Just when signs of the economy seem to be brightening, the bulb has flickered.
At press time, ships remained anchored offshore up and down the West Coast, waiting to unload everything from new computers to fruit.
Economists say the longshoremen's lockout is costing the U.S. economy $1-2 billion a day. “That's huge, especially when you consider a third of all ag exports are shipped from the West Coast,” says Bart Ruth, American Soybean Association (ASA) chairman.
On U.S. shores, raw goods and products — including Midwestern corn and soybeans — are stuck in the transportation chain. In fact, last year 12% of the U.S. soybean crop was shipped from West Coast ports. That's not the volume handled by Gulf ports, but it's sizeable and important.
The bigger worry, however, is that countries like Brazil or India could jump in and start supplying prime Pacific Rim markets with beans. If they do, can we get our former markets back?
“Once they start buying their grain elsewhere, we stand to lose them as buyers,” says Alan Kluis, a Soybean Digest marketing editor.
Also, says Steve Censky, ASA executive director, “when pork and beef lose their markets, it has a negative indirect effect on soybean meal demand domestically.”
The meat industry reports nearly $9 million a day in lost exports during this lockout. Nearly 60% of meat exports land in Pacific Rim countries and are exported from West Coast ports.
This lockout of 10,500 longshoremen will likely be over by the time you read this. But the damage caused will undoubtedly continue.
Still, how do you manage around unforeseen obstacles like a strike by dockworkers? There's just no way to take all the risk out of farming or life.
So the message is clear. You can't manage what happens off your farm, so manage the risks on your farm that you can control.
A price spiral can't ruin your year if your crop is already marketed. And escalating input costs can't suck the life out of your profits if you've locked them early.
Unlike the dockworkers, you can't go on strike for better wages. But also unlike them, you have control over your own business. You can manage your farm to stay in business without shutting down the U.S. economy to make a buck.