You are constantly being reminded that the Class I Railroads are having some serious issues. You have been aware that the Mississippi river needs some major upgrades. You know of roads and bridges in your area that need to be fixed and improved. But do you know that issues with the West Coast ports are also affecting you?
No not the bulk grain facilities. I am referring to the ports that are handling millions of containers (the metal boxes that are 8 feet wide by 20 to 40 feet long by 8 feet tall). The difference with the port issue is it is not an infrastructure problem.
Today, there are many products that are sold and shipped to customers around the world in containers. We estimate that roughly 15 million bushels of identity preserved soybeans are shipped in a container. The U.S. Meat Export Federation say the U.S. is currently exporting 28 percent of our pork, with much of these products going to Asia. Those exports to Asia travel through the West Coast ports.
Yet soybeans and pork aren’t the only agricultural products shipped in a container – soybean meal, soybean concentrate, soybean flour, DDGs, complete feeds, beef, lamb, turkey, chicken and many more products are shipped via container.
The overarching problem is that the contract is up between the International Longshoreman and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). The negotiations cover 29 U.S. West Coast ports, including all the major West Coast container ports — Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma. The dispute does not, however, cover ports in Canada and on the U.S. East and Gulf coasts. With all that territory in flux, ILWU has the muscle to flex and slow down the flow of the containers, which has caused huge backups.
These container backups have a reach much further than the ports, as railroads have suffered major slowdowns in moving containers into the mainland and bringing containers back to the ports. The stories of the costs this is resulting in is exhausting, and it reaches more than just the agriculture industry.
When you stop and think about the West Coast port labor dispute, it is very troubling. Here you are producing food and feed for people around the world and you are being denied reliable access to send them your products. The U.S. has enjoyed many moments and opportunities to gain customers overseas, not just because we have the best producers in the world, but because we could provide reliable delivery of those high quality products. This very fact has allowed us to remain competitive.
Yet today, a different story is emerging, one in which we are losing customers due to unreliable service and increased costs for the products we grow.
With this said, the Minnesota Soybean Growers Association (MSGA) has signed onto a letter with 60 other Agriculture organizations to President Obama to use his authority to resolve this problem as soon as possible. (Click here to read the letter.) We feel strongly that what is happening with the labor contract dispute is at the end of the day affecting you as a farmer the most.
In the end, we are having one heck of a year with transporting our goods to people that are in need of our feed and food. If we do not invest in all modes of transportation to have a reliable and efficient system, then you, the producer, will be forced to reduce the cost of your production to compete globally.
Sam Ziegler is the Minnesota Soybean Director of Marketing Programs. He can be reached at 507-388-1635 or by email at email@example.com.