Market Matters Blog
Katie Micik DTN Markets Editor

Monday 11/19/12

PNW Labor Talks: Final Deal on Table

After several months of negotiations that involved bringing in a federal mediator, six grain elevators have presented union officials with their "last, best and final" offer, the AP reports. If the union declines the offer, elevators workers will go on strike.

Details of the deal Pacific Northwest Grain Handlers Association presented to the International Longshore and Warehouse Union (ILWU) have not been released, yet the deal the latest step in saga that's threatened to stall grain movement during the critical post-harvest period.

The union contract expired on Sept. 30, yet ILWU workers agreed to remain on the job through further negotiations. In late October, the two sides brought in a federal mediator to help them reach an agreement.

An issue of fairness is the crux of the dispute. The six grain handlers currently negotiating with unions want a deal similar to one struck by Bunge's EGT terminal and another grain handler last summer. Those deals gained considerable concessions from ILWU workers, including allowing them to fire employees without cause and hire replacement workers in the case of a strike.

The ILWU wasn't happy giving those terms earlier, and it's an issue of competitiveness for the six other handlers. The terms of the deal haven't been made public, and the union hasn't given a timetable for when it will vote on the grain handlers' latest offer.

One fourth of U.S. grain and oilseed exports hang in the balance. Nearly half of U.S. wheat exports, 20% of corn exports and 25% of soybean exports depart from terminals in the PNW. Let's not forget that this year's soybean exports are expected to be front loaded.

Private analytical firm Informa Economics expects PNW elevators to handle more than 1 billion bushels during 2012/13 (September through August), which equates to 29 percent of annual exports during the September-November quarter and 30 percent during December-February.

For now, grain merchandisers across the Northern Plains and upper Midwest will have to wait for the longshoremen to announce whether they'll accept the offer or proceed with a strike, but at least they'll know something definitive soon.

Posted at 11:32AM CST 11/19/12 by Katie Micik
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