U.S. meatpacking industry supply chain strained by COVID-19

14 May 2020

The coronavirus has spread rapidly within U.S. meatpacking facilities affecting both workers as well as United States Department of Agriculture (USDA) inspectors. The result of the proliferation of infections is that over 20 major meatpacking plants have been closed within the country, including Tyson Foods, JBS USA, Smithfield Foods and Cargill facilities​.

With prolonged facility closures curtailing production, companies are warning of meat shortages and prices are started to skyrocket.

U.S. meatpacking industry supply chain strained by COVID-19

This tightrope that companies are having to walk between continuing to process meat and ensuring the safety of the workforce has caused friction with many advocates and unions criticizing the industry’s response to the pandemic saying they waited too long to implement safety precautions. At the same time, there is mounting pressure for the plants to reopen.

In response to the concerns about the meat supply in the United States, President Donald Trump declared meat processing plants “critical infrastructure.” On April 29 he signed an order employing the Defense Production Act to keep plants open.

Even with this order, some plants remain closed, and this continued reduced capacity could have far-reaching effects for the county. A report from CoBank said that the supermarket meat supply may drop 30% by May 25 and result in 20% price hikes for beef and pork. Already, the pork supply has dropped 40% since mid-Mark, according to USDA data.

Major meat companies are worried. Tyson Foods’ chairman John Tyson took out a full-page advertisement in major American newspapers where he said, “The food supply chain is breaking." He said that the supply of meat will be reduced by "millions of pounds" and that unprocessed animals will become food waste.

Already, the effects can be seen as far down the supply chain as the farmers. Chicken and hog farmers have been forced to euthanize animals due to a lack of processing capacity. This waste translates to an estimated $5 billion in losses for the industry, according to economists from Iowa State University.

For consumers, the most immediate effect is on meat prices, which has shot up in the last several weeks. According to USDA data reported in the Wall Street Journal, wholesale prices of ground beef have tripled since early March.

Companies are also afflicted financially. While the meat processing industry continues to work toward a solution, earnings statements for meatpackers and protein companies will continue to suffer.

Related categories

Related tags

Market News

Related news

JBS: Cyber-attack hits world's largest meat supplier

JBS: Cyber-attack hits world's largest meat supplier

10 Jun 2021

Last week, the world’s largest meat supplier, JBS, experienced a cyberattack that temporarily shut down some of its operations in Australia, Canada and the U.S., leading to fears of a meat shortage. In the days following the attack, the Brazilian meat ...

Read more 
Fortuna Cools develops sustainable coolers made from coconut husks

Fortuna Cools develops sustainable coolers made from coconut husks

9 Jun 2021

Filipino startup Fortuna Cools announced the closure of a seed funding round led by the investment arm of the Asian Development Bank ADB Ventures and Katapult Ocean Fund with additional participation from Pasudeco Development Corporation, the Manila An...

Read more 
Cultivated meat firm Magic Valley to be first in cultivated lamb

Cultivated meat firm Magic Valley to be first in cultivated lamb

8 Jun 2021

Australian-based startup, Magic Valley is the “world’s first cultured lamb company,” according to a press release from the company. This startup is working to cultivate lamb protein using animal cells grown in a nutrient-rich culture but without the us...

Read more 
Frozen food and e-commerce emerge as Asia’s COVID-19 retail winners

Frozen food and e-commerce emerge as Asia’s COVID-19 retail winners

7 Jun 2021

Frozen food and e-commerce channels have been two of the food industry success stories to emerge from the COVID-19 pandemic and nation-wide lockdowns that triggered significant shifts in shoppers’ behaviour in Asian markets.

Read more 
Nestlé’s Sweet Earth moves into snacking aisle with plant-based jerky

Nestlé’s Sweet Earth moves into snacking aisle with plant-based jerky

2 Jun 2021

Nestlé-owned Sweet Earth Foods has a new plant-based jerky on supermarket shelves that come in two flavors: Spicy Kung Pao Jerky and Sweet Korean BBQ. While the Kung Pao flavor is now on sale, the company announced that the Sweet Korean variety will be...

Read more 
European Parliament allows ‘buttery’ adjectives on dairy-free products

European Parliament allows ‘buttery’ adjectives on dairy-free products

28 May 2021

In a u-turn from its policy last fall, the European Parliament dropped Amendment 171 and will allow manufacturers to use descriptive terms like “buttery” and “creamy” to describe plant-based products.

Read more 
Cultured meat startup Eat Just gets $170M

Cultured meat startup Eat Just gets $170M

27 May 2021

Eat Just announced its Good Meat division, which is responsible for producing the world’s first commercially-available cultured meat product, received $170 million in funding from UBS O’Connor, Graphene Ventures and K3 Ventures. With this influx in fun...

Read more 
Plant-based chicken maker Daring raises $40M in latest funding round

Plant-based chicken maker Daring raises $40M in latest funding round

26 May 2021

Plant-based chicken making Daring announced it closed a $40 million Series B funding round led by D1 Capital Partners. Additional participation came from Canadian rapper Drake as well as existing investors Maveron and Palm Tree Crew. This funding round...

Read more 
Access in the spotlight this World Hunger Day

Access in the spotlight this World Hunger Day

21 May 2021

The Hunger Project has made huge progress in reducing global hunger, but Covid-19 has worsened poverty and limited food availability in many communities. This World Hunger Day, the focus is on access – to food, but also to essential resources like educ...

Read more 
Equinom and Dipasa partner to produce a high-protein sesame seed

Equinom and Dipasa partner to produce a high-protein sesame seed

20 May 2021

Israeli plant-based nutrition company Equinom teamed up with Mexican sesame processor Dipasa to create a high-protein sesame concentrate. Equinom will use its AI technology to develop the new variety while Dipasa will process it and deliver it to the m...

Read more