U.S. agriculture is bracing for a potential work stoppage at East and Gulf Coast ports that could greatly disrupt U.S. exports. Contract negotiations between the International Longshoremen’s Association and the U.S. Maritime Alliance broke down in mid-November over issues related to automation and have shown little progress over the past month. The two sides reached a tentative agreement on wages in early October and temporarily extended the existing labor agreement, bringing an end to a three-day strike work stoppage. However, that contract extension is set to expire Jan. 15. 

The uncertainty is already impacting U.S. red meat exports, according to U.S. Meat Export Federation President and CEO Dan Halstrom, as ocean carriers have begun announcing surcharges related to a potential strike and exporters are forced to look, where possible, to divert shipments to other ports.

"On the pork side, 45% of our waterborne exports go off the East or Gulf Coast, and on the beef side 30% of our waterborne exports originate from either the Gulf or the East Coast ports," Halstrom says. "For every week of a potential shutdown, it would be a loss in excess of $100 million just on beef and pork exports."

The impasse is already impacting the industry.

"We already have exporters, I'm sure, diverting cargo, or planning to divert cargo. Ocean carriers are anticipating that, so we already have surcharges in place, and probably there will be more in place between now and the 15th of January. And a lot of our cargo is refrigerated, so there's also the very real possibility that prior to Jan. 15, a lot of these ports may stop accepting refrigerated cargo just because of the uncertainty around the contract," Halstrom says.

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A port strike could impact U.S. beef and pork's advantage as a reliable supplier.

"That's the ultimate concern is our ability to supply to our customers. Our customers in regions like the Caribbean and regions like Central America, into Europe, into South America, even into the Middle East, a lot of that originates off the East Coast," Halstrom says. "So yeah, being able to supply our buyers on a regular basis in a reliable manner is is definitely at risk. This encourages them to look at alternative sources of supply, be it from South America, be it from Australia. In the end, one of the biggest things is our ability to keep our reputation as a reliable supplier. And with this sort of situation and the possibility of a shutdown that puts us at risk."