Longshoremen at ports along the East and Gulf Coasts are set to strike when their current labor contract expires at 12:01 a.m. on Oct. 1. The strike will impose a significant economic impact on the U.S. meat and livestock industries, according to U.S. Meat Export Federation (USMEF) Vice President for Economic Analysis Erin Borror.
“These East Coast and Gulf ports have accounted directly for nearly $3 billion worth of U.S. red meat exports in the first seven months of the year. And so that equates to roughly $100 million or more worth of red meat exports per week going out of these ports,” Borror explains in the USMEF Audio Report. “And as we learned from the COVID shipping issues, when there is one disruption in the shipping or in the supply chain, there are ripple or domino effects.”
The labor contract between the International Longshoremen's Association union representing 45,000 port workers and the United States Maritime Alliance employer group expires late Monday, with negotiations at an impasse over pay. The strike comes at a time of year when shipments would normally be increasing.
“Our production and exports kind of accelerate, typically in the fourth quarter, and especially with our seasonal increase in pork production and exports, we're really looking at the need to be able to handle and accommodate more, including ahead of year-end holidays. And of course, we're exporting record large share of our production for pork, and we're up over around 30% of pork production going to export when we include variety meats, and for beef about 14% of that beef and variety meats being exported, and again, necessary for the profitability of our industries,” Borror says.
USMEF notes that 45% of waterborne pork shipments and 30% of waterborne beef shipments move out of the affected ports at a pace of about $100 million worth of product weekly. Much of that product is handled by smaller companies serving very specific markets such as the Caribbean or Central and South America as well as variety meats like beef livers to Egypt. These are routes that do not have economically viable shipping alternatives.
“Our customers in the Caribbean, the Dominican Republic, Central America, and then Colombia and the South American countries - much of that is off of the Gulf and East Coasts. And for beef in particular, we're reliant on Houston for variety meat exports, including the livers that go to Egypt. Those are heavily out of Houston,” she says. “We really need to think about the impacts indirectly on all U.S. red meat exports, which were valued at over $11 billion in the first seven months of the year.”
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