American Meat Is Getting Pricier on Processing-Plant Shutdowns
Shutdowns at U.S. Meat Plants Spur Surge in Pork and Beef Prices
The coronavirus that has killed several workers and sickened hundreds of others at U.S. meat plants is raising concerns of a shortfall in pork and beef at grocery stores.
As some slaughterhouses halt or slow output and buyers brace for more disruptions, meat prices are surging.
“This is sending wholesale prices sharply higher and will result in a noticeable reduction in supply for the consumer,” said Cassie Fish, an Omaha, Nebraska-based livestock market strategist.
Smithfield Foods Inc., the world’s biggest pork producer, indefinitely shut down a slaughter plant in South Dakota this week after hundreds of workers tested positive for Covid-19. The plant typically accounted for 4% to 5% of total hog processing in the U.S.
Two people who worked at a Tyson Foods Inc. pork plant in Iowa died and two dozen are ill, with operations down. Three people died who worked at a Tyson poultry plant in Georgia. A worker at a Cargill Inc. plant in Colorado also died. JBS USA delayed the reopening of a Pennsylvania beef plant from Thursday to Monday.
The companies are working with government officials on cleaning and testing to ensure they safely produce food and protect workers. But the disruptions mean less meat, at least short term.
The slaughter-plant closures are the latest injection of volatility in food markets in the coronavirus era. Shifting consumer buying patterns and closed restaurants has upended the supply chain, resulting in surging prices for goods like eggs but also prompted farmers to dump milk and vegetables due to lost markets.
“When you have a reduction in the slaughter like we’re having right now, we are going to have a jump in the cut-out values,” said Brian Hoops, senior market analyst at Midwest Market Solutions in Springfield, Missouri, said by telephone.
Wholesale pork posted the biggest back-to-back gain in more than two years, rising 15% to 60.13 cents a pound. Last week, pork prices fell to the lowest since 2009, U.S. Department of Agriculture data show. Choice-grade beef prices climbed six straight days through Thursday, rising to $2.36 a pound, a one-month high.
©2020 Bloomberg L.P.