November 3, 2022
In October, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) announced plans to hold multiple Farm Bill hearings by year-end. The Senate Committee on Agriculture, Nutrition, and Forestry has only held two listening sessions on Farm Bill issues this year. The current Farm Bill expires in September 2023 and will need to be extended or reauthorized before then.
The Brotherhood of Railroad Signalmen, representing over 10,000 rail workers, has voted to oppose the proposed labor contract negotiated by union representatives and the Biden administration. This comes after The Brotherhood of Maintenance of Way Employees Division (BMWED) of the International Brotherhood of Teamsters, the third largest rail workers’ union in the country, rejected the proposed contract in early October. The deal would have resulted in a 24 percent wage increase for employees over five years. All twelve rail unions must approve the contract to prevent a strike, but there is no immediate threat of a railroad shutdown, with negotiations continuing through November 19. Senator Chuck Grassley (R-IA) has stated that if rail companies and labor unions could not come to terms voluntarily, Congress would be ready to step in to prevent a strike that could cripple an already fragile supply chain.
According to a report published by the U.S. Energy Information Administration (EIA), U.S. stocks of diesel and other distillate fuel oils are at their lowest recorded levels since the EIA started collecting data in 1982. Currently, distillate inventories are 26 million barrels below the ten-year seasonal average for this period, with the East Coast and Midwest facing the worst supply constraints. Various factors are exacerbating the already low supply, including transportation challenges on the Mississippi River, the looming threat of a potential rail strike and the ongoing war in Ukraine. Retail diesel prices are now $1.45 per gallon higher than gasoline, up from 24 cents per gallon a year ago. The shortage is expected to continue until freight movements and manufacturing activity slow down, and supply can rebalance.
Low water levels continue disrupting transportation on the Mississippi River, which transports 92% of U.S. agricultural exports, including 60% of the grain. On October 17, barge companies placed 9-foot barge restrictions on the lower portion of the river. During a regular harvest season, barges are typically loaded to 11 or 12 feet. The drought is expected to cause around $20 billion in losses between shipping delays and increased transportation costs. The White House hosted a meeting last week to discuss the impacts of water levels on shippers and overall transportation and discussed federal dredging efforts, as well as safety concerns on waterway access.
For video, photos and other resources, view Resources.