Aussie beef in US backlog
A protracted US port dispute has caused a backlog of Australian beef, yet to be unloaded at West coast ports.
The conflict between unions and port authorities peaked in early February, with 29 ports shutting down for more than two days, the result of more than nine months of bitter fighting between the groups.
Port production has suffered dearly as a result of the dispute, stripping a whopping US$375 million from the annual bottom line across the $1 trillion dollar chain of ports.
Australian beef exporters have been left exposed, with thousands of tonnes of beef still waiting to be unloaded from ships.
The cost impact on the US economy as a result of the lost production is expected to be more than US$375 million.
US authorities predict the sheer volume of imports and exports needing to be cleared at the ports will mean backlogs will remain for the immediate future.
Australian beef exports to the US have more than doubled in the past 12 months, which industry analysts have attributed as a function of record prices for grinding beef in the US, a strong US dollar and record slaughter numbers.
According to US Customs data, the US imported 45,000 tonnes of predominantly manufacturing beef from Australia, including about 2200 tonnes for grinding beef from WA, last year.
Meat and Livestock Australia said about one-third of the country's red meat exports to the US had gone through the West coast.
An MLA spokeswoman said a resolution of the labour dispute had been reached and some small delays had been felt in customs clearance, but a large proportion of long shelf-life frozen product would have allowed for some delays.
"Australian chilled exports in some specific cases were more affected as product couldn't get through to some customers on time, forcing the freezing down of some product and missed deliveries," she said.
"This forced a number of actions, that included redirecting to the east coast ports (impacting storage space availability over there), or increased air freights, adding substantial cost.
"It is hoped that these problems will abate in coming weeks. However, values may take a little time to recover as the backlog of frozen product is moved through."
The spokeswoman said aside from volumes, one of the potential impacts on prices was reportedly that a large volume of US beef (and other meat) was redirected from export markets back into the domestic market, as it could not clear some west coast ports.
"However, at the same time, at the height of the port issues, there was a large slowdown in US foodservice demand (of which Australian beef is a large supplier) due to particularly cold weather (blizzards) in the north-east of the US," she said.
"This would have had more of a direct impact on volumes and prices as previously purchased beef have taken longer than normal to move through the supply chain."
Esperance cattle producer Wes Graham said the port disruption showed events in supply chains beyond growers' control could impact on the industry.
"There is no perfect system, with a world-class port system still open for disruption," he said.
"This sort of thing in this market hasn't been a big problem before, so it shows that it is critical for the industry to diversify its markets and spread the risk as much as possible."
