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Ranchers, Exporters Relieved at West Coast Port Deal

17:24PM Feb 23, 2015

After months of negotiations and threats of an economically disastrous shutdown, the news of a “tentative agreement” in the West Coast port dispute came as a relief to many in the agriculture industry.

“We’re pleased to see this months-long negotiation come to an end, and now it’s time to get the West Coast ports back up and running at their full speed," said Andrew Walmsley, director of Congressional relations at the American Farm Bureau Federation in Washington, D.C. "American agriculture has suffered great losses, some of which cannot be recovered, but we’re ready to get back to business and rebuild trade relationships with our customers across the Pacific."

So is the U.S. Meat Export Federation, a Denver-based trade association.  As contract negotiations dragged on between the Pacific Maritime Association (shippers) and the International Longshore and Warehouse Union (dockworkers), the meat trade group had become more and more concerned about the impact on American meat producers and exporters.

“Since we began to see increasing congestion in the West Coast ports several months ago, the global customer base that the U.S. meat industry has spent decades building has been put at risk by shipping delays and by the uncertainty surrounding these contract negotiations,” said Philip M. Seng, president and CEO of the organization, which develops export markets for American beef, pork, lamb, and veal products. “With nearly 80 percent or our waterborne red meat exports utilizing West Coast ports, this situation had become very damaging not only for exporters, but also for farmers, ranchers, processors and everyone in the supply chain.”

It could have gotten even worse; a shutdown of West Coast ports could have cost the U.S. economy $2 billion a day.

Details have not been released for the agreement, other than it will cover workers at 29 ports on the West Coast for the next five years. But it’s clear it was not an easy deal to reach. Getting the shippers and dockworkers to finally find common ground required the involvement of U.S Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh.

While the standoff has been resolved, it also illuminated the importance of exports to American farmers and ranchers.

"As business owners, soybean farmers count on a smoothly-operating supply chain to stay competitive. The work stoppage on the West Coast is something that continues to have ripple effects not only on soybean farms, but within the processing industry, and especially in the livestock industry that represents the top consumer of soybean meal," said Wade Cowan, president of the American Soybean Association.

“While the disruption on the West Coast has imposed harm on the export of soybeans and grain, it has had a tragic impact on the exports of meat, fresh fruit, and a host of other agricultural products,” said Mike Steenhoek, executive director of the Soy Transportation Coalition. “Many of these products, like meat, are domestic customers of soybeans and grain which are in turn exported.  The American Meat Institute and the National Pork Producers Council claim that the West Coast delays have cost each industry $40 million per week.”

That’s mighty costly, according to Steenhoek. “The long-term question remains whether it is in the best interest of U.S. agriculture and the overall economy for 13,600 highly compensated dockworkers on the West Coast to have such a pivotal role in our country’s ability to export to the global marketplace.”