Shoppers could see meat shortages in the near future as a result of food supply chain disruptions caused by the coronavirus.
In a stark warning, the chairman of Tyson's Foods, the country's second-largest meat producer, said he anticipated "meat shortages" stemming from the recent shutdown of processing plants.
Millions of pounds of meat will not make it to market, John Tyson wrote in a blog post this weekend. "As a result, there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed."
More than a dozen major U.S. meat processing plants have shut their doors because of coronavirus outbreaks. The closures have sent a shockwave through farmers, truckers and distributors and it is expected to hit grocery stores and consumers next.
"The supply chain is breaking," Tyson wrote.
In the past week, Tyson's announced the closure of two pork processing plants and a beef processing plant after hundreds of employees contracted the coronavirus.
Some plants have closed temporarily to test workers and could potentially reopen within one or two weeks. Others will remain closed until the company is able to guarantee worker safety. All of the company's meat and poultry plants are currently operating at reduced levels of production.
Tyson's Waterloo, Iowa facility, the single largest pork plant in the United States, suspended operations indefinitely last Wednesday. The plant processed 19,500 hogs per day, accounting for roughly 4% of the total U.S. pork processing capacity, according to Tyson's.
"Consumers will see an impact at the grocery store as production slows," explained Steve Stouffer, group president of Tyson Fresh Meats.
The spread of the coronavirus throughout meat processing plants has caused other large companies to shut their doors, including Smithfield Food, JBS SA and Cargill. As of April 24, roughly 25% of U.S. beef packing capacity and 30% of pork capacity was offline.
Amid the closures and threats to the food supply chain, President Donald Trump is expected to order meat processing plants to remain open. Trump is expected to use the Defense Production Act to classify meat processing as critical infrastructure, The Associated Press reported Tuesday.
FOR CONSUMERS: LESS VARIETY, SHORTAGES, PRICE INCREASES
Producers did not specify what consumers should expect to experience at the grocery stores as millions of pounds of meat are removed from the supply chain.
The National Grocer's Association, whose members have already been on the front end of supply chain disruptions, said it is closely monitoring the situation with respect to meat availability.
The NGA acknowledged that pork, eggs and dairy have already been impacted by heavy demand and supply chain disruptions. "These challenges may cause moments when specific desired products are intermittently unavailable, and customers may not see the wide assortment they are accustomed to or find a limited variety, but we are confident that will only be a temporary situation," said Laura Strange, spokesperson for the NGA.
Reducing the variety of goods available may be the only way to handle the capacity and labor shortage among meat processors, explained Dr. Arzum Akkas an expert in food supply chains and professor at Boston University's Questrom School of Business.
It takes more time and more labor to produce a variety of cuts of meat American consumers have come to expect. "If you reduce labor...you can generate the same output in weight of meat, not in terms of the number and choice of different cuts," Akkas said.
There is also the possibility that consumers will see meat shortages due to panic-buying. Earlier in the crisis, consumers cleared out grocery staples, including meat, resulting in chronically empty shelves. The news of packing plant shutdowns and meat shortages may spur another round of panic-buying, Akkas suggested.
Food prices have already started to creep up for consumers and further market disruptions will likely cause prices to continue rising. In March, the U.S. Department of Agriculture marked a 1.1% increase in grocery store food items over the same time last year. The Bureau of Labor Statistics reported a 7-8% increase in prices for some beef and pork products between March 2019 and March 2020.
EFFECTS ON FARMERS, RANCHERS: DESTROYING LIVESTOCK
The cruel irony of the meat shortage is that there is no shortage of meat.
"Are we going to run out of food? No," said Dale Moore, the executive vice president of the American Farm Bureau Federation. "We know our farmers and ranchers can produce the food... What we are running into are the supply chain issues."
Farmers and ranchers have continued to raise livestock to meet pre-coronavirus demand. The supply has continued to build but the slaughterhouse closures have created a devastating chink in the food supply chain.
U.S. meat plants are operating at 60% of normal capacity, according to Dave Amato, the head of the Commodity Futures Trading Commission’s (CFTC) Livestock Market Task Force. For hog farmers, that has led to a backup of approximately 400,000 hogs per week.
With no other option, farmers have started euthanizing having to euthanize stocks of pigs, cows and chickens. Hog farmers in Iowa resorted to injecting pregnant sows to force abortions, Reuters reported. Because they can't ship the grown hogs to the pork processing plants and they don't have enough room for the animals, they are forced to humanely euthanize piglets and bury them.
Last week, farmers in Maryland and Delaware associated with the Delmarva Poultry Industry euthanized nearly 2 million chickens because of low demand and processing problems.
Disruptions in the supply chain and limited storage space have also resulted in farmers dumping millions of pounds of produce and thousands of gallons of fresh milk.
"Nothing bothers a farmer or rancher more than having to destroy something that he or she spent time, energy and resources into raising that is destined to feed someone," Moore noted.
The federal government has intervened to offer relief to farmers and ranchers who have lost their markets. The CARES Act including $19 billion to provide immediate relief to farmers and ranchers and to help maintain the food supply chain.
Much of that aid is still a long way away. On a conference call with the CFCT last week, Agriculture Secretary Sonny Perdue said the $16 billion in direct support to farmers would not be available until late May. The $3 billion program to connect farmers to foodbanks and transport their goods.
WHY IT'S BREAKING DOWN: HEALTH
About 22 meat processing plants have been shut down over the past month, according to some estimates. The tightly spaced, high-occupancy meat processing plants have become hotbeds for coronavirus outbreaks in several states.
Large modern meat processing plants can have up to 1,000 workers per shift, standing between 2 to 4 feet apart.
Over the weekend, Wisconsin health authorities reported more than 400 coronavirus cases stemming from three separate meat processing plants in Brown County. More than half of the infections came from a JBS facility in Green Bay.
In Iowa, Gov. Kim Reynolds came under pressure to shut down the state's meat processing plants after a spike in coronavirus cases last week. In a single day, two-thirds of the state's cases were traced to Tyson's Waterloo facility and a National Beef beef plant. The governor has left the decision to close plants up to individual companies.
According to the United Food and Commercial Workers International Union (UFCW), at least ten meatpacking workers and three food processing workers have died from COVID-19. Another 5,000 meatpackers and 1,500 food processors have become ill, are awaiting test results or have missed work due to self-quarantine.
U.S. food processing and meatpacking workers are in "extreme danger," the union stated, warning that "our nation's food supply faces a direct threat from the coronavirus outbreak."
In a letter to the White House, the UFCW called on the coronavirus task force to adopt safety measures to protect meatpackers and processors. Specifically, the union cited working conditions that did not allow workers to maintain 6 feet of social distancing, a lack of personal protective equipment and a need to prioritize testing for people in the industry.
On Tuesday, the UFCW responded to reports that President Trump would soon order to keep meatpacking plants to remain open. The union reiterated its call for the federal government to establish "clear and enforceable safety standards" for the industry, aimed at protecting workers.
Smithfield denied accusations that its employees were forced to report to work when they were sick and said it had raised workers' wages by $3 per hour during the pandemic. It also shot down allegations that it failed to provide masks to workers, explaining the supplies "were not readily available."
In a press statement, Smithfield argued it had been presented with an "impossible choice" to either "continue to operate to sustain our nation’s food supply or shutter in an attempt to entirely insulate our employees from risk."
Tyson's is reportedly monitoring employees' health by taking temperatures and requiring workers to wear face coverings. They have also implemented plastic dividers between work stations.
JBS is also implementing temperature testing and providing extra personal protective equipment for its workers.