"It's absolutely unprecedented,"said Brett Stuart,president of Denver-based consulting firm Global AgriTrends."It's a lose-lose situation where we have producers at the risk of losing everything and consumers at the risk of paying higher prices. Restaurants in a week could be out of fresh ground beef."
Meat prices are surging on the supply disruptions. US wholesale beef has surged to a record,and wholesale pork soared almost 30 per cent last week.
Jersey Mike's Franchise Systems,which has 1750 stores across the US,is working with its ham supplier Clemens Food Group to ensure its supply of pork,something they sell quite a bit of in their sub sandwiches.
"We're backing it up already because of the coming — we feel — the coming shortages,"said Peter Cancro,chief executive officer.
To be sure,some plants have restarted after testing workers and improving conditions,and most Brazilian facilities are still operating. Another point to consider:there haven't yet been big shutdowns in Europe. The European Union accounts for about a fifth of global meat exports,US government data show.
It should be noted that the output from a plant where infection pops up doesn't pose health concerns because by all accounts COVID-19 isn't a food-borne illness. Products from a farm or a production plant with a confirmed case can still be sent out for distribution.
But a production halt means that there are no new supplies.
And these shutdowns are happening at a time when global meat supplies were already tight. China,the world's top pork producer,has been battling an outbreak of African swine fever,which destroyed millions of the country's pigs. Plus the virus is hitting production after some meat companies had already taken steps to slow output because of the closure of restaurants around the world.
Inventories can provide some cushion,though they may not last long.
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Total American meat supplies in cold-storage facilities are equal to roughly two weeks of production. With most plant shutdowns lasting about 14 days for safety reasons,that further underscores the potential for deficits.
Meanwhile,plants are also facing a labour crunch as employees fall ill. It's been reported that a large chicken-processing company was forced to kill 2 million of its birds earlier this month because of worker shortages.
The US Department of Agriculture announced it would establish a"coordination centre"to help livestock and poultry producers hurt by plant closures.
The USDA's Animal and Plant Health Inspection Service will offer"direct support to producers whose animals cannot move to market"and work with state veterinarians and other public officials"to help identify potential alternative markets"as plant shutdowns increase,according to a release posted on the agency's website.
It's hard to say exactly why the virus is spreading so fast among meat-plant employees. Some analysts have cited the fact that these are usually low-paying jobs that are often filled by immigrants. That means workers can live in cramped quarters,with sometimes more than one family sharing the same dwelling — so if one person gets sick,the disease can spread quickly.
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Employees are also in close proximity on the job,with the work on some processing lines being described as"elbow-to-elbow". Even if line speeds are slowed,workers spread out and shifts are staggered,there's still the chance of mingling in common rooms,hallways and shared transportation to often far-flung sites. These plants see thousands of people coming in and out every day — it's basically the opposite of social distancing.
At the same time,US federal employees responsible for inspecting meat plants are falling ill. More than 100 inspection-service employees have tested positive for COVID-19,the government confirmed. At least two deaths of inspectors have been reported.
US inspectors travel among facilities. That's adding to fears that shutdowns will keep occurring if a sick federal employee brings the infection to plants where there's not yet an outbreak.
"During this pandemic,our entire industry is faced with an impossible choice:continue to operate to sustain our nation's food supply or shutter in an attempt to entirely insulate our employees from risk,"Smithfield said."It's an awful choice;it's not one we wish on anyone."
Bloomberg
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