US port strike disrupts supply of frozen burgers, seafood

CHICAGO: Dock workers on strike in the US east coast and Gulf Coast ports are preventing imports of beef that restaurants and retailers increasingly rely on to make burgers because of limited domestic supplies, traders and industry members said.

The labor strike prevents everything from car shipments to containers full of Guatemalan bananas and Italian wine from being loaded or unloaded at dozens of ports from Maine to Texas. Along with beef, U.S. seafood imports and chicken exports are being disrupted.

Even short-term disruptions to shipping could cripple the broader U.S. food supply chain, according to experts and food importers. If the strike continues, the result will be shortages of some food products, price inflation or both, they said.

More than 50 container ships were already anchored or loitering off dozens of East and Gulf Coast ports early on Wednesday, compared with just three on Sunday before the strike, according to shipping data from Reuters and Everstream Analytics.

“From a supply chain standpoint, this is a nightmare,” said Jason Miller, interim chair of the research department at Michigan State University. supply chain management.

The beef sector could suffer knock-on effects if the strike disrupts imports for more than a week, industry members said. U.S. beef supplies dwindled after a severe drought and high grain prices led ranchers to sell their cattle, reducing the country’s herd to its lowest level. in decades. The decline in cattle numbers led to skyrocketing beef prices in the United States and a flood of cheaper imports. Australia’s beef imports increased 72% through July this year, according to data from the US Department of Agriculture. Imports from New Zealand and Brazil have also increased.

In anticipation of the strike, suppliers to American grocery stores and fast-food restaurants increased imports of frozen lean meat that is mixed with domestic supplies to make hamburger meat, three industry insiders said.

Dan Sorbello, who imports beef to the ports of Philadelphia and Houston, said he unloaded containers from ships faster than normal before the strike to ensure he could take possession of the meat and distribute it.

“We have maybe a lifeline for a week,” said Sorbello, director of Sorbello Refrigerated Services.

Surf and turf
PanaPesca USA LLCwhich imports and exports seafood, also stocked up on additional supplies of squid and shellfish to meet its customers’ needs before the strike, said commercial director Eric Buckner.

Much of PanaPesca’s product arrived in freezer containers, but some is still stuck on ships anchored offshore, he said.

The strike could increase costs for fast-food restaurants if it persists more than a week, said Bob Chudy, a consultant to companies that import beef.

“Suddenly, fast food chains that have relied on lean meat from abroad at much more reasonable prices would be forced to turn to domestic alternatives,” Chudy said.

McDonald’s Corp and Burger King, owned by Restaurant Brands International, did not respond to requests for comment.

Beef importers could face demurrage fees if the strike persists, costs that could be passed on to consumers, analysts said. Shipments of fresh refrigerated meat, which can be used in restaurant dishes like fajitas, are at risk of spoilage, they said.

U.S. retail prices for ground beef hit a record high of $5.58 per pound in August, according to the latest available federal data.

For the export-dependent U.S. poultry industry, the strike is also ill-timed, said Matt Busardo, leader of the U.S. poultry team at commodity information firm Expana.

Domestic demand is declining as consumers shift to eating cold-weather foods like roast and chili, instead of grilled chicken, he said. The sector depends on ports like Savannah to export leg quarters and thighs to countries like Angola and Cuba.