Audio: West Coast Port Labor Agreement Welcomed by Asian Meat Buyers

The tentative West Coast port labor contract agreement announced over the weekend certainly came as good news for U.S. meat exporters, who have endured several weeks of shipping delays for beef and pork destined for key Asian markets. Joel Haggard, USMEF senior vice president for the Asia Pacific, says the agreement is also being enthusiastically welcomed by Asian meat buyers.

In the attached audio report, Haggard explains that shipping delays had the most immediate impact on importers of high-value chilled pork and beef, but also created cash flow problems for buyers of frozen meat.

TRANSCRIPT:

Joe Schuele: In this U.S. Meat Export Federation report we peak with Joel Haggard, USMEF senior vice president for the Asia Pacific. He said the tentative contract agreement that has apparently brought an end to the West Coast port labor impasse is being well-received by Asian meat buyers.

Joel Haggard: Resolution of the West Coast port slowdown should be met enthusiastically by Asian buyers of beef and pork – especially those in Japan and Korea where the volumes are quite significant. In 2014, the U.S. exported approximately $2 billion of beef and pork, in chilled form, to Asia. Chilled pork freight alone is worth about $1 billion per year and we see an average of about 1,000 containers of chilled pork being shipped to Japan monthly.

There are some workarounds when there are delays in shipping. Product shipped in chilled form can be frozen down as it crosses the Pacific. But that’s not a desirable option due to the price discount that frozen product has vis-à-vis chilled product. There’s also the option of flying product. That’s a very expensive option, but there were increased air shipments to Japan and some to Korea.

Joe Schuele: While shipping delays create shelf life concerns for importers of chilled beef and pork, Haggard explains why the situation had also become very troubling for buyers of frozen meat.

Joel Haggard: Chilled beef and pork are the most sensitive to any shipping delays. But importers of frozen product, like that for chilled, depend on sales to generate profits but also working capital to purchase more product. And the lack of product flow has meant squeezed cash flows for many importers of U.S. product into Asia. To the extent that squeeze will now be ameliorated by more predictable arrival times, the end of the West Coast port action will be welcomed by all.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.