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US Group Urges Biden to Prevent Port Strike Threatening Agri-Food Trade

US Group Urges Biden to Prevent Port Strike Threatening Agri-Food Trade Dairy & Soy Food, Fresh produce, meat, Pan-industry, Shelf-stable Food and Beverage Business

The US Chamber of Commerce has called on President Biden to intervene and prevent a potential port strike that could have significant economic ramifications for the agriculture sector. As the agriculture organization highlights the situation, it emphasizes the urgency of the matter.

“We call upon the administration to immediately work with both parties to resume contract negotiations and ensure there is no disruption to port operations and cargo fluidity,” the Chamber stated in a letter to Biden, representing a coalition of industry associations from diverse sectors, including meat, dairy, fresh produce, and frozen foods.

Additionally, the Chamber urged the administration to extend all necessary support to facilitate negotiations so that a final agreement can be reached before the current contract expires.

The American Farm Bureau Federation indicated in a report that disruptions at ports on the East and Gulf Coasts could cost the economy billions if a strike on October 1 is not resolved. “Over a one-week period, the potential value of disrupted containerized agricultural exports is estimated at $318 million,” the Federation noted, amidst anticipated strike actions by members of the International Longshoremen’s Association (ILA).

The potential strike is poised to proceed if an agreement is not established with the United States Maritime Alliance (USMX) by the expiration of the current ILA contracts on September 30.

A strike would undoubtedly yield “far-reaching effects,” according to the Federation. “Collectively, the value of containerized agricultural products passing through ILA-controlled ports, including both imports and exports, exceeds $1.4 billion per week,” they added.

The coalition of voices urging action includes food manufacturers, farmers, and a range of industry associations represented in the letter to the president. This also encompasses wholesalers, retailers, importers, exporters, distributors, and transportation and logistics providers.

“As we have seen with previous supply chain-related negotiations, the only way to reach an agreement that ensures the competitiveness of all parties and the stakeholders in the supply chain is to stay at the table until a new agreement is finalized,” the Chamber emphasized in its correspondence.

The American Farm Bureau Federation clarified that any strike would be limited to US ports with ILA workers on the East and Gulf coasts. Nonetheless, about 46% of containerized agricultural exports, equating to 16.6 million metric tons, originate from the East Coast ports.

Notably, nine of these ports account for nearly 94% of total exports, with Norfolk and Savannah leading the charge. “In total, approximately 14% of all US waterborne agricultural exports, by volume, would be at risk in the event of an ILA strike,” the Federation warned.

Savannah, in particular, represents almost 50% of East Coast containerized poultry exports. “Nearly 80% of waterborne poultry exports would be jeopardized, diminishing prices for poultry producers by restricting vital market access,” the Federation explained. This disruption would also adversely affect feed suppliers, especially those producing corn and soymeal, key ingredients for poultry operations.

In addition, a strike at these critical ports would hinder significant quantities of other agricultural exports, including hay, cotton, red meat, vegetables, dairy products, and edible nuts.

The Federation also cautioned that disruptions at East and Gulf Coast ports would likely create backlogs of exports, preventing farmers from capitalizing on higher prices in the global market. This could lead to domestic oversupply, decreasing prices for key commodities such as meat, poultry, cotton, soybeans, and specialty crops.

Furthermore, shortages and delays resulting from such a strike could raise prices for consumers, particularly for perishable goods. The Federation reported that containerized products play a considerable role in imports as well, representing approximately 73% of all waterborne agricultural imports. East Coast ports alone manage about 72% — equating to 30 million metric tons — of these goods, with New York, Philadelphia, and Houston being especially vital.

In total, an ILA strike could impact around 53% of US waterborne agricultural imports, leading to a potential economic fallout of over $1.1 billion per week.

With the food and beverage industry facing such complexities, remaining vigilant and proactive in negotiations will be critical in navigating these trends and ensuring the stability of the food and drink business amid ongoing challenges. As food and drink consumer trends evolve, industry stakeholders must adapt to maintain competitive advantages and ensure the continued flow of essential goods.

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