U.S. meat processing plant infected with severe fresh meat shortage prices

EST on May 15th, an outbreak of new coronavirus pneumonia hit the U.S. meat processing industry, causing a series of problems, such as the closure of local meat processing plants, the inability to stabilize the supply of meat, and higher prices for some fresh meat. Overall retail prices of fresh meat, including beef, pork and poultry, rose about 8.1 per cent year-on-year, according to the latest Nielsen data.

Major meat processing plants closed in the midst of the outbreak.

In the United States, meat farms and slaughterhouses are usually operated separately. The outbreak of the new corona virus has caused a shortage of manpower in meat processing plants, a large number of food animals can not be treated, resulting in long-term food supply chain worries. According to the food and environmental reporting network, the nonprofit Food and Environment Reporting Network, 206 meat and food processing plants have confirmed cases of new coronary pneumonia, with more than 15,000 workers testing positive for meat processing and food processing plants and killing at least 60 workers.

Meat processing in the U.S. is concentrated in a handful of factories controlled by four large factories, Tyson Foods, Shuanghui’s Smithfield Foods inc. and JBS USA Holdings Inc. and Cargill. Because meat processing plants require a dense workforce and are conducted in tight spaces, the rate of coronavirus transmission in counties and cities where large U.S. beef or pork processing plants are located is more than twice the national average. In the past two months, at least 30 plants have been suspended and dozens more have been reduced.

U.S. meat processing plant infected with severe fresh meat shortage prices

Pictured is the Tyson company meat treatment site where it has been treated in isolation

On April 26th Tyson Foods placed a full-page advertisement in the New York Times and other major media, warning that the U.S. “food supply chain is being disrupted”, an unusual, distress-sending move that also raised alarm bells about the entire U.S. food chain in the new corona. Two days later, President Trump issued an executive order declaring meat processing plants “critical infrastructure” and trying to keep workers working, but also met with protests from some unions. Considering that the safety of life is more important, operators in the helpless can only let some workers stay at home.

U.S. meat processing plant infected with severe fresh meat shortage prices

Pictured is Tyson’s long-posted official picture

Meat prices rise due to the closure of large meat processing plants

In this case, the large number of temporary closures of meat processing plants is a direct result of consumers facing the problem of meat prices. Consumers will find that even if some meats are still available, prices have risen to varying degrees. Victor Colello, director of meat and seafood at Morton Williams, which has 14 stores in Manhattan, said its stores were “well-stocked” because of previous relationships with suppliers, but had already seen seven price increases in the past two weeks. Steaks are now priced at $18.99 a pound, $14.99 a pound two weeks ago, and pork has risen $2 to $6.99 a pound. Overall retail prices of fresh meat, including beef, pork and poultry, rose about 8.1 per cent year-on-year, according to Nielsen.

The shortage of workers caused by the outbreak has not caused severe disruption to the meat supply, but in the long run, the food supply for meat is also a serious problem. Daniel A. Sumner, director of the Center for Agricultural Issues at the University of California. “That doesn’t mean there’s a real shortage of meat, after all, farmers are still raising cattle and pigs in large numbers, but I wouldn’t be surprised if the burgers in a supermarket chain sold out in the afternoon, ” says Sumner. “

So, if you go to Wendy’s, a food restaurant, to buy beef burgers now, it’s easy to run into a shortage of stock. About 1,000 (18%) of Wendy’s 5,500 U.S. restaurants don’t serve burgers or other meats, according to an analysis of online menus across the U.S. by Stephens, a financial firm. The report says Wendy’s is more vulnerable to shortages caused by coronavirus because it is more dependent on fresh beef than its competitors.

U.S. meat processing plant infected with severe fresh meat shortage prices

Pictured is Wendy’s beef out-of-stock logo

Supply chain disruption caused by a chain reaction

The chain reaction of the closure of the meat processing plant has led to severe supply chain disruption: on the one hand, the price of pork and beef has soared, and on the other, farmers who have nowhere to sell pigs and cattle have been slaughtered. Because U.S. meat processing has developed to highly industrialized levels and workers are so close to each other that the outbreak could easily scale up. The lack of workers has made the plant’s assembly lines slower, which means less meat entering the market, and farmers’ costs rising if they continue to feed. And if you’re overweight, farm animals won’t be sent to the meat processing line, and they can only be euthanized to reduce economic stress.

Research by Jason Lusk, an agricultural economist at Purdue University, shows that meat processing capacity in the United States has fallen by about 40 per cent. In the pork industry alone, 200,000 pigs cannot be slaughtered and the factories that process them have closed. Without other changes, 200,000 surplus pigs a day become one million pigs a week, with no other way to do so.

The way out of the epidemic

While large meat processing plants are struggling, small processing plants that supply about 20 percent of meat in the U.S. are doing much better. “Plants in Vermont typically process 45 to 50 cattle, or 130 pigs a day, and the closed Smithfield plant can process 20,000 pigs a day, ” says Mike Lorentz, owner of a small meat processing plant in Vermont. So while some people think that small processing plants like mine can help support the industry’s shortage, small processing plants can’t fill the gap because they are so big. “

The resulting chain reaction also includes an increase in meat exports, particularly to China. Pork exports jumped 40 per cent in the first three months of the year and beef exports rose 9 per cent, according to the Meat Export Federation. Meanwhile, chicken exports grew 8 percent in the first quarter. Meat exported to China and other Asian markets, such as hoofs, noses and visceral sands, is not normally purchased in the United States, while the most popular products in the U.S., including bacon and pork chops, remain in the domestic market, and demand from export markets requires increased U.S. meat production.

In the long run, U.S. meat processing will still suffer significant losses due to the uncertainty of the outbreak. In this chain reaction, some small family farms may be forced to close their businesses permanently. If the new corona outbreak lasts longer, the supply channels of meat processing plants and food service companies may take longer to repair.