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Virus expected to reduce meat selection, raise prices

DES
MOINES, Iowa (AP) — Meat isn’t going to disappear from supermarkets
because of outbreaks of the coronavirus among workers at U.S.
slaughterhouses. But as the meat plants struggle to remain open,
consumers could face less selection and slightly higher prices.

Industry
leaders acknowledge that the U.S. food chain has rarely been so
stressed and that no one is sure about the future, even as they try to
dispel concerns about shortages.

On Sunday, the meat processing
giant Tyson Foods ran a full-page advertisement in the New York Times
and other newspapers outlining the difficulty of producing meat while
keeping more than 100,000 workers safe and shutting some plants.

“This
means one thing — the food supply chain is vulnerable,” the statement
said. “As pork, beef and chicken plants are being forced to close, even
for short periods of time, millions of pounds of meat will disappear
from the supply chain.”

Company spokesman Gary Mickelson said the Tyson family thought it was important to explain their perspective.

“The
letter encourages government leaders to unite to address food supply
chain challenges,” Mickelson said. “We are taking a proactive approach
to balance safety and production by moving aggressively with testing and
plant closures when necessary.”

COVID-19, the disease caused by
the virus, has infected hundreds of workers at meat-processing plants
and forced some of the largest to close and others to slow production.
While the output at beef and poultry plants has diminished, pork plants
in the Midwest have been hit especially hard. The viral outbreaks have
persisted despite efforts by the meat companies to keep workers at home
with pay if they become sick.

The 15 largest pork-packing plants
account for 60 percent of all pork processed, so when even one of those
plants closes for days or weeks, the consequences ripple across the
industry. That has become abundantly clear with two of the nation’s
biggest plants now closed: Tyson suspended operations at its plant in
Waterloo, Iowa. And Smithfield Foods halted production at its plant in
Sioux Falls, South Dakota. Each plant can butcher nearly 20,000 hogs a
day. Some plants have reopened days after cleaning.

The result is
that the nation’s pork processing capacity had declined by about 25% as
of last week, said Steve Meyer, an industry economist with Kerns and
Associates in Ames, Iowa.

Sarah Little, a spokeswoman for the
North American Meat Institute, an industry trade group, said: “It’s down
across the board right now, so the next couple of weeks we should see
how the system works. It’s never been tested like this before.”

A
beef production plant in Green Bay, Wisconsin, is the latest to shut
down because of infections among employees. JBS USA said the JBS
Packerland plant, which employs 1,200, would be closed temporarily. As
of Monday, 255 employees at the plant tested positive for COVID-19, said
Claire Paprocki, a spokeswoman for the county health department.

Nationally,
although the reduced meat supply is expected to cause consumer prices
to rise, expectations are that the increases will be slight. The U.S.
Department of Agriculture said late last week that it expects beef
prices to climb 1% to 2% this year, poultry as much as 1.5% and pork
between by from 2% and 3%.

The agency acknowledged that consumer
buying patterns change weekly and that some products face supply-chain
disruptions that could affect prices. But the USDA said its planned $3
billion purchase of fresh produce, dairy and meat should help stabilize
prices. The government will work with food distributors to provide the
purchased products to food banks, community and faith-based
organizations and other nonprofits serving the needy.

The United
Food and Commercial Workers International Union, which represents 1.3
million food and retail workers, said last week that 13 U.S.
food-processing and meatpacking union workers in the U.S. have died and
that an estimated 5,000 are sick or have been exposed to the virus while
working near someone who tested positive.

Marc Perrone, the union
president, said 13 plants in Indiana, Iowa, Minnesota, Missouri,
Pennsylvania, South Dakota and Wisconsin and Alberta, Canada, have been
closed at least temporarily because of the pandemic. Those union plants
represent about 10 percent of beef production and 25 percent of pork
production, the union said.

The union is urging state and federal
officials to ensure that workers have access to protective equipment,
mandate social distancing at work and halt federal waivers that allow
faster line speeds.

Many employees of the meatpacking plants fear
going to work, said Margarita Heredia, who has worked at the JBS pork
processing plant in Marshalltown, Iowa, for 11 years. She joined a UFCW
union call with reporters to discuss the pandemic’s effects on workers.

Heredia
credited the company with improving sanitation, including treating
hallways and common areas with bleach and placing hand sanitizer
stations around the plant. JBS also now takes workers’ temperatures and
encourages those who are sick to stay home. But she said the company
increased pay by $4 an hour from April 20 through May as an incentive
for healthy employees to go to work.

“Even then, we’re still shorthanded, but we are trying to do our best,” she said.

The
national slowdown in meat processing has surfaced in federal
statistics. The daily cattle slaughter for the week of April 13 fell
nearly 24 percent from the same period a year ago. Pig slaughter was
down 13 percent. And given the most recent plant closures, those figures
have likely fallen further.

So far, the meat-processing industry
has been able to shift production to open plants to keep a stream of
meat moving through the supply chain, said Little, of the meat
institute. Some plants that closed have reopened after deep cleanings.

“When one plant goes off-line, the others in the region can try and pick up the slack,” Little said.

The
situation would be more dire if not for record amounts of meat in cold
storage, though much of the meat was intended for restaurants that now
are largely closed.

The USDA last week reported 921 million pounds
of chicken in storage and 467 million pounds of boneless beef,
including hamburger, roasts and steaks. Before much of that meat could
be sold at markets, it would need to be repackaged because restaurants
buy in greater bulk than individuals. Some of the meat would need to be
cut by grocery store meat cutters and packaged for customers to take
home.

In late March, the USDA eased restrictions to allow for meat
that had been intended for commercial food use to be diverted into the
grocery store channels for consumers The industry sought these changes
in mid-March after brief meat shortages caused by the coronavirus panic
sent people scurrying to grocery stores.

Industry reports indicate
that fresh pork purchases surged 102 percent for the week ending March
22 compared with the same period a year earlier. Beef sales were up 91
percent. Chicken purchases grew by about 71 percent earlier in March
before slowing. Still, chicken, pork and beef purchases are still about
30 percent above year ago levels in recent reports.

“By and large, there’s been enough food,” said Jayson Lusk, an economist at Purdue University. “You might not get your exact variety that you want or the exact type you want, but there’s been food available if you have the money to buy it.”

This story was corrected to reflect that UFCW union officials said 13 food processing and meatpacking workers have died.