Ag Worries Over Strike, Supply Chains

OMAHA (DTN) -- With a port strike affecting roughly $1.4 billion in agricultural exports weekly, some groups and farm leaders are calling on President Joe Biden and his administration to step in more aggressively to end the strike that has halted supply chains along the East Coast and Gulf of Mexico ports.

The International Longshoremen's Association (ILA) walked off the jobs early Tuesday morning over wages and concerns about automation taking jobs. Carriers are represented by the United States Maritime Alliance (USMX). There is no indication that talks are restarting.

President Biden has said since Monday that he would not invoke the Taft-Hartley Act, which would require the administration to get a court order for an 80-day "cooling-off period" for negotiations to continue.

The American Farm Bureau Federation pegged that about $1.4 billion in agricultural exports pass through the East Coast and Gulf Coast ports controlled by the ILA.

DAIRY EXPORTS TIED UP

The National Milk Producers Federation and U.S. Dairy Export Council both weighed in as they called on the Biden administration to immediately intervene. The groups cited that more than 530,000 20-foot equivalent units -- or containers -- of dairy products were shipped last year through the East Coast and Gulf ports, making up 21% of total dairy exports by volume. The strike essentially risks about $32 million in dairy exports per week or causing exporters to search for alternative shipping routes and driving up export costs.

"Global customers depend on the reliability of U.S. dairy products," said Krysta Harden, president and CEO of USDEC. "Delays caused by this strike not only risk damaging those relationships, but also severely impact perishable dairy products that require timely delivery. The negotiating parties need to come together to find a resolution and ensure port operations resume as soon as possible."

It should also be noted that Agriculture Secretary Tom Vilsack was former CEO of USDEC before returning to his Cabinet post.

SOY CONTAINER USE

Mike Steenhoek, executive director of the Soy Transportation Coalition, said the group continues to "not take sides in the negotiations," adding some compromise between the ILA and the USMX will likely be required.

"While we are not taking sides between the dockworkers and the port operators, we clearly are on the side of the American farmer, and what is in the best interest of the American farmer is to have a supply chain that facilitates their ability to meet the needs of our international customers, rather than being an impediment to it," Steenhoek said. "Unfortunately, the current strike on the East and Gulf coasts is one more obstacle to farmers being profitable."

Steenhoek cited that 5.8 million metric tons of soybeans (213 million bushels) were exported via containers last year. About half of those went out of East and Gulf coast ports. So, roughly 5% to 6% of soybean exports could be affected by the strike, he said.

USDA reported the following 2023 exports of U.S. Soybeans via container:

-- Norfolk, Virginia: 1,616,854 metric tons.

-- New York/New Jersey: 372,110 metric tons.

-- Baltimore, Maryland: 324,500 metric tons.

-- Charleston, South Carolina: 217,892 metric tons.

-- Wilmington, North Carolina: 47,744 metric tons.

-- Savannah, Georgia: 43,710 metric tons.

-- Houston, Texas: 24,758 metric tons.

A bigger impact is the detrimental effect on meat exports as well, Steenhoek noted. "You cannot harm meat and poultry exports without harming soybean exports."

Some ports, such as Savannah, have expanded capacity in recent years to increase poultry exports out of their terminals.

The AFBF Market Intel report shows 78% of agricultural exports move through East Coast ports, along with 56% of raw cotton and 36% of meat exports and 30% of dairy products.

TOM TIES TO AG TRADE DEFICIT

On Fox News, former Ambassador to the United Nations Food and Agriculture Organizations Kip Tom -- an Indiana farmer and co-leader of the Farmers and Ranchers for Trump 47 coalition -- said the strike reflects another failure of the Biden-Harris administration. The Commerce and Transportation secretaries should have been engaged months ago to avoid this outcome, he said.

"When I looked at our industry, our exports are off from under the Trump administration, we had nearly a $32 billion trade surplus to next year -- they're predicting it'd be a $42 billion deficit," Tom said.

Tom also pointed to the decline in net farm income, which is down 23% since 2022, according to the latest USDA forecast.

"So, we need global trade, but we haven't had any trade deals with Biden/Harris administration," Tom said. "So, I hope they get this solved quick. I know we export about $18 billion worth of pork and beef out of these ports, from Texas to Maine, and another $6 million in poultry products. We have to solve this, and we have to make sure that we have ports, too, that are operating efficiently and competitively with others around the world. Are we going to be the global trader of choice?"

Tom noted the agricultural supply chains will start backing up soon if food processors cannot move products to port. "This has got to be solved quick to make sure we remain competitive in the marketplace," he said.

Tom also challenged the ILA premise that automation would take workers' jobs. He said ports need to upgrade to stay competitive.

"Automation is just part of what we have to go through in life," Tom said, adding he's been to ports in other areas of the world that are highly automated. "Automation has paid well and it hasn't eliminated jobs. They've found other jobs for those people working at ports. So, again, we need to be competitive, and we've got to get automated."

CONCERNS OVER FEED INGREDIENTS

The American Feed Industry Association (AFIA) said the strike poses a threat to essential ingredients and equipment used in the production of livestock and pet food. A prolonged strike could wreck supply chains in ways that mirror -- "or could be worse than -- the days of the COVID-19 pandemic," said Constance Cullman, president and CEO of AFIA.

"Where alternative ingredients or shipping routes can be found, animal food manufacturers will do their best to produce feed, pet food and treats, but will likely incur increased prices that, unfortunately, must be passed onto farmers and pet owners," Cullman said.

"Where alternatives do not exist, due to logjams at other ports or unavailable ingredient options, feed and pet food aisles may go bare should the strike be prolonged."

Cullman added, "The Biden administration needs to tell the two parties that walking off a short dock is not a solution to their labor squabbles; the entire U.S. economy and our human and animal food supply depends on them getting back to work."

AFIA pointed back to a letter led last week by the National Grain and Feed Association (NGFA) with more than 190 agricultural groups calling on the administration to prevent the strike from taking place.

AFBF Market Intel column: https://www.fb.org/…

See "Voices for Agriculture: Kip Tom Stresses American Agriculture Drives National Power" here:

https://www.dtnpf.com/….

Also see "The International Longshoremen's Association Is On Strike" here: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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