Dairy Stakeholders Welcome End To Port Strike And Disruptions
U.S. dairy and agricultural stakeholders today welcomed news that the labor strike affecting East and Gulf Coast ports has come to an end, allowing port operations to resume.
“On Oct. 3, 2024, USMX (U.S. Maritime Alliance Ltd.) and the ILA (International Longshoremen’s Association) reached a tentative agreement on wages and will extend the master contract until Jan. 15, 2025, to return to the bargaining table to negotiate all other outstanding issues,” says an update on USMX’s and ILA’s websites.
In a statement, the U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) emphasized the importance of quickly finalizing contract negotiations to provide long-term certainty for U.S. dairy exporters.
“We are grateful to the Biden administration for its important role in getting the parties to return to work and resume port operations,” says Krysta Harden, president and CEO of USDEC. “This is a crucial step in ensuring that U.S. dairy products can continue to reach our international customers. We encourage both sides to continue their negotiations and reach a final agreement that protects the supply chain and strengthens the reliability of American exports.”
Impact Of The Port Strike On U.S. Dairy Exports
The dairy industry has been severely affected by the disruptions, as $1.7 billion in dairy exports flow through the East and Gulf coast ports each year. The three-day work stoppage has had ripple effects throughout the export supply chain, with dairy exporters reporting canceled sales and added time and costs to reroute products.
“We still need the contract negotiations to conclude swiftly,” notes Gregg Doud, president and CEO of NMPF. “International customers of U.S. dairy products need certainty that their orders will arrive on time, and dairy producers can’t afford further disruptions.”
Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), also expressed relief that the parties have reached a tentative agreement and terminals and ports soon will resume full operations.
“While the port strike lasted just three days, IDFA members had to reroute and front-load shipments since early September due to concerns that a strike might occur, and truck rates increased as companies were stocking inventory for the holiday season. In addition, it will take weeks to clear the backlog caused by the strike,” Dykes says. “IDFA thanks the administration for listening to the concerns of the dairy industry and for weighing in on the negotiations. We urge the administration to remain actively engaged to avoid facing similar disruptions as we enter the New Year.”
Wider Implications Of The Port Strike On Agricultural Exports
Nearly 50,000 members of the ILA went on strike earlier this week after a previous labor contract expired. Work stoppages impacted ocean freight at gateways across the U.S. East and Gulf coasts. The strikes also could have had major implications for U.S. agricultural imports and exports. About 46% of containerized agricultural exports (16.6 million tons) depart through East Coast ports. Looking at a product-by-product breakdown, about 30% of all waterborne dairy exports route through ports that were impacted by the strike, according to the latest issue of “The Dairy Bar,” a biweekly report from Ever.Ag in partnership with IDFA.
To circumnavigate port closures, many importers ordered goods early and/or rerouted containers to West Coast ports. However, with the Panama Canal still recovering from drought, conflict in the Red Sea and congestion due to increased shipping activity, West Coast shipping rates are climbing. As a result, some shippers halted eastbound exports altogether rather than reroute.
Efforts To Mitigate Future Port Strike Disruptions
Estimates by the American Farm Bureau Federation (AFBF) suggested a one-week closure of East Coast ports would have caused $318 million worth of economic disruptions to the agricultural industry.
“While there is a risk of shortages of some items, the United States is fortunate that it can meet its nutritional needs without importing food. America’s farmers grow a diverse range of food items that ensure the nation’s food independence. Rest assured, America’s food supply is strong, and store shelves will continue to be stocked with domestically raised products,” said AFBF President Zippy Duvall upon release of AFBF’s projections.
Duvall also noted the farm bill extension expired at the same time the dockworkers strike began.
Farmers and ranchers are focused on growing the food, fiber and fuel that families depend on, but they’re working under a cloud of uncertainty as several safety net programs designed to help them survive tough times begin to sunset, he said.
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Source: Cheese Market News