Concerns over US meat supply chain following plant closures

By Aidan Fortune contact

- Last updated on GMT

Concerns over US meat supply chain following plant closures

Related tags: Us, Beef, Pork, coronavirus, Tyson foods, Jbs usa, Smithfield foods

A wave of US meat processing plant closures due to coronavirus has sparked concerns among the supply chain with financial losses predicted to be as high as $13.6bn.

Earlier this week JBS USA announced that its Greeley beef production facility in Colorado was to temporarily close until 24 April due to the coronavirus pandemic. It employs more than 6,000 people and is the second JBS USA site to close, after the Souderton site in Pennsylvania.

It’s not the only major processor in the country to close its doors or at least have production impacted. Smithfield Foods closed its pork processing facility in South Dakota“until further notice”​ and Tyson Foods said every one of its US sites has been adversely affected by the pandemic​.

National Cattlemen’s Beef Association (NCBA) CEO Colin Woodall warned of the knock-on effect this would have on prices.

“The closure of packing plants during this crisis will have an impact on cattle and beef prices. Plant closures or slowdowns have significant regional and national implications that will ripple through the marketplace at a time when cattle producers are already suffering from market uncertainty and economic hardship. Every member of the beef supply chain relies on processing plants operating daily to keep product moving. America’s cattlemen and cattlewomen are hopeful that any beef processing plants which have been slowed or closed as a result of the COVID-19 outbreak return to full operation as quickly as possible.”

Woodall did stress that consumers shouldn’t be concerned about a lack of product on shelves.

“Currently, there is no shortage of beef and consumers can continue to be confident about the safety and wholesomeness of the products they are purchasing during this crisis,” ​he added.

Cattle industry losses

NCBA research also estimated that cattle industry losses as a result of the COVID-19 pandemic will reach $13.6bn. The study was commissioned by NCBA and conducted by a team of industry-leading agricultural economists led by Derrell Peel, Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist at Oklahoma State University.

“This study confirms that cattle producers have suffered massive economic damage as a result of the COVID-19 outbreak and those losses will continue to mount for years to come, driving many producers to the brink of collapse and beyond if relief funds aren’t made available soon,”​ said Colin Woodall. “This study also clearly illustrates the fact that while the relief funds provided by Congress were a good first step, there remains a massive need for more funding to be allocated as soon as members of Congress reconvene.”

Smithfield Foods president and chief executive officer Kenneth M. Sullivan also expressed concern over the closures.

“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply. It is impossible to keep our grocery stores stocked if our plants are not running. These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers. These farmers have nowhere to send their animals,” ​he said. 

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