By Clinton Griffiths and Alison Rice
After a nine-month standoff, farmers, exporters and consumers breathe a sigh of relief
Stan Boshart, owner of BOSSCO Trading LLC, knows straw hasn’t always been easy to market.
“It’s a very small, very specialized product,” he says. During the past 10 years, Boshart has exported straw through Portland, Seattle and Tacoma ports selling to Asian cattle markets. His team loads and unloads at the port 40 to 60 times a week.
A slow down by export workers in late 2014 caused a ripple effect throughout the agriculture industry.
For nearly nine months, the International Longshoremen and Warehouse Union, representing dock workers along the East Coast of the U.S. and Canada, the Gulf Coast, Great Lakes, Puerto Rico and inland waterways, have worked without a contract as the union has been unable to reach a labor agreement with the Pacific
After months of negotiations and threats of an economically disastrous shutdown, the news of a “tentative agreement” in the West Coast port dispute in February came as a relief to many in the agriculture industry.
Farmers who rely on the West Coast for transport have seen the largest disruption in cash flow.
During the standoff, Boshart’s employees would often sit at the ports for hours, racking up as much as 65 hours a week—costing him up to $1,500 a week in overtime pay.
“It is costing the U.S. economy $1 billion a day,” says Jay Theiler with Agri Beef Co. of Boise, Idaho, a vertically integrated beef operation with ranches, feedyards and packing plants. Much of its beef is shipped overseas.
In the past few months, Agri Beef Co. has only shipped about 20% of their normal product. The slow down cost them $10 million to $15 million.
With exports worth $300 per head for cattle, it’s vital to have port access, notes Phil Seng, CEO, U.S. Export Federation (USMEF). He calculates 80% of warehouse red meat is shipped through West Coast ports.
“Since we began to see increasing congestion in the West Coast ports several months ago, the global customer base the U.S. meat industry has spent decades building has been put at risk by shipping delays and uncertainty,” Seng says. “This situation had become very damaging for exporters, farmers, ranchers, processors and everyone in the supply chain.”
It could have gotten worse; a shutdown of West Coast ports could have cost the U.S. economy $2 billion a day.
Details of the agreement have not been released, other than it will cover workers at 29 ports on the West Coast for the next five years. Clearly, it was not an easy deal to reach because it required involvement by the Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh.
“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,” says Mike Steenhoek, executive director, Soy Transportation Coalition. “The American Meat Institute and National Pork Producers Council claim the delays cost each industry $40 million per week.”
However, “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,” Steenhoek adds.