FarmPolicy

November 14, 2019

West Coast Ports- Obama sends Labor Secretary to California- Agricultural Implications (Saturday)

Developments

Christi Parsons, Andrew Khouri and Chris Kirkham reported on Saturday at the Los Angeles Times Online that, “President Obama is sending Labor Secretary Tom Perez to California to meet this weekend with ship owners and longshoremen involved in the ongoing labor dispute that threatens to shut down 29 West Coast ports, a White House advisor said Saturday.

“As Obama prepared to leave San Francisco on Saturday morning, aides said he summoned Perez to get the parties together to talk. The union representing dockworkers and the Pacific Maritime Assn. met Friday without reaching a deal. It’s not clear when they’ll meet again.

“The workers’ last contract expired in July and the two sides have been operating without one since. The dispute broke open in the fall when the shipping group accused union workers of slowing down on the job as a negotiating tactic.”

The LA Times article explained that, “Obama still thinks the problems need to be solved at the bargaining table without intervention from the federal government. But he thinks Perez may be able to help the parties find common ground and dispatched him ‘out of concern for the economic consequences of further delay,’ White House spokesman Eric Schultz said Saturday.

“Perez will travel to California to meet with the sides ‘to urge them to resolve their dispute quickly at the bargaining table,’ he said.

“Perez is already in contact with the negotiators, Schultz said.”

House Ag Committee member Dan Newhouse (R., Wash.), who last week introduced a House Resolution expressing the sense of Congress that negotiations must come to a swift conclusion, indicated in a statement on Saturday that: “I am encouraged by the Administration’s response to calls for stepped-up involvement to address the dispute that has already crippled the West Coast’s export economy and had a devastating impact on Central Washington. I strongly urge both parties to remain at the negotiating table until a resolution is quickly reached to end the prospect of an even more damaging long-term port shutdown.”

Last week’s measure was introduced along with House Ag Committee member Jim Costa (D., Calif.) as well as, Dave Reichert (R., Wash.) and former House Ag Committee member Kurt Schrader (D., Ore.); for more details, see this article from Friday’s Los Angeles Times, “House members call for swift resolution of West Coast port dispute.”

Laura Stevens noted in Saturday’s Wall Street Journal that, “While still on the table, pay, pension benefits and the length of the contract aren’t expected to further hinder negotiations. Up until a couple of weeks ago, the two sides seemed very close to a settlement.

Both sides are at an impasse on arbitration, however. Four regional arbitrators currently act as judges in disputes between the union and port employers. Unless both groups agree to remove an arbitrator, he or she remains in place for a life term. At the heart of the dispute is a disagreement over whether one of the arbitrators should continue in the role.

“The union wants to adjust the rules so that at the end of each contract, either group could decide to unseat an arbitrator. The PMA wants to keep the system that has been in place for decades, arguing it allows for stability and keeps the union from ousting arbitrators who side with the employers.”

 

Agricultural Implications

Chris Kirkham and Tiffany Hsu reported on the front page of the Business Section in Saturday’s Los Angeles Times that, “On any given day, up to a dozen ships handle more than $1 billion worth of goods in the mammoth ports of Los Angeles and Long Beach, the nation’s busiest seaport.

“Thousands of trucks carry off 40% of the nation’s incoming container cargo each year, feeding into an extensive highway and rail network that brings electronics, cars and toys to consumers and businesses throughout the nation.

“But despite the enormous volume of goods flowing through the ports in San Pedro Bay, and a long-simmering labor dispute that threatens a shutdown of 29 West Coast ports, economists and trade experts said closures would have very little effect on the broader U.S. economy. That’s because the trade of goods through U.S. ports represents only a fraction of the nation’s total economic output.”

Nonetheless, the LA Times writers pointed out that, “Certainly many businesses would feel the pain, and have already felt it, after months of slowdowns at West Coast ports. Agricultural exporters who ship produce to Japan, China and Australia face canceled orders and spoiled food. Manufacturers who rely on parts from China are contending with work stoppages and delays.”

More specifically, Saturday’s article explained that, “A shipment of fruit set to depart to New Zealand and Australia in December left late last month.

“‘It’s the fresh fruit business — it’s perishable,’ said LoBue, whose company is based in Lindsay. ‘The growing season ends in May. Whatever you miss, you miss. There’s no catching up.’

Economists don’t dispute that companies that deal in commodities such as fruit and seafood will take a hit from the slowdown and potential stoppage. But most businesses can deal with such delays — though there may be costs.”

On Friday, Reuters writer Steve Gorman reported that, “Protracted labor strife and shipping disruptions at U.S. West Coast ports have hit farmers especially hard, posing a major barrier to perishable goods headed to overseas markets and resulting in losses estimated at hundreds of millions of dollars a week.

“Foreign Pacific Rim customers facing chronic delays in shipments of U.S. food and farm products are turning to other countries for produce ranging from citrus and apples to beef and pork, the Washington-based Agriculture Transportation Coalition (AgTC) has reported.

Many frustrated U.S. suppliers are deciding to forgo exports and scrambling instead to find domestic buyers for their produce, driving down prices, said Wendy Fink-Weber, a spokeswoman for the Western Growers trade organization.”

Friday’s article stated that, “Precise figures on the extent of damage are hard to come by. The AgTC has estimated that total U.S. agricultural export losses – for fruits, vegetables and meats shipped by container – were running roughly $400 million a week in December, the latest month for which industry data was available.”

Bloomberg writers Craig Giammona, James Nash and Lindsey Rupp reported that, “Even if West Coast dockworkers resolve their nine-month labor dispute soon, a lingering slowdown at the ports threatens to hurt U.S. companies for months to come.”

The Bloomberg article indicated that, “The congestion is taking a toll on consumer goods, food, clothing and other products. Tyson Foods Inc., the largest U.S. meat producer, has shifted its export strategy to cope with the situation. Cuts of meat that would have been sent to China are being used instead for lesser-value ground beef in the U.S., according to Gary Mickelson, a company spokesman.”

The article added that, “ConAgra, which sells Chef Boyardee canned foods, Orville Redenbacher’s popcorn and Reddi-wip dessert topping, lowered its annual forecast on Thursday, in part because of the port slowdown. The labor showdown has hurt exports of Lamb Weston potato products, as well packaged goods, including Swiss Miss hot chocolate and Act II popcorn, ConAgra said.”

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