The clock is ticking for the U.S. to avoid a meat shortage as sick workers force more slaughterhouses to shut down.
Tyson Foods Inc. on Wednesday said it was idling its largest pork plant, making it at least the sixth major U.S. meat facility to shutter in the last few weeks. Currently, about 15% of hog-slaughtering capacity is completely offline, and there are also additional slowdowns at pork, beef and poultry companies across the nation.
Meat prices are starting to surge on the disruptions. But with slaughterhouses closing, farmers don’t have a market for their animals. That’s causing hog futures to drop, potentially creating a situation where pigs get euthanized and buried as supplies back up. Meanwhile, retail costs may rise as grocery stores mandate rationing on pork chops.
Things are so dire that Iowa, the biggest hog state, activated the National Guard to help protect supplies.
“Meat shortages will be occurring two weeks from now in the retail outlets,” Dennis Smith, a senior account executive at Archer Financial Services, said, citing industry sources. “There is simply no spot pork available. The big box stores will get their needs met, many others will not.”
Much has been made of the frozen inventories that are kept in warehouses, which could help cushion the blow of plant closures — as long as they don’t last very long. While there are hundreds of millions of pounds of frozen meat in U.S. warehouses, the supplies account for only a fraction of what’s typically produced in any given month.
In March, frozen pork inventories dropped 4.2% from February, U.S. government data showed on Wednesday. It was biggest drop for the month of March since 2014, and the decline came before the major slaughterhouse shutdowns that started in April.
“For all the talk of cold-storage supplies, it’s just never a lot,” Bob Brown, an independent market consultant in Edmond, Okla., said about supplies of pork, beef and poultry. “It’s roughly a week’s worth of production in the freezer.” – READ MORE
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