Grains Alliance was part of a group of 76 agricultural organizations from across the United States that wrote a letter to the Biden Administration about the need to solve the supply chain problem.
“The ocean shipping crisis is extremely complicated. As goods have begun arriving for the upcoming holiday season in West Coast ports, the situation is becoming even more dire for ag exporters,” said Caroline Stringer, California Fresh Fruit Association trade director. “Port congestion is worsening; containers are in short supply; bookings are more frequently delayed or canceled with little to no notice; when containers do make it onto a vessel, deliveries at the destination are often delayed and sometimes cancelled altogether; in some cases, the cost to ship has doubled or tripled.”
California's growers take great pride in delivering the best tasting fruit to customers across the globe, and to do that, they need reliable ocean transport, Stringer said.
“We’re all having challenges. This is not a North Dakota issue. This is a U.S. agriculture issue,” Sinner said.
He’s proud of the work that SSGA has done to raise awareness about the issue because it affects SB&B, the farmers who grow soybeans for it and the company’s customers.
For example, if farmers begin to harvest the new-crop non-GMO food grade soybeans, it’s imperative that SB&B can move out the old crop, Sinner said. SB&B found storage space in Wisconsin so farmers have somewhere to move the old crop so they have room for the new crop, he said.
It’s also imperative that his company can supply its southeast Asian customers with their products in a timely manner. The companies can’t store inventory because of the high temperatures and high humidity in their countries, and that’s created a major problem for some.
“There have been companies in southeast Asia that had to stop operations because they’re behind. We can’t get it delivered when they need it," Sinner said. “That creates a concern among all of us, because this is food.”
He believes that eventually, the supply chain issues will improve, but when that will be is unclear. For the past year, every few months, the agricultural exporters have been told that the issue would be resolved in a few more months. The latest word is that the system will be log jammed until early 2022.
In the end, agricultural exporters like SB&B can’t do much about the situation, except to continue to do what they’re doing to highlight it, Sinner said.
“These are macro issues, I would say, that are somewhat out of our control," he said. “We just need to keep pushing that we need some resolution to this."