unionized dockworkers on the east coast And Gulf Coast ports began strikes on Monday, which will impact the flow of goods through ports that handle about half of ocean trade for the U.S. and could hit food prices.
Ports affected by The International Longshoremen’s Association’s strike centers on To import food from places like South America and Central America.
For example, about two-thirds of bananas arrive at East Coast and Gulf Coast ports.
The US Department of Agriculture (USDA) issued a statement on Tuesday saying it does not expect food prices to go much higher. affected by port strike In the near future.
“Our analysis suggests that we should not expect significant changes in food prices or availability in the near term,” the USDA said. “Thanks to the generally smooth movement of goods through ports and our strong domestic agricultural production, we do not expect shortages anytime in the near future for most commodities. Similarly, non-containerized bulk export shipments including grains will remain unaffected by the strike.
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“For meat and poultry commodities exported through East Coast and Gulf Coast ports, increased available storage space and redirection of products to alternative domestic and international markets may alleviate some of the pressure on farmers and food processors.
“We are tracking downstream impacts in the West, and we will continue to monitor and work with industry to respond to potential impacts.”
Alexander Field, an economics professor at Santa Clara University’s Leavey School of Business, said Fox Business’s perishable food items will be among the most sensitive categories of products due to price increases or decreases due to the strike.
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“If there is an impact … it will be on perishable, nonperishable food — which has an immediate impact, unlike some other categories like cars and trucks, machinery, furniture, clothing, etc.,” Fields said.
“But if the strike continues, that could happen, and it would create a shortage. The shortage will put upward pressure on prices, which means the inflation rate will increase. And if this continues, it has the potential to raise the unemployment rate and slow GDP growth.
“Retailers typically hold inventory that can help them manage short-term disruptions,” Volodymyr Babich, a professor of operations and analytics at Georgetown University’s McDonough School of Business, told Fox Business. However, most do not have enough stock to meet demand for extended periods, especially several weeks. This is especially true for perishable items like bananas, which have a limited shelf life.
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Babich said that while businesses may consider re-routing shipments or using alternative means such as air freight, there are also “significant risks” to supply chains.
“Prolonged disruption at US ports, Due to both strike and crowd After this, there may be a shock in global supply chains. “We may see opportunistic price increases by some retailers, panic buying and hoarding by both businesses and consumers, even for products not directly affected by the strike,” Babich said.
