Jim Vondruska/Reuters
- The US port strike on the East and Gulf Coasts could threaten farm exports amid harvest season.
- The National Grain and Feed Association warned of supply chain disruptions and lower farmgate prices.
- President Joe Biden urged fair negotiations, highlighting the economic risks and worker wage concerns.
The US port strike at East and Gulf Coast ports isn't just impacting bananas and consumer imports into the country — it could hurt America's farm exports too.
The industrial action comes just as US farmers are harvesting their crops in a bumper season weeks ahead of the presidential election.
On Friday, the National Grain and Feed Association, or NGFA, CEO Mike Seyfert warned that the strike could have devastating impact on the industry.
"The last thing NFGA members or the agricultural community can afford right now is a breakdown in any part of our nation's shipping network," he said.
About 40% of the US' agricultural exports shipped in containers move through the East and Gulf Coast ports, according to a Friday letter from the association to the White House sent ahead of the industrial action.
The association that represented 200 farm groups had warned of an impact on the supply chain that would "quickly reverberate throughout the agricultural economy, shutting down operations and potentially lowering farmgate prices."
Seyfert told Politico on Friday that while some farm exports can be moved to the West Coast for shipping, there's probably not enough capacity there.
"You're going to see increased shipping cost," he said, adding that this would impact agribusinesses and producers.
To be sure, agricultural commodities are typically shipped in bulk carriers rather than in container ships, so the strike wouldn't impact most wheat, maize and, soybeans exports, wrote Joseph Glauber, a senior research fellow at the DC-based International Food Policy Research Institute in a Monday report.
However, US meat, dairy, and poultry exports could be disrupted, hitting developing countries hard, wrote Glauber.
About half, or $7.15 billion worth, of beef, pork, poultry, dairy, and egg exports to development countries last year were exported via the East and Gulf Coast ports, according to Glauber. This excludes exports to Mexico, much of which is shipped via truck or train.
"A prolonged strike would force importers to seek alternative supplies, either from West Coast ports or other countries," wrote Glauber. "US meat, dairy, and poultry exports are especially vulnerable. Some of the costs of higher transport costs would be borne by importers (through higher prices). US producers would also lose through lower prices."
Logistics experts told Business Insider's Tim Paradis that the port strike could damage the US economy badly.
President Joe Biden on Tuesday urged ports employers group United States Maritime Alliance to present a fair offer to the International Longshoremen's Association, which represents the striking workers.
"Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates," said Biden. "It's only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well."