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Meat importers hope port strike lasts less than a week

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Beef, seafood importers stocked up before strike

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US beef imports surged after cattle supplies dwindled

By Tom Polansek and P.J. Huffstutter

CHICAGO, Oct 2 (Reuters) - Dockworkers striking at U.S.

East Coast and Gulf Coast ports are preventing imports of beef

that restaurants and retailers increasingly rely on to make

hamburgers due to limited domestic supplies, traders and

industry members said.

The labor strike blocks everything from shipments of

automobiles to containers filled with Guatemalan bananas and

Italian wine from loading or unloading at dozens of ports from

Maine to Texas. Along with beef, imports of seafood and U.S.

exports of chicken are being disrupted.

Even short-term disruptions to shipments could snarl the

broader U.S. food supply chain, according to experts and food

importers. If the strike stretches out, the result will be

either 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 Coast and Gulf ports as of early

Wednesday, compared to just three on Sunday before the strike,

according to Reuters shipping data and Everstream Analytics.

"From a supply chain standpoint, this is a nightmare," said

Jason Miller, interim chair of Michigan State University's

department of supply chain management.

The beef sector could see ripple effects if the strike

disrupts imports for more than a week, industry members said.

U.S. beef supplies tightened after a severe drought and high

grain prices prompted ranchers to sell off their cattle,

shrinking the nation's herd to the lowest level in decades.

The decline in cattle numbers led to soaring U.S. beef

prices and a flurry of cheaper imports. Beef imports from

Australia jumped 72% through July this year, according to U.S.

Department of Agriculture data. Imports from New Zealand and

Brazil have also increased.

In anticipation of the strike, suppliers to U.S. grocers and

fast food restaurants ramped up imports of frozen lean beef that

is mixed with domestic supplies to make hamburger meat, three

industry members said.

Dan Sorbello, who imports beef into the Ports of

Philadelphia and Houston, said he unloaded containers from

vessels more quickly than normal ahead of the strike to make

sure he could take possession of the meat and distribute it.

"We've got ourselves maybe a week's worth of lifeline," said

Sorbello, principal for Sorbello Refrigerated Services.

SURF AND TURF

PanaPesca USA LLC, which imports and exports seafood, also

stocked up on extra supplies of squid and shellfish to meet its

customers' needs ahead of the strike, said chief commercial

officer Eric Buckner.

Much of PanaPesca's product in freezer freight containers

arrived, but some is still stuck on ships now 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 for

companies that import beef.

"All of a sudden, fast food chains that have been relying on

much more reasonably priced lean meat from overseas 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 may be passed on to consumers, analysts

said. Shipments of refrigerated fresh meat, which can be used in

restaurant dishes like fajitas, risk spoiling, they said.

U.S. retail prices for ground beef in August reached a

record high of $5.58 per pound, according to the latest

available federal data.

For the U.S. chicken industry, which relies on exports, the

strike is also ill-timed, said Matt Busardo, commodity

information firm Expana's team lead for U.S. poultry.

Domestic demand is waning as consumers switch to eating

cold-weather meals like pot roast and chili, instead of grilling

chicken, he said. The sector relies on ports such as Savannah to

export leg quarters and drumsticks to countries including Angola

and Cuba.