Port strikes could be worse than pandemic for US feed sector

The American Feed Industry Association (AFIA) warns that if the labor dispute continues, the sector risks losing foreign customers and may be forced to cut jobs.

The AFIA also cautioned that delays in receiving critical inputs—such as vitamins, minerals, amino acids, and micronutrients—could jeopardize animal health and increase costs for farmers and pet owners.

The port strikes follow the breakdown of negotiations between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA).

“US animal food manufacturers face a dire trading situation that mirrors – or could be worse than – the days of the COVID-19 pandemic,” commented AFIA CEO, Constance Cullman.

With reduced access to imports of essential ingredients, packaging materials, equipment or other goods, production of animal food may be limited at best, she continued.

Animal health 

Lengthy port closures could also threaten animal welfare; with almost 100% of vitamins for feed imported into the US, even brief delays in shipments could significantly affect livestock and pet health, said the trade group.

“The animal feed industry relies heavily on the interdependence of smooth shipping routes and has spent years building relationships with foreign buyers and sellers, yet overnight, could lose the ability to access or do business with international markets.

“Where alternative ingredients or shipping routes can be found, animal food manufacturers will do their best to produce feed, pet food and treats, but will likely incur increased prices that, unfortunately, must be passed onto farmers and pet owners. Where alternatives do not exist, due to logjams at other ports or unavailable ingredient options, feed and pet food aisles may go bare should the strike be prolonged.

“The Biden administration needs to tell the two parties that walking off a short dock is not a solution to their labor squabbles; the entire US economy and our human and animal food supply depends on them getting back to work,” stressed Cullman.

American Farm Bureau Federation (AFBF) data shows that, in 2023, grains, animal feed and hay accounted for 2.18 million metric tons, or more than 70%, of waterborne exports that ship from East and Gulf coast ports. 

In 2023, the overall export value for feed, feed ingredients and pet food stood at $13.4bn and imports stood at an estimated $5.4bn, according to AFIA data.

Soybeans and other commodities at risk​

The AFBF reported​​ that the bulk nature of grain shipping shields most grain exports from an ILA-related disruption, but there are exceptions. "Notably, 2.67 million metric tons of soybeans were exported through East Coast ports in containers in 2023, representing 6% of US waterborne soybean exports, according to USDA-Agricultural Marketing Service data."

Cutting off this vital outlet for producers is particularly biting when soybean producers are expected to harvest a record crop, and estimates of stored soybean stocks were up 22% over last year, said the organization.

"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. Soybean producers near Norfolk, Virginia — which handles over 60% of East Coast containerized soybean exports — could feel the greatest impact. Slowing exports also exacerbates storage shortages, further depressing prices."

Other commodities will feel an even greater impact than soybeans, according to the AFBF. "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. The Port of Savannah is responsible for nearly 50% of East Coast containerized poultry exports."