By David Shepardson, Jarrett Renshaw and Karl Plume
WASHINGTON/CHICAGO (Reuters) -Agriculture groups urged the White House on Wednesday to take action to prevent a possible Oct. 1 strike at U.S. East and Gulf coast ports that handle about half of the nation’s ocean trade land handling, including consumer goods such as coffee, meat and eggs.
Dozens of groups, including the American Farm Bureau Federation, Renewable Fuels Association and American Chemistry Council, said that “the time has come for the U.S. government to intervene and ensure that port operations do not stop” to damage U.S. agriculture and prevent the economy.
Republican Senator Ted Cruz cited a JPMorgan analysis that predicted a port strike could cost the U.S. economy $5 billion a day, warning that the U.S. is “teetering on the brink of the first union strike at East Coast and Gulf Coast ports since 1977.”
Cruz is from Texas and represents the district that includes the Port of Houston, one of 36 seaports at the center of labor talks that appear deadlocked over worker wages.
Threatened work stoppages could also impact other busy ports such as New York and New Jersey; Savannah, Georgia; and Norfolk, Virginia, and problems for a maritime shipping network already stretched thin due to the diversion of ships around Africa to avoid militant Houthi attacks on ships near the Suez Canal.
U.S. companies dependent on East Coast and Gulf Coast ports are scrambling for solutions ahead of a looming strike.
The current contract between the International Longshoremen’s Association union, which represents 45,000 longshoremen, and the United States Maritime Alliance, which negotiates for employers at ports from Texas to Maine, expires September 30.
A threatened strike would take place just weeks before the US presidential elections between Democratic Vice President Kamala Harris and Republican former President Donald Trump.
The White House did not immediately comment on the agricultural groups’ request.
“We are monitoring and assessing potential ways to address impacts to U.S. supply chains related to activities at our ports, as appropriate,” White House spokesperson Robyn Patterson said Tuesday. President Joe Biden’s administration has said the president does not plan to invoke a federal law known as the Taft-Hartley Act to prevent a strike.
Any delays and costs associated with a strike can quickly snowball, putting many sectors at risk, including retail, manufacturing and food supply.
About 14% of all US agricultural exports by water, measured by volume, would be at risk from a strike. Over a one-week period, the potential value of these exports is estimated at $318 million, the Farm Bureau said in an article.
In addition, 53% of U.S. waterborne agricultural imports are vulnerable to a strike by volume, leading to a potential economic impact of more than $1.1 billion per week, the group said.
A prolonged strike could lead to shortages of well-known products such as bananas, coffee and cocoa, which could eventually translate into higher food prices.
It could also lead to lost export sales of key agricultural products, including beef, pork, chicken and eggs. However, U.S. consumers could benefit from dumping these perishable products on the domestic market as manufacturers adopt a “sell it or smell” strategy.
Of the nearly $5.5 billion in U.S. poultry meat products exported last year, two-thirds were shipped from East Coast and Gulf Coast ports, according to data from U.S. Customs and the USA Poultry & Egg Export Council.
“The American consumer could be a marginal beneficiary at the egg and meat aisle,” said Sterling Smith, director of agricultural research at AgriSompo North America.
“However, these gains may be more than offset by issues with coffee and cocoa.”
