Chances of a Strike at Major Ports is Growing; Here's How it Could Impact Farmers

A potential dock workers' strike October 1 on the East Coast and Gulf Coast would not significantly impact grain export facilities. The majority of U.S. soybean and grain exports would not be impacted by the negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMA).

The contract ends on September 30, and, so far, no formal negotiations have been held and none are scheduled. Bulk grain export facilities typically operate with different labor arrangements, such as their own employees or different labor unions.

The strike would, however, impact agricultural products exported via containers. The strike would significantly impact exports of chilled or frozen meat, eggs, and other livestock products, which are primarily shipped in containers. Any harm to the U.S. livestock industry would indirectly affect soybean and grain farmers, as these industries are interconnected. East and Gulf Coast ports accounted for 44% of U.S. waterborne pork exports and 29% of waterborne beef exports in the first half of this year. New York/New Jersey, Wilmington and Charleston were the largest East/Gulf ports for pork exports and Houston was largest for beef.

One industry contact emailed: “There might be some limited disruptions to bulk grain exports because of sympathy with the strikers or just general disruption at a particular location.”

What could happen: The Biden administration has decided not to invoke the Taft-Hartley Act to intervene in a labor dispute, a law that allows the President to step in during serious labor conflicts when national health or safety is at risk. The Taft-Hartley Act has been invoked 37 times in the past, allowing for an 80-day "cooling off" period, but Biden officials confirmed they are not considering using it in this case. The last time it was invoked was in 2002 by President George W. Bush during a West Coast port lockout. Instead, Biden has previously opted for negotiation strategies, such as sending officials to mediate labor disputes.

Bottom line: While the potential dock workers' strike would not directly impact bulk grain export facilities, it could have significant effects on containerized agricultural exports and indirectly affect grain producers through disruptions in the livestock industry. The potential strike would affect 36 ports along the East Coast and Gulf Coast, from Maine to Texas.

Negotiations between the two parties have stalled, with several issues remaining unresolved: wage increases, limits on port automation, and use of automated technology to process trucks without union labor. The ILA has voted unanimously to support a strike if their demands are not met. To date, the two sides appear to be far apart in negotiations.

ILA President Harold Daggett has stated, "The ILA most definitely will hit the streets on October 1st if we don't get the kind of contract we deserve.” Last-minute agreements are not uncommon in labor negotiations, so the situation could change rapidly in the coming days.

EDITOR’S TAKE:

One can only hope that this dispute is settled in advance of the strike deadline. Although it appears the direct impact on agriculture may not be that great at first, the longer a strike is imposed, the more detrimental it could become. In addition, other industries, such as energy or fertilizer shipments, could be impacted if the strike drags on. Don’t believe for a minute that such a strike is not possible. It is a way for the union to create pressure to obtain their ultimate objectives. A strike would definitely have a negative effect on most Americans, including farmers/ranchers. They are already burdened with enough challenges in 2024 and don’t need another one to contend with. Automobiles and parts could also become a problem with such a strike. We will be watching this closely and update you with any sales guidance once we know more.