Potholes in the supply chain

February 24, 2022 | Kriss Nelson

The status of employment, supply and trucker shortage was addressed during a supply chain panel that rounded out the Iowa Soybean Association’s Innovation to Profit Conference held last week.

The session was moderated by Mike Steenhoek, executive director of the Soy Transportation Coalition and featured Mike Ralston, president of the Iowa Association of Business and Industry (IABI); John Latham, president of Latham Hi-Tech Seeds and Kent Craighton, territory manager at Sukup Manufacturing.

“The reality is you don’t notice transportation until you encounter a pothole, and we have encountered a lot of potholes – literally and figuratively – when it comes to our supply chain, particularly over the last year or two,” Steenhoek says.

Here’s a snapshot of the panel discussion:

Question: What does your supply chain look like?

Ralston says the Iowa Association of Business and Industry which advocates for companies and industries, spoke of one specific company’s supply chain issue.

Ralston says it was two years ago they heard from the president of Standard Golf, one of the world’s leaders in their industry that manufactures a wide array of products for golf courses.

They were having issues receiving a product from New York that had recently been shut down.

“We scrambled and worked to find someone else to get it from. Then the carrier who was delivering was shut down,” Ralston says. “This issue became very real to us in a hurry two years ago and it seems that is all we have been dealing with ever since.”

Latham says there is limited workforce availability in Franklin County where Latham Hi-Tech Seeds is located and although their team has had great production and been successful at supplying customers with seed, logistics hasn’t been easy.

“We didn’t have any backup crews to rely on during pandemic outbreaks and the trucker shortage was an issue even before the pandemic,” says Latham.

During his time as American Seed Trade Association President in 2020 and 2021, Latham worked to lobby for truckers, sales managers and seed dealers to be labeled essential workers and keep seed products moving throughout the upper Midwest in time for planting.

“Now entering year three of the pandemic, we continue to work through workforce and trucker shortages and face extended order times with some of our packaging suppliers,” Latham says.

Sukup, located in Sheffield, has been faced with a myriad of supply chain challenges as well.

Although 95% of the supplies are domestically purchased, Craighton says Sukup is a proud supporter of “Made in the USA.”

All Sukup steel is purchased from U.S. steel mills, therefore they are not reliant on imports from foreign countries. However, there are some products and raw materials that are purchased overseas by their suppliers which leads to supply chain issues.

“We have been hit with all those challenges to figure out where we are going to go for different components and different products. We are willing to diversify, have backup suppliers and I think Sukup has handled that quite well,” he says.

There have been some issues for both Sukup and Latham on the outgoing side of their businesses as well.

“I would say the majority of our product leaves by truck and that has been a challenge,” says Craighton. “There is a massive driver shortage across the United States.”

To help with that issue, Sukup Manufacturing purchased property in Manly, 45 minutes north of their Sheffield location.

“We have a rail spur we can offload steel and that has helped us become more efficient to get raw material to the factory,” Craighton says.

Question: Describe the challenge of your company and strategies your company has employed to address this labor shortage issue?

Latham says that although labor in Franklin County is a serious challenge, they are proud of the many tenured employees on their staff, several with 25-plus years of service.

“We strive to develop a culture that rewards hard work and builds strong teams that help each other,” says Latham. “We’ve been fortunate in this area, but still require constant recruitment to keep full staff, especially in the area of logistics.”

To help combat the issue of labor shortages, Latham says their company participates in local and state career fairs, keeps a consistent online recruitment campaign active and partners with other family-owned trucking companies.

Teleworking is also something Latham Seeds takes advantage of.

“While many businesses tried teleworking for the first time during the pandemic, we’ve used this strategy for nearly 15 years to recruit the best talent regardless of where they live,” says Latham. “We’re proud to have some of our staff celebrating 14-plus years contributing talent to our team via telework.”

Although Sukup employees are trained to be able to change jobs to diversify and satisfy production needs, Craighton feels there is an opportunity for high school students.

“We need to do a much better job reaching out to high school students with job opportunities that Sukup can offer with and without a college degree,” Craighton says. “There are so many opportunities at companies like ours we can give them a very good and long career.”

Question: What part of doing business have you been really surprised about?

“I didn’t think we would ever be in a spot we couldn’t hire a trucker,” Latham says. “I would like to see our elected officials invest in training to help recruit talent to this industry.”

Latham says he has heard there is a nationwide shortage of 80,000 truckers and the outlook moving forward seems to be worse and causing significant inflation in all levels of the supply chain.

Steenhoek says there are a lot of regulations that exist that make recruiting more truck drivers difficult.

“It is one thing to say we need more truck drivers, but then you have a regulatory climate that inhibits that,” Steenhoek says.

Another logistics issue that affects Latham’s business is electronic logs.

“Our truckers express frustration, feeling like they are on the clock all the time,” Latham says. “The unnecessary regulation encourages them to go faster which in turn is less safe. There must be a mix of common-sense regulation brought back to the industry.”

Keith Schultes, ISA farmer-member from West Branch, who also serves on his local school board took to the microphone with the concern of younger people missing out on the opportunity to drive truck. He’s hopeful more companies will encourage young people to look into that industry to help with the trucker shortage.

Schultes, who attended the conference with his daughter, Olivia, a member of the ISA Soy Squad, says he was glad he took advantage of attending the panel discussion.

“I appreciate them talking not only about supply issues but the trucker shortages,” Schultes says.

Question: There has been a lot of attention within the soybean world regarding the existence and future prospects of renewable diesel and sustainable aviation fuel being produced and how soybeans would be a significant input for that. The result of that there is going to be an increased demand for the oil component of the soybean.

Latham says there is a lot of opportunity on the oil and protein market for soybeans, but raising those soybeans has to work for the farmer.

“Having a strictly conventional system is difficult with soybeans,” Latham says. “My approach to product selection at Latham Seeds is we must have the best genetics. We can have grain that yields higher oil content, but if that plant doesn’t yield or provide avenues to control weeds, farmers aren’t going to want to plant it.”

---

Back