A Logistics Expert on the Iran Conflict and Dairy Trade

Weeks into the Iran conflict, the disruption to dairy logistics is becoming more visible.

Shipping dairy to the Middle East used to take 30 to 40 days. Now it can take 60 to 75.

And the longer this conflict lasts, the more pressure it puts on the dairy trade.

In this episode of The Milk Check, host Ted Jacoby III talks with our logistics expert, Tyler Jokerst, Director of Trade Operations, about what all this means for dairy producers, traders and exporters.

In this episode, we cover:

Why Persian Gulf access remains severely limited, and how exporters are responding

How normal 30- to 40-day transit times can stretch to 60 to 75 days

Why alternate routes are creating new choke points

How higher oil prices are raising shipping and trucking costs

Why fertilizer, feed costs and food inflation are becoming part of the conversation

How delayed demand, product displacement and global economic stress could bring more dairy market volatility

Listen to The Milk Check episode 096: A Logistics Expert on the Iran Conflict and Dairy Trade.

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Ask The Milk Check

Ted Jacoby III: Coming up on The Milk Check.

Tyler Jokerst: As this thing progresses, it could prolong it.

Ted Jacoby III: 30 to 40 days of shipping from the East Coast to the Middle East is now 60 to 75.

Welcome to The Milk Check from T.C. Jacoby and Company, your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I'm Ted Jacoby. Let's dive in.

Ted Jacoby III: Today, we have a special guest, Tyler Jokerst, our Director of Trade Operations, and we're asking Tyler to join us 'cause we thought it would be a pretty timely topic to discuss logistics, both international and domestic.

With everything going on in the Middle East, how is that affecting logistics, in terms of global trade for dairy, especially important for U.S. dairy, considering the fact that we're exporting over 20% of our milk production these days? But it's also affecting us domestically. Gas prices are probably up over 30% at this point, which is going to affect costs when we're getting all the dairy products we make to consumers here at home.

So, Tyler, welcome and thanks for joining us.

Tyler Jokerst: Thanks for having me, Ted.

Ted Jacoby III: Tyler, what is going on in the Middle East? How is it affecting logistics? Are we going to be able to get container ships into the Persian Gulf anytime soon? And if not, what are we doing in response to that?

Tyler Jokerst: I think the easy answer is: we don't know, other than there is a war over there. That's the biggest thing right now causing the impact, and the huge leverage point Iran has is the Strait of Hormuz. For that strait, there's a lot of product that goes in and out of there.

Primarily oil, but, yeah, a big part of that is containerized shipments, as well. As we all know, the Middle East is a big purchaser of dairy products as well, right now. And we're seeing a lot of disruption there as far as what we can get in or out of there.

It's almost come to a virtual stop.

Ted Jacoby III: So, they can't get into the Persian Gulf. Are there other options?

Tyler Jokerst: Tomorrow, there might not be. That's the situation we're in right now. Every day is a day-to-day situation. The current workarounds are what the steamship lines are calling landbridges.

So, essentially, you're porting into ports on the other side of Saudi Arabia, where you're not going into the Persian Gulf, and they're either working on truck or train routes. It can get across, over to Riyadh or Dammam.

Ted Jacoby III: So, Dammam is the main container port for Saudi Arabia and the Persian Gulf. What's the port in the Red Sea that we're using now instead?

Tyler Jokerst: King Abdullah is one of 'em. If you go further north, where you're getting into Jordan, you have Jeddah as well. So, there are a couple of different options there. I think the biggest issue tha