Most folks when they think of agriculture see crops growing in a field or cows grazing in a pasture. But the industry is much more complex and represents economic effects that we don’t tend to see. Once the grain or the livestock leave the farm there is a tapestry of industries including transportation, processing, wholesale, retail, shipping etc. that are woven together to eventually put food on folks’ tables.

The current East Coast port strike has been averted for now but not settled. If a strike were to occur let’s look at how that part of the agriculture chain affects farmers.

An U.S. East Coast port strike would have severe consequences for food and many other farm products shipped from American farm and ranch families to international buyers as the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) cannot come to an agreement.

The ILA is the largest union of maritime workers in North America, representing nearly 85,000 longshoremen across the Atlantic and Gulf coasts, Great Lakes, major U.S. rivers, Puerto Rico, Eastern Canada and the Bahamas. Their members load and unload cargo at ocean port terminals, particularly in container and roll-on/roll-off operations. On the employer side, USMX represents approximately 40 ocean carriers and terminal operators where ILA members work. The union is reportedly seeking wage increases exceeding the 32% won last year by the International Longshore and Warehouse Union, which represents many West Coast port workers. Additional demands include a higher starting wage for new employees, enhanced health care benefits, increased employer contributions to retirement plans and keeping provisions that prohibit automation to prevent job losses.

In 2023, over 143 million metric tons of agricultural products, worth over $122 billion were transported through ocean ports. This represented just over 70% of U.S. agricultural exports value and 75% of volume. On the import side, U.S. ports received over 39.4 million metric tons in agricultural products, worth over $110 billion and accounting for 56% of imports by value. These figures highlight how crucial ocean ports are to U.S. agricultural trade.

The most significant disruptions would be felt in containerized agricultural exports, which compose just over 30% of U.S. waterborne agricultural exports by volume. The remaining 70% are raw, unprocessed commodities like grains, oilseeds, pulses, rice and animal feed, which are typically transported on specialized bulk carriers that are loaded and unloaded at dedicated facilities that often operate with non-ILA unions or independent workforces. About 46% of containerized agricultural exports depart from East Coast ports. In total, approximately 14% of all U.S. waterborne agricultural exports, by volume, would be at risk.

On the import side, containerized products play a much more significant role, representing 73% of all waterborne agricultural imports. The East Coast is crucial for these imports, handling 72%  of containerized agricultural imports. The top ports for these imports include New York, Philadelphia and Houston, with 11 ports accounting for nearly 90% of all containerized agricultural imports. In total, 53% of U.S. waterborne agricultural imports, by volume, are affected by an ILA strike, leading to a potential economic impact of over $1.1 billion per week. Collectively, the value of containerized agricultural products passing through ILA-controlled ports, including both imports and exports, exceeds $1.4 billion per week.

While the bulk nature of grain shipping shields most grain exports from the ILA-related disruption, there are exceptions. Notably, 2.67 million metric tons of soybeans were exported through East Coast ports in containers in 2023, representing 6% of U.S. waterborne soybean exports.

 The most immediate economic consequence for producers facing logistical bottlenecks is a sharp decline in basis. Basis represents the difference between the local cash price of a commodity which a producer receives and its corresponding futures price. When producers are unable to move crops to market, the local supply builds up. This excess supply, coupled with limited demand due to export disruptions, widens the negative basis.

Other commodities would feel an even greater impact than soybeans. Nearly 80% of waterborne poultry exports would be jeopardized, lowering prices for poultry producers as they lose vital market access. Additionally, impacts to poultry production would create upstream effects for feed suppliers, especially those producing corn and soymeal, which are essential feed ingredients for broiler operations.

In 2023, the U.S. exported 1.91 million metric tons of containerized agricultural goods to China. We also shipped 1.3 million metric tons to Indonesia, and 1.08 million metric tons to Vietnam. These nations ranked as the first, eighth, and 10th largest trading partners by volume for U.S. agricultural exports in 2023, respectively.

Consumers also are at risk as more than 3.8 million metric tons of bananas arrive at ILA-handled ports, supplying over 75% of the nation’s bananas. Beyond bananas, delays and shortages would occur for a wide array of everyday items. Price increases are a possibility as well. Nearly 90% of imported cherries, 85% of canned foodstuffs, 82% of hot peppers, and 80% of chocolate that arrive via waterborne vessels are offloaded from containers at these ports. The situation is similarly significant for beverages transported by vessel, with 80% of imported beer, wine, whiskey, and scotch, as well as 60% of rum, arriving in containers at East and Gulf Coast ports.

Redirecting exports through unaffected West Coast ports can provide relief to both producers and consumers. This strategy is particularly effective for the many products destined for Asia.

The critical challenge will be how effectively the domestic and global supply chains adapt to the shifting container movements, and whether certain regions might be left vulnerable, lacking access to efficient and cost-effective transportation options. Additionally, all ports face infrastructural limitations in how many containers they can process, meaning only a fraction of exports can realistically be rerouted.

With more than $1.4 billion in containerized agricultural goods passing through East and Gulf coast ports each week, the strike creates backlogs of exports, denying farmers access to a higher price in the world market, leading to a domestic oversupply, driving down prices for key commodities including meat and poultry, cotton, soybeans and specialty crops and further eroding farm profitability. On the import side, shortages and delays would raise costs for consumers — particularly for perishable goods.

“If the present Congress errs in too much talking, how can it be otherwise in a body to which the people send 150 lawyers, whose trade it is to question everything, yield nothing, and talk by the hour?” – Thomas Jefferson

Ron Kern the manager of the Ogle County Farm Bureau.