The Journal Gazette
Tuesday, April 14, 2020 1:00 am

Virus hampering meat supply

As plants close with ill workers, prices could rise

JOSH FUNK | Associated Press

OMAHA, Neb. – Some massive meat processing plants have closed at least temporarily because their workers were sickened by the new coronavirus, raising concerns that there could soon be shortages of beef, pork and poultry in supermarkets.

The meat supply chain is especially vulnerable since processing is increasingly done at massive plants that butcher tens of thousands of animals daily, so the closure of even a few big ones can quickly be felt by customers. For instance, a Smithfield Foods plant that was forced to close in Sioux Falls, South Dakota, after nearly 300 of the plant's 3,700 workers tested positive for the virus produces roughly 5% of the U.S. pork supply each day.

In addition, conditions at plants can be ripe for exploitation by the virus: Workers stand shoulder-to-shoulder on the line and crowd into locker rooms to change their clothes before and after shifts.

The virus has infected hundreds of workers at plants in Colorado, South Dakota, Iowa, Pennsylvania, Mississippi and elsewhere. The capacity of plants that remain open has also been hurt by workers who are sick or staying home because of fears of illness – though it's not clear by how much.

While company owners promise to deep clean their plants and resume operations as quickly as possible, it's difficult to keep workers healthy given how closely they work together.

“There is no social distance that is possible when you are either working on the slaughter line or in a processing assignment,” said Paula Schelling, acting chairwoman for the food inspectors union in the American Federation of Government Employees.

The reduced production so far has been offset by the significant amount of meat that was in cold storage, said Glynn Tonsor, an agricultural economist at Kansas State University. Producers are also working to shift meat that would have gone to now-closed restaurants over to grocery stores.

Whether shoppers start to see more empty shelves or higher prices will depend on how many plants close and for how long.

At least half a dozen plants have closed temporarily, but that's across the pork, chicken and beef sectors, and Tonsor said the industry can manage for now.

“You could shut multiple plants down for a day or two, and we've got wiggle room to handle that,” Tonsor said. “But if you took four or five of those big plants ... and they had to be down for two weeks, then you've got a game changer.”

Still, the reduced meat processing capacity is already driving down the prices farmers and ranchers receive for cattle, hogs and chickens.

“It's like people on an escalator. Stopping the pork chain at the top of an escalator is just going to cause all sorts of tragedy and disaster all the way back up the system,” said Dermot Hayes, professor of economics and finance at Iowa State University.

Farmers are being forced to kill baby pigs because the space in the barns where they were supposed to go is still filled by the pigs that should have been slaughtered last week, Hayes said. The meat from those baby pigs cannot be sold.

That has driven prices for those feeder pigs – which generally are fattened over the course of six months – to zero, Hayes said. The value of those big enough for the market is down about 50% from a month ago. The value of the meat is down about 30%.

Lower prices for producers could mean higher prices for consumers eventually, if production falls off, according to Chad Hart, an agricultural economist at Iowa State University.

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