The American Farm Bureau Federation in a report said it is deeply concerned about the potential impact of a looming U.S. East Coast port strike on American agriculture. This labor dispute between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) could have far-reaching consequences if an agreement is not reached before the contract expires on Sept. 30. Highlights of Farm Bureau’s report:
Impact on agricultural exports:
- The stakes for American farmers and ranchers are incredibly high. In 2023, over 70% of U.S. agricultural exports by value, totaling more than $122 billion, were transported through ocean ports.
- A strike would primarily affect containerized agricultural exports, which make up about 30% of U.S. waterborne agricultural exports by volume.
East Coast ports at risk:
- Approximately 46% of containerized agricultural exports, or 16.6 MMT, depart from East Coast ports.
- Nine major ports account for nearly 94% of all East Coast containerized agricultural exports, with Norfolk and Savannah leading the way.
- Economic Impact: Over a one-week period, the potential value of disrupted containerized agricultural exports is estimated at $318 million.
- Commodities at risk. While bulk grain shipments are largely protected from disruption, several key agricultural products face significant risks:
- Soybeans: 2.67 MMT of soybeans were exported through East Coast ports in containers in 2023, representing 6% of U.S. waterborne soybean exports.
- Poultry: Nearly 80% of waterborne poultry exports could be jeopardized, potentially lowering prices for poultry producers.
- Other products: Hay, cotton, red meat, vegetables, dairy products and edible nuts would also face significant disruptions.
Impact on consumers:
- Over 1.2 MMT of bananas arrive annually at ILA-handled ports, supplying over a fifth of the nation’s supply.
- Nearly 90% of imported cherries, 85% of canned foodstuffs and 82% of hot peppers come through these ports.
- 80% of imported beer, wine, whiskey and scotch, and 60% of rum arrive at East and Gulf coast ports.
Potential solutions and challenges:
While redirecting exports through unaffected West Coast ports could provide some relief, this strategy faces several challenges:
- Infrastructural limitations on how many containers ports can process.
- Increased transportation costs and logistical hurdles for producers farther from West Coast ports.
- Potential vulnerabilities in certain regions lacking access to efficient transportation options.
Bottom line: The report emphasizes that a port strike would create significant backlogs of exports, denying farmers access to higher prices in the world market. This could lead to domestic oversupply, driving down prices for key commodities and further eroding farm profitability. As the agricultural sector braces for potential rising operational costs and supply chain shifts, U.S. farmers find themselves in an increasingly precarious position.
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Ag Web-AFBF
