The ongoing East Coast and Gulf Coast ports strike could cost agriculture producers $1.1 billion per week as 40% of the containerized exports move through these ports, according to a report from the American Farm Bureau Federation (AFBF).
Agriculture groups have asked President Joe Biden to intervene in the strike between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), warning that it will affect the agriculture economy.
“If port operations are stopped, the impact on the ag supply chain will quickly reverberate
throughout agriculture and not only slow or shutdown operations, but also potentially
lower farmgate prices,” a letter to Biden read from dozens of agriculture groups.
Erin Borror, vice president for economic analysis at the U.S. Meat Export Federation (USMEF), said the strike will significantly impact the U.S. meat and livestock industries.
Borror said 45% of waterborne pork and 30% of waterborne beef exports move through the affected East Coast and Gulf Coast ports, totaling about $100 million in red meat shipments weekly. These ports have handled nearly $3 billion in U.S. red meat exports during the year’s first seven months.
“As we learned from the COVID shipping issues, when there is one disruption in the shipping or in the supply chain, there are ripple or domino effects,” Borror said. “And so we really need to think about the impacts indirectly on all U.S. red meat exports, which were valued at over $11 billion in the first seven months of the year.”
Dan Halstrom, president of USMEF, told Meat+Poultry that while the largest ports for U.S. beef and pork exports are on the West Coast, the East Coast and Gulf Coast ports remain significant. He emphasized that although 30% of exports might sound low, a substantial portion of high-value chilled beef is shipped from the East Coast.
“Redirecting to the West Coast is a potential, very short-term solution, but it’s by no means a long-term solution at all because it’s not just U.S. beef and pork,” Halstrom said.
In addition to the impacts on pork and beef, Daniel Munch, economist for AFBF, said poultry producers will lose market access. According to Munch, nearly 80% of waterborne poultry exports would be at risk, leading to lower prices for producers as they lose critical market access. The Port of Savannah handles nearly 50% of East Coast containerized poultry exports, making it a significant player in the supply chain. The disruption would also affect feed suppliers, particularly those providing corn and soymeal, key ingredients for broiler operations.
The American Feed Industry Association (AFIA) warned of long-term economic consequences, potential disruptions in animal food supplies and rising costs for farmers and pet owners. Prolonged strikes could delay the delivery of critical ingredients like vitamins, minerals, amino acids and micronutrients, threatening animal health and increasing expenses.
“Our industry does not have a choice to provide vital nutrition to farm animals and pets—we have a responsibility,” AFIA President and CEO Constance Cullman said in a statement. “Yet, with reduced access to imports of essential ingredients, packaging materials, equipment or other goods, production of animal food may be limited at best. The animal food industry relies heavily on the interdependence of smooth shipping routes and has spent years building relationships with foreign buyers and sellers, yet overnight, could lose the ability to access or do business with international markets.”
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council asked the Biden administration to intervene in the strike, saying in a statement it would have a devastating effect on dairy farmers. In 2023, over 530,000 20-foot equivalent units of dairy products worth $1.7 billion were shipped through East and Gulf ports, representing 21% of U.S. dairy exports by volume. The ongoing strike threatens $32 million in weekly dairy exports, with further indirect effects as exporters are forced to reroute shipments and contend with increased transportation costs.
“The administration must act now to bring both sides back to the table. The stakes are too high,” said Gregg Doud, president and CEO of NMPF. “This strike puts the livelihoods of American dairy farmers and the strength of our supply chain at risk. The administration needs to step in and end the strike before further damage is done.”
Negotiations ongoing
As of WLJ press time, negotiations between USMX and ILA were ongoing but at an impasse. According to ILA President Harold Daggett, the union is asking for a $5-an-hour raise for each of the six years of the contract, “absolute airtight language” there will not be automation or semi-automation and for container royalties to go to the union.
USMX offered a nearly 50% wage increase on Oct. 1, saying it “exceeds every other recent union settlement while addressing inflation and recognizing the ILA’s hard work to keep the global economy running.”
ILA countered that the wage increase was insufficient because it doesn’t adequately meet the needs of its members, many of whom operate multi-million-dollar equipment for just $20 an hour, barely above minimum wage in some states. Additionally, two-thirds of members are constantly on call with no guaranteed employment, and they only qualify for benefits based on the hours worked in the previous year, leaving them vulnerable during downturns.
Biden emphasized that collective bargaining is the best way for workers to secure fair pay and benefits. He urged USMX, representing foreign-owned carriers, to make a fair offer to the ILA, ensuring workers are compensated appropriately for their contributions. With ocean carriers seeing record profits, some increasing by over 800% since the pandemic, Biden said it’s only fair that workers, who risked their health to keep ports running, receive a significant wage increase.
“It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback,” Biden said. — Charles Wallace, WLJ contributing editor
