With no labor deal in sight, the agricultural industry is rushing headlong into economic straits due to the International Longshoremen’s Association port strike that began Tuesday, and the effects could be felt across the farming landscape from delayed exports of grain to certain markets and delayed import of inputs, equipment and other items.

The International Longshoremen’s Assn. (IFA), which represents unionized workers at ports on the U.S East and Gulf coasts are on strike for the first time in 47 years. IFA’s contract with U.S. Maritime Alliance (USMX), which represents 40 ocean carriers and terminal operators, expired on Tuesday at midnight. 

More than 50,000 workers at 36 ports along the East Coast and Texas went on strike as they demanded better wages and protections against potential automation efforts by port managers.

In a letter to President Biden’s administration recently, the National Grain and Feed Association highlighted the potential strike, saying such a move would impact supply chain quickly -- shutting down operations and potentially lowering farmgate prices at a time when grain farmers are already suffering.

‘Now is Not the Time’

In a statement Tuesday, Biden said as the nation climbs out of the aftermath of Hurricane Helene, dockworkers would play an essential role in getting communities needed resources. “Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits,” Biden said, adding that his administration would be monitoring for “any price gouging activity that benefits foreign ocean carriers.”

With no-tillers already reeling from low grain prices and a political stalemate over the U.S. Farm Bill, the port strike is more unwelcome news.

About 40% of U.S. containerized agricultural exports move through the East and Gulf Coast ports, the farming groups wrote. Some exports could be shifted to the West Coast, but there may not be capacity to completely absorb the lost volume. This could lead to increased shipping costs that might impact agribusinesses, which would impact farmers, who are already beginning to harvest their crops across the U.S.

American Farm Bureau Federation economist Daniel Munch recently warned the U.S. East Coast port strike would have serious consequences for agriculture in markets with international buyers.

In a blog post he says the most significant disruptions would be felt in containerized agricultural exports, which compose just over 30% of U.S. waterborne agricultural exports by volume. The remaining 70% are raw, unprocessed commodities like grains, oilseeds, pulses, rice and animal feed, “which are typically transported on specialized bulk carriers that are loaded and unloaded at dedicated facilities that often operate with non-ILA unions or independent workforces.”

In addition, the strike will only impact U.S. ports with ILA workers, primarily along the East and Gulf coasts. Notably, about 46% of containerized agricultural exports, or 16.6 million metric tons, depart from East Coast ports.

Of these, nine major ports account for nearly 94% of all East Coast containerized agricultural exports, with Norfolk and Savannah in the top two spots. In total, approximately 14% of all U.S. waterborne agricultural exports, by volume, would be at risk in the event of an ILA strike. Over a one-week period, the potential value of disrupted containerized ag exports is estimated at $318 million.

On the import side, Munch says, containerized products play a much more significant role, representing 73% of all waterborne agricultural imports. The East Coast is crucial for these imports, handling 72% (30 million metric tons) of containerized agricultural imports.

Munch says the top ports for these imports include New York, Philadelphia and Houston, with 11 ports accounting for nearly 90% of all containerized agricultural imports. In total, 53% of U.S. waterborne agricultural imports, by volume, could be affected by an ILA strike, leading to a potential economic impact of over $1.1 billion per week. Collectively, the value of containerized agricultural products passing through ILA-controlled ports, including both imports and exports, exceeds $1.4 billion per week.

The biggest markets that exports would be headed to are China, Indonesia, Vietnam and Taiwan, according to the AFBF.

Significant Backlogs

“Redirecting exports through unaffected West Coast ports can provide relief to both producers and consumers,” Munch wrote. “This strategy is particularly effective for the many products destined for Asia. Retailers and importers of non-agricultural goods have already accelerated shipments in anticipation of strike-related delays, hoping to secure holiday inventory ahead of time.”

Wendy Brannen, a spokeswoman for the American Soybean Association, says the U.S. soybean industry exported 2.7 million metric tons of soy from the impacted terminals in 2023. The direct effects of this situation will disproportionately impact East Coast soybean states and those exporting specialty and food-grade soy via container. The region also exports several products that use soy, such as poultry and pork.

“We anticipate disruptions in the import of farming inputs and farm equipment. Once operations resume, there will be significant backlogs to clear before normal operations can continue,” Brannen says.

Brannen adds that more than 200 organizations, including ASA, will share another letter this week with President Biden warning of the impacts on both the economy and national security — “and the billions of dollars at stake for businesses of all sizes that rely on the free flow of goods. For agriculture specifically, we must get our products out to key overseas markets in a timely manner and be able to receive goods that are needed to sustain our farms and the farm industries we rely on.”

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