SALT LAKE CITY—The global connectedness of agricultural trade means international disruptions eventually affect farmers, and the U.S. economy in general.

Terrorist acts against shipping vessels in the Red Sea and low water levels in the Panama Canal are two major obstacles hindering the movement of U.S. agricultural exports. These result in increased shipping costs and delays, influencing market prices and ultimately hurting the farmer’s bottom line.

American Farm Bureau Federation economist Betty Resnick gave farmers a deeper look beyond those headlines last month in a crop market workshop during the annual AFBF convention in Salt Lake City.

Of all the cargo moving through the Panama Canal, 72% is either coming or going from U.S. ports, including homegrown agricultural products like sorghum, soybeans and corn. Canal shipments represent 14% of all U.S. maritime trade. But an ongoing drought lowering canal water levels has slowed traffic by 33%.

“There’s not really a relief in sight until they get more rain,” Resnick said.

Alternate routes greatly increase shipping time and costs. And one is fraught with physical danger.

Dozens of cargo ships have been attacked in the Red Sea by Houthi assailants, nominally in retaliation for the ongoing conflict in Gaza, she said. Despite international action, attacks continue, raising shipping costs.

“Global container costs have gone up 130% between late December and mid-January,” Resnick continued. “Typically, the Red Sea is really a minor route for U.S. agricultural products, but because of issues in the Panama Canal, we’re seeing a much stronger impact.”

Global events also can impact farms in Virginia, said Tony Banks, senior assistant director of agriculture, development and innovation at Virginia Farm Bureau Federation.

“For example, Virginia ships a significant amount of grain and soybean in containers to ports in southeast Asia,” he said. “So, the drought in Panama can make it difficult to ship to Asia, resulting in higher freight costs and perhaps shipping delays for Virginia farm goods. The Red Sea attacks also can raise the cost to ship Virginia grain to Asia due to the scarcity of containers and higher shipping insurance premiums, even if our container ships continue to pass through the Panama Canal.”

Media: Contact Resnick; Bailey Corwine, AFBF media relations at 202-406-3643; or Banks at 804-514-5207.