COVID-19 To Cause Further Disruptions To The Meat Supply Chain
As the coronavirus continues to impact and disrupt industries around the world, experts have advised that now could be a good time for people to stock up on meat.
Meat packing plants around the U.S. have been forced into closures, as the pandemic continues to strain the industry that has already seen so much disruption. The concern that follows these closures is that potential shortages have become almost inevitable now. Dennis Smith of Archer Financial Services said “Meat shortages will be occurring two weeks from now in the retail outlets. There is simply no spot pork available. The big box stores will get their needs met, many others will not.”
Following the outbreak of more than 180 COVID-19 cases, Tyson Foods made the decision to close its largest pork facility in Waterloo, Iowa. The plant, which employs 2,800, processes 19,500 hogs a day. Steve Stouffer, the group president of Tyson Fresh Meats, stated that a combination of worker absenteeism, COVID-19 cases and community concerns led to the difficult decision to close down production.
The disruptions throughout the meat supply chain are reportedly causing strange dislocations for prices throughout the network. Bloomberg has reported that finished products prices are surging, whilst farmers are being paid significantly lower prices for livestock.
This shutdown is not the first in the U.S. meat supply chain. Last week, Smithfield Foods closed its pork processing plant in Sioux Falls, South Dakota. The facility, one of the largest in the nation, produces 4-5% of the pork in the U.S., and was closed following the positive testing of 293 employees. Smithfield Foods’ CEO, Kenneth Sullivan, stated his concern for the nation’s meat supply, with it being impossible to stock grocery stores if plants are closed down.
The number of positive cases from Smithfield Foods’ South Dakota plant is now closer to 900. The issue inside facilities such as these is that social distancing is impossible, with the vast majority of workers spending their entire days in close proximity to each other, making it very easy for the virus to spread. One employee said “We are very close. We can’t use a social distance at that place.”
JBS, the world’s leading meat company, also made the decision to close its Minnesota-based pork factory earlier this week. Seven workers tested positive for COVID-19, but the number is expected to rise in the coming days due to the exposure employees experienced without realising. As animals continue to remain stuck at feedlots, prices in grocery stores will continue to rise and the number of shortages will also continue to increase.
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.