COVID-19 Impact on Meat Packing Industry and Food Supply Chains

Large-scale meat packing plants have become one of the nation’s hotspots for contracting coronavirus, leading to temporary closures of major meat factories as workers fall ill. Due to the pitfalls of high market concentration in the meat processing industry, the United States is experiencing a disruption in the food supply chain, from the farmers who cannot sell their livestock to factories all the way to consumers where grocery stores are limiting the amount of meat people can buy.

Around 50 meat processing plants controlled by only four large companies, Tyson, JBS USA, Cargill, and Smithfield Foods account for 98 percent of the nation’s meat slaughter and processing. To alleviate the strain on the meat supply chain, President Trump issued an executive order designating packing factories as “critical infrastructure”. However, the executive order is having a limited effect as it failed to impose adequate health and safety measures to protect the health of workers, leading to mass absenteeism and the resulting slowdown in production.

According to the Centers for Disease Control and Prevention, 4,913 cases of COVID-19 have been reported at 115 meat and poultry processing facilities in the U.S. as of April 30, and 20 workers have died of the disease. Data collected by the Food & Environment Reporting Network up to May 21 estimates 70 worker deaths and at least 18,330 infected.

By late April, meat production fell by 20%, and Tyson’s Food estimates that national pork production has dropped by 50% up to May. In the short term meat supply has been kept up by farmers who are diverting their meat products to grocery stores, and meat supplies that would normally go to the restaurant industry. But consumers are feeling the pinch as meat prices had gone up by 8.1% at the end of April, and projected to climb 20% over the coming months as the meat industry grapples with the longer term repercussions on the industry.

A decline in production is causing a backlog in food supply as many animals will have to be euthanized because they are not being sent to the major factories for packing. The National Cattlemen’s Beef Association estimates that the cattle industry could see losses of $13.6 billion.  Government assistance for the agriculture sector includes $16 billion from USDA for farmers impacted by COVID-19. An additional $3 billion will be spent on food commodity purchases from producers, including beef, pork, dairy, fruits and vegetables. But this will be insufficient to counter the losses that will be felt across the meat industry.

Smaller and local farmers/meat producers are seeing an uptick in demand as consumers fear heading to grocery stores or the possibility of their meat coming from a COVID-19 infected packaging facility. Alternatively, consumers have turned to plant-based and meat substitutes to fulfil some of their meat shortages, with consumption of these products jumping 264% through to May 2. Customers are also able to buy in bulk from local meat producers as there are not restrictions on how much can be bought. While this may be good in the short term, farmers are still seeing major revenue losses from being unable to sell their meat to large scale factories. 


Website by Accrisoft