WASHINGTON and ARLINGTON, VA. — The Pet Food Institute (PFI), American Feed Industry Association (AFIA) and National Grain and Feed Association (NGFA) applauded Congress on its passage of legislation to avoid a railroad stoppage, which would harm the economy and the pet food industry.
The associations commended President Biden’s call for Congress to intervene and help prevent a rail strike, which is set to begin this month. PFI also launched an advocacy campaign on its platform to help further outreach between its members and Congress.
On Nov. 30, the House of Representatives passed the bill in a 290-137 vote and on Dec. 1 the Senate passed it in a 80-15 vote. President Biden officially signed the bill into law on Dec. 2. However, commodity trade analysts and industry leaders remain concerned about economic impacts from diminished rail performance.
PFI applauds #Congress for passing legislation to avert a rail strike today. Lawmakers’ quick response to this issue has protected Americans from serious economic impacts of a strike.— Pet Food Institute (@uspetfood) December 1, 2022
In September, Biden reached a tentative railway labor agreement, hours before a strike was set to begin. In October, two out of 12 rail labor unions rejected the agreement, prompting the National Grain and Feed Association (NGFA) and other agricultural groups to send a letter to Congress, urging for swift action.
As of November, four labor unions have rejected Biden’s agreement, and, according to PFI, congressional intervention will be necessary if unions and railroads fail to reach agreements before a “cooling-off” period ends on Dec. 9. After the period, three unions are set to begin a strike.
According to PFI, a rail strike would further worsen inflation and the supply chain for various industries, including pet food, and would also impact consumers. Nearly 40% of the country’s freight is carried via railway, according to PFI, and it is estimated that a strike would cost the economy about $2 billion daily.
“We thank President Biden for encouraging Congress to immediately pass bipartisan legislation enforcing the September agreement,” said Dana Brooks, president and chief executive officer of PFI. “It is critical that Congress intervene now to prevent a rail strike [this] month. Should a rail strike occur, the effects on the pet food industry would be felt immediately. Key ingredients used in pet food products are delivered daily by rail to manufacturing facilities.
“Any disruptions to this supply chain will severely impact the production of pet food for our nation’s dogs and cats,” Brooks added. “The long-term effects for the US economy would be overwhelming, including higher inflation, lack of consumer access to goods and loss of jobs.”
As part of its advocacy campaign, PFI is urging its members to contact their representatives and Congress, urging for further legislative action.
According to the AFIA, the country's railways transport about one quarter of all grain, including soybean oil and meal, dried distillers' grains and other byproducts, which are used to produce animal feed and pet food. US animal feed and pet food processors produce an estimated 284 million tons of high-quality, safe and nutritious products for animals throughout the country.
“No one empathizes with the struggles of maintaining a committed workforce like the US animal food industry, but slowing or stopping the transport of goods via rail threatens the livelihoods of those hardworking Americans well beyond our nation’s tracks,” said Constance Cullman, president and chief executive officer of the AFIA. “We thank Congress and the Biden administration for their leadership in brokering a deal that keeps all trains running on time for the greater good of America and the food and agricultural community.”
According to Mike Seyfert, president and chief executive officer of NGFA, rail networks transport about 1.5 million carloads of grain and 1.4 million loads of grain products, including flour, dried distillers grains, ethonal and soybean oil and meal, for the grain and feed industries.
“NGFA members, which include 1,000 companies that handle US grains and oilseeds, commend Congress for working in a bipartisan manner to avert a national rail shutdown," Seyfert said. "Resilient and reliable rail service is essential to the daily operations of NGFA members and is crucial to a functioning agricultural economy. We thank President Joe Biden, House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell for understanding the urgency required to prevent severe economic damage.
“As an association representing a segment of the agricultural supply chain that directly interfaces with freight railroads, we will continue working with our rail industry partners, the Surface Transportation Board and lawmakers for sensible policy measures that guarantee the strength, stability and reliability of this important transportation system moving forward,” Seyfert added.
Read more about supply chain topics affecting the industry on our Operations page.