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Drought and wars worldwide are hurting farmers and agricultural companies in Minnesota


Drought and wars worldwide are hurting farmers and agricultural companies in Minnesota

In a country that exports more than a third of its agricultural production, it is not enough to just observe the local weather: rain patterns in Panama are also important, as are the occasional hail of rockets in the Red Sea.

These global transportation bottlenecks have become bottlenecks, driving up the cost of shipping American grain around the world and putting American farmers at a disadvantage while their competitors are reaping record crops.

“We are seeing a cluster of events that require a response from shipping that has not been seen before,” says James Spear, a shipping expert at SUNY Maritime College, adding that diversions – which involve great effort – are now commonplace.

Years of drought have led to restrictions at the vital Panama Canal, a key passage for transporting cargo to Asia from the Gulf of Mexico, including soybeans grown in Minnesota.

“Competitive access to this market is critical,” said Justin Cauley, senior director of transportation at CHS. “The Panama Canal is a shortcut that saves time, fuel and labor costs. The remaining restrictions do not allow us to allow the largest grain ships possible to pass through it.”

While traffic on the Panama Canal is returning to normal as the drought subsides, another important shortcut on the other side of the world remains plagued with problems.

“There are many companies that avoid the Suez Canal, and CHS is one of them,” Cauley said.

The route between the Mediterranean and the Indian Ocean has seen a significant drop in traffic due to attacks on commercial vessels by the Houthis, a Yemeni Islamic fundamentalist group, in response to the Israeli war in the Gaza Strip.

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