Tim Ryan, owner of Square 1 Farmers, and his son, Tim Ryan Jr., vice president of sales, explained their company's preparations for supply chain issues ahead of the port strike and provided guidance to businesses and consumers. Discuss the impact.
Longshoremen who formed a union Strikes at East Coast and Gulf Coast ports began Monday, affecting the flow of goods through ports that handle about half of seaborne trade to the United States and potentially impacting food prices.
The ports affected by the International Longshoremen's Association strike are important hubs for food imports from countries such as South and Central America. For example, about two-thirds of bananas arrive at East Coast and Gulf Coast ports.
The U.S. Department of Agriculture (USDA) issued a statement Tuesday saying it was not expected. grocery prices In the short term, it will be affected by port strikes.
“Our analysis indicates that we do not expect significant changes in food prices or availability in the near term,” the USDA said. “Thanks to the normal smooth movement of cargo through our ports and our strong domestic agricultural production, we do not expect any shortages in the near future for most items. Containerized bulk export shipments are not affected by this strike.
Longshoremen begin strike at Eastern and Gulf ports
The USDA said it does not expect the port strike to affect most food prices in the short term. (Ilya Nouberge/Bloomberg via Getty Images/Getty Images)
“For meat and poultry exported through East Coast and Gulf Coast ports, redirecting available storage space and product to alternative domestic and international markets can relieve some of the pressure on farmers and food processors. There is a possibility.
“We are keeping an eye on downstream impacts in the West and will continue to monitor and work with industry to address potential impacts.”
Port Strike: Can West Coast Ports Absorb Eastern and Gulf Coast Imports?
The Port of Wilmington is an important hub for imports of Chiquita's bananas and other fruits. (Hannah Baier/Bloomberg via Getty Images/Getty Images)
Alexander Field, an economics professor at Santa Clara University's Leavey School of Business, told FOX Business that fresh produce will be one of the more sensitive product categories. price increase or shortage Because of the strike.
“If there's going to be an impact… it's going to be fresh produce and perishables. It's a direct impact, as opposed to other categories like cars and trucks, machinery, furniture, clothing, etc.,” Field said. spoke.
“But if the strike drags on, that is likely to happen, and it will create shortages. Shortages create upward pressure on prices, which means inflation will rise. GDP growth, which could push up rates and slow economic growth. ”
What products can be destroyed by a port strike?
ILA longshoremen from Maine to Texas went on strike Tuesday while negotiations stalled. (Jesus Olarte/Anadolu via Getty Images/Getty Images)
Volodymyr Babich, a professor of operations and analysis at Georgetown University's McDonough School of Business, told FOX Business: “Retailers typically have inventory that can handle short-term disruptions. However, most retailers have inventory that can handle long-term disruptions. “We don't have enough inventory to meet demand.” This is especially true for fresh produce such as bananas, which have a limited shelf life. ”
Babich added that while companies could consider rerouting deliveries or using alternative methods such as air transport, there were also “significant risks” to transport. supply chain.
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“Prolonged disruptions at U.S. ports, both due to strikes and ensuing congestion, could send shockwaves through global supply chains, including opportunistic price hikes by some retailers and “We may see some panic buying and hoarding by both parties. Products are not directly affected by the strike,” Babic said.
