Largest US meat company warns food supply chain is breaking

The largest US meat company has warned of shortages for consumers, saying the country’s complex food chain was “breaking” as Covid-19 spreads to refrigerated packing plants.

Tyson Foods has shut down three slaughterhouses and partially reopened a fourth in the past week as it tests workers for coronavirus. Almost a third of US pork processing capacity and 14 per cent of beef capacity is now offline as the disease sweeps through the densely staffed cutting floors of packing plants, agricultural economists say. 

John Tyson, Tyson’s chairman, said American grocery stores would have sparse meat selections until its plants came back. “As pork, beef and chicken plants are forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain,” he wrote in a letter published in three US Sunday newspapers. 

Supermarket meat cases were sometimes depleted as consumers stocked up in advance of government-decreed lockdowns in March, but meat supplies remained steady. The US produced 5bn lbs of red meat last month, up 13 per cent from a year before, according to the US Department of Agriculture. 

$60m Total amount to be paid in ‘thank you’ bonuses to Tyson staff for their services during the pandemic

Slaughter totals have since plummeted as plants close down or slow their line speeds to account for Covid-19 tests and sick workers. On Friday, US packing plants killed 83,000 cattle, down by more than a quarter from 114,000 a year before, and 361,000 pigs, down almost 20 per cent from 449,000 a year ago the USDA reported. 

Tyson last week closed two pork plants in Logansport, Indiana, and in Waterloo, Iowa, that together can slaughter almost 35,000 pigs a day, according to estimates by Steve Meyer of Kerns & Associates. It also closed a beef plant in Pasco, Washington, as it tested more than 1,400 employees there. 

Poultry plants, centred in the southern “broiler belt” stretching between Arkansas and the Carolinas, have not been hit as hard by the coronavirus, said Terrence O’Keefe of Watt Global Media, a poultry trade publisher. Some chicken plants whose restaurant sales have dried up have sold cuts at bargain prices outside their plant gates, he said. 

In the Midwest, some farmers unable to sell their pigs to closed packing plants had begun to euthanise them, executives said. 

“Millions of animals — chickens, pigs and cattle — will be depopulated because of the closure of our processing facilities. The food supply chain is breaking,” Mr Tyson wrote.

Arkansas-based Tyson has promised $60m in “thank you” bonuses to reward 116,000 workers and company truckers for their service during the virus outbreak. Robert Moskow, analyst at Credit Suisse, estimates the company may need to spend as much as $300m in added labour costs in the event of a significant outbreak at its plants.

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