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Port Lockout May Reduce Some Food Prices

PULLMAN, Wash. — While the 11-day-old West Coast port lockout is definitely bad news for Washington farmers, the effect on consumers will be mixed at the grocery store.

“Consumers in Washington are going to see two effects,” says Thomas Wahl, director of the Washington State University IMPACT Center. As the crisis deepens, Wahl said consumers may find shortages of imported food products.

But consumers should benefit from lower prices for many food products as domestic producers in the Northwest and California shift product originally intended for the export market to domestic markets.

This will be most noticeable in fresh fruit and vegetables now being harvested.

“In the short run,” Wahl said, “consumers may see prices drop for selected food products.”

At the farm level, producers already are seeing drops in the prices they receive for wheat, apples and pears.

Wahl suggests agricultural exporters should scramble to fin alternative ways of delivering orders even at higher costs. Commodities such as wheat and frozen french fries and apples can be shipped from Gulf ports.

That will substantially increase shipping costs, but Wahl says it may be smart to pay the extra cost to service foreign buyers and retain future market share.

“If you have buyers in Asia who were counting on U.S. apples, you don’t want them to turn to Australia, New Zealand and Europe, or even China,” Wahl said. If they do, they may not readily come back to Northwest growers when the West Coast dock crisis ends.

Even if President George Bush invokes the Taft Hartley Act, forcing an end to the lockout, it may take considerable time for West Coast port operations to normalize, Wahl said. And the threat of another lockout orstrike 80 days later will still hang over the economy.

Economists estimate that port closures could cost the U.S. economy up to $2 billion a day.

At stake is nearly 20 percent of Washington’s $34 billion annual exports that are shipped by vessel. For agricultural products, over 80 percent of Washington’s $3.6 billion are exported through Northwest ports. An estimated $439 million worth of Washington grown wheat is exported by vessel, followed by $263 million apples and $169 million worth of frozen potatoes.

Wahl said annual frozen potato sales shipped through Northwest ports include $83 million to Japan, $13 million to Korea and $10 million to China.

About $206 million worth of meat; $116 million worth of forage products; $96 million worth of vegetables; $28 million worth of hops; $22 million worth of sweet corn and many other commodities are affected.

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