Author - jwasilewski

Reduced meat processing capacity caused by U.S. plant closures and slowdowns has created a massive bottleneck in the nation’s meat and livestock supply chain. A new report from CoBank’s Knowledge Exchange division, says even if the reduction of processing capacity is temporary, it will likely have a lasting impact on meat processors, livestock producers, retail stores and consumers. Meat supplies for retail grocery stores could shrink nearly 30% by Memorial Day, leading to retail pork and beef price increases as high as 20% relative to prices last year, the report says. “Margins for cattle and hog farmers have fallen to multi-year lows,” says Will Sawyer, lead animal protein economist with CoBank. “As meat plants have closed, farmers are left with few options for their livestock, requiring herds to be culled. Shrinkage in the U.S. livestock herd will likely make the food supply shortage more acute later in the year.”   Pork and beef production have dropped 35% compared to a year ago, making retail shortages and price inflation nearly assured, Sawyer adds. Pork processing is expected to pick up in the coming weeks, but producers may still be forced to euthanize as many as 7 million pigs in the second quarter alone, worth nearly $700 million at historical average prices, the report notes. Not only will this decrease meat supplies this fall but it will also add to the billions of dollars of losses from lower livestock prices. Sawyer expects reduced supplies of meat in grocery stores in May and June. U.S. consumers have been able to rely on grocery stores this spring as many restaurants across the country have closed in response to “stay-at-home” orders in many cities and states. “As communities reopen with only about one week of meat supply in cold storage, shortages and stock outs in the meat case couldn’t come at a worse time. Food inflation and a weak U.S. economy is a combination that will leave many consumers in greater financial strain,” the report says. Significant contractions in meat supplies have often led to substantial inflation of retail beef and pork prices, Sawyer says. “In the past 20 years, retail pork prices experienced inflation of more than 10% just twice. And neither of those times did we see inflation climb to 20%, which may be coming in the months ahead,” he says. Despite President Trump’s executive order to reopen closed meat plants, per capita COVID-19 cases around U.S. meat plants have climbed, raising the risk of further plant capacity disruptions. In addition, attracting enough workers to fill the vacancies at meat plants across the U.S. may be challenging, the report suggests. Meat processors continue to institute measures to ensure employee safety, reduce the spread of COVID-19 and keep protein supplies moving. Some companies are offering bonuses and increasing benefits. “The United States is facing an unprecedented situation and it will take a while to return to what life was like before COVID-19,” the report concludes.

Tyson Fresh Meats, Inc., announced plans to resume limited production at its Logansport, Ind., facility the week of May 4, following a plant tour with local health and government officials, a union representative, and medical professionals. The Logansport plant temporarily halted operations on April 25 to test its team members for COVID-19, Tyson said in a statement on Friday. Team members were asked to self-isolate until their results returned, Tyson said. The company is continuing to work with local health officials to verify test results. Tyson Fresh Meats, Inc., announced plans to resume limited production at its Logansport, Ind., facility the week of May 4, following a plant tour with local health and government officials, a union representative, and medical professionals. The Logansport plant temporarily halted operations on April 25 to test its team members for COVID-19, Tyson said in a statement on Friday. Team members were asked to self-isolate until their results returned, Tyson said. The company is continuing to work with local health officials to verify test results. “We’re also now screening employees for additional symptoms and designating monitors to help enforce social distancing, while following the CDC and OSHA’s guidance for Meat and Poultry Processing Workers and Employers,” Tyson said. The Logansport facility is the first of several Tyson plants to receive a mobile health clinic, operated by Matrix Medical Network, to provide community-based services ranging from diagnostic (PCR) testing for COVID-19, assist with the environmental design of the facility to mitigate the risk of the virus spread, as well as conduct daily on-site clinical screening. The company has also doubled its bonus for employees. In addition, Tyson Foods is also increasing short-term disability coverage to 90% of normal pay until June 30, 2020, for team members who are unable to work due to illness. “Tyson Fresh Meats has worked well with local community leaders to make sure its re-opening plan is safe,” said Dori Ditty, health officer of Cass County Health Department. “We toured the plant and feel the additional measures implemented will allow employees to work safely, while continuing to follow CDC guidelines and recommendations. We’ll continue to closely monitor the situation to ensure the safety of employees.” Tyson Fresh Meats’ recently announced its plans to temporarily halt operations at its Dakota City, Nebraska, beef plant for additional deep cleaning and sanitation. The group also voluntarily idled its locations in Waterloo and Perry, Iowa, and Pasco, Washington, while team members undergo testing and plants complete deep cleaning of the facilities, the statement said.

Cattle and pork industry groups praised President Trump’s executive order this week invoking the Defense Production Act to mandate that packing plants continue to function. It was a sign of support from the administration and acknowledgement that America’s protein industries are in crisis. Unfortunately, Trump’s order will do little to ease the bottleneck currently plaguing beef and pork producers. Packing plants can’t magically return to 100% capacity overnight. The coronavirus pandemic has already inflicted its wrath on America’s protein industries and the recovery will be slow. Slower still if you have cattle and hogs that need to be harvested. Kansas Senator Jerry Moran may have helped influence Trump to issue his executive order as he spoke by phone with the President last week to underscore the magnitude of the crisis. Yet, Moran acknowledged the harsh realities of the pandemic during an interview with AgDay’s Clinton Griffiths this week. The executive order can’t force people to work, and many packing plant workers believe reporting to work in the current environment is placing their health at risk. Moran acknowledged as much. “We have to have a safe workforce, and that workforce has to feel comfortable going to work,” he said. “It doesn’t mean that with the signature of a pen that everything is fine.” Iowa State University economist Lee Schulz told U.S. Farm Report’s Tyne Morgan safety measures are necessary to resolve the worker-packer impasse. “Ordering a state packing plant to stay open and for that packing plant to operate are two very different things, because it is very reliant on the labor force to operate that packing plant,” Schulz said. “We can't necessarily make those workers work, but if they are available to do work, and I think the more resources that we can get to help resolve the situation in the form of safety measures in the form of testing, that will allow us to potentially move to getting these packing plants either back on line or getting up to capacity level that allows us to move our hogs through.” This week’s hog slaughter is running about 40% below (558,000 head fewer) the same week a year ago. The week’s cattle harvest is similar, with about 40% fewer (140,000 head) than the same week year ago. Industry analysts estimate over 500,000 head of cattle are backlogged in feedyards now, and the number will continue to grow until harvest plants are back to running at 100%. Some analysts believe it will be June before the plants are back to full strength, and the implications are that the backlog will linger over the market for months. As dire as the situation is for beef producers, it’s worse for pork producers. They’ve suffered more plant closings and more significant harvest reductions than beef. Some producers are facing the grim inevitability of euthanizing hogs they’ve raised from birth. While the financial and emotional stress the coronavirus crisis has placed on livestock producers can’t be overstated, the damage to the beef and pork industries goes far beyond the losses absorbed this spring. Soon, the packing industry will face the wrath of a disgruntled workforce, likely in the form of a string of class-action lawsuits. Trump’s executive order specifically addressed limiting the liability of packing companies from employees who become sick with COVID-19, but many question if such an order is fail-safe. “Reopening meat processing plants — even though they're virus hot spots — raises a tangle of liability issues that could keep courts and trial lawyers busy for years,” Axios managing editor Jennifer Kingson reports. Lawyers say the meat packers being forced to reopen plants — like Tyson Foods, Conagra, Smithfield Foods, JBS and Cargill — could face a range of legal challenges if their workers get sick. "The overwhelming majority of the workforce could have worker's comp claims," David Domina, a trial practice lawyer in Omaha, tells Axios. While the major packers assemble their legal teams to respond to worker complaints, they’ll need to do the same to respond to producer complaints. While the anger and frustration with packers is mild on the pork side, cattlemen are set to break out the torches and pitchforks. Even before the coronavirus crisis, many cattle producers saw America’s Big 4 packers – who control 80% of beef production – as an immovable force controlling the price of cattle while generating huge profits for themselves. Lawsuits were filed last year alleging price manipulation by the Big 4, and this spring’s market reaction to the coronavirus only provided further evidence of such to many producers. Now, the Big 4 also face a growing chorus from producers that the federal government must intervene and breakup their stranglehold on cattle markets. This week R-CALF USA sent a letter to President Trump and Congressional leaders asking them to investigate “whether a physical and geographical restructuring of the meatpacking industry is required to disaggregate and decentralize beef processing capacity.” But that’s for later. Right now beef and pork producers want the plants open. They need a home for market-ready cattle and hogs for markets to begin returning to some semblance of normal. The most immediate fix is extra pay for line workers along with improved working conditions including PPE and testing. Most packers have already announced worker bonuses tied to attendance, but Tyson Foods announced Wednesday it would double bonuses paid to 116,000 frontline workers and truck drivers during the coronavirus pandemic. That would total roughly $120 million, starting with $500 per worker in early May, followed by a second bonus paid in July. That’s a step in the right direction to keep the plants running, though it provides little solace to cattle and hog producers who have watched packer margins jump to record highs this spring while struggling to keep their livestock enterprises afloat. For all the strain and stress from the coronavirus crisis, Purdue University agricultural economist Jayson Lusk says it has also open up consumers eyes to just how much the food system is reliant upon a solid supply chain. “It's opened our eyes to how much we depend on farmers and on a well-functioning food supply chain,” Lusk says. “That includes those processors in the middle, in how much we count on the fact that we're well-fed. We've just taken food security for granted. And hopefully people will come away from this with a greater appreciation of just how intricate and how much work goes into supplying a bountiful and secure supply of food.”

Pig farmers applaud President Donald Trump’s Executive Order to invoke the Defense Production Act to extend needed support to meat processors to ensure an abundant supply of protein for Americans. The COVID-19 pandemic has caused a great upset in the U.S. food and agriculture industry. “Everyone in the food supply chain – from farmers to packing plant workers – wants to meet consumer demand for pork, and we are hopeful that President Trump’s Executive Order is a step in the right direction,” Cheryl Day, executive vice president of the Ohio Pork Council, said in a statement. By triggering the Defense Production Act, the federal government will prioritize the continuity of pork processing plant operations, the National Pork Producers Council said in a statement. "We must safely stabilize the current plant capacity challenge and overcome other major hurdles facing the nation's pork production system, one that employs 550,000 workers and generates $23 billion in personal income across rural America. Hog values have plummeted to virtually zero and hog farmers are facing liquidation of their farms and other assets without immediate relief, including expanded financial aid without payment limitations,” said Howard "A.V." Roth, NPPC president and a Wisconsin pig farmer, in a statement. Dwight Mogler, an Iowa pig farmer, said he hopes this action will mean the pork industry can get daily marketing of hogs back to the level needed to prevent farmers from having to euthanize pigs. “Raising pigs to provide protein to the world is our life’s work,” Mogler said. Until the plants are back up to full speed, Roth said coordinated partnership between the industry and federal, state and local authorities to euthanize pigs in an orderly, ethical and safe way is critical. Worker Safety is Paramount COVID-19 testing swabs and reagents as well as PPE equipment continue to be available in limited supply, but Mogler said the meat processing industry should receive priority for access to these limited supplies. “Health care workers are still priority #1. Meat processing workers are priority #1A,” Mogler said. “I hope the Defense Production Act means meat processors will be able to continue to press forward with their plans to reopen closed facilities without being bogged down in assessing all the legal liabilities associated with their actions.” Although there are more questions than answers regarding the details of this action, Mogler said he hopes details will be forthcoming soon. “If the plants operate in good faith with the health and safety of their employees as the first priority, then I hope this act means the federal government will protect them from any future liability that would result from their decisions. After all, they must make decisions based on the best information they have available today. Business needs to get done. People need to eat,” Mogler said. The Centers for Disease Control and Prevention (CDC) of the Department of Health and Human Services and the Occupational Safety and Health Administration (OSHA) of the Department of Labor have put out guidance for plants to implement to help ensure employee safety to reopen plants or to continue to operate those still open, USDA said in a release. “Maintaining the health and safety of these heroic employees in order to ensure that these critical facilities can continue operating is paramount,” said Secretary of Agriculture Sonny Perdue in a statement. “I also want to thank the companies who are doing their best to keep their workforce safe as well as keeping our food supply sustained. USDA will continue to work with its partners across the federal government to ensure employee safety to maintain this essential industry.” Under the Executive Order and the authority of the Defense Production Act, USDA will work with meat processing to affirm they will operate in accordance with the CDC and OSHA guidance, and then work with state and local officials to ensure that these plants are allowed to operate to produce the meat protein that Americans need. USDA will continue to work with the CDC, OSHA, FDA, and state and local officials to ensure that facilities implementing this guidance to keep employees safe can continue operating. The U.S. meat industry is already taking extraordinary steps to ensure worker safety, including COVID-19 testing, temperature checks, use of personal protective equipment and social distancing of employees, the U.S. Meat Export Federation (USMEF) said in a statement. “But further action is needed to stabilize our meat supply chain, and USMEF greatly appreciates the Trump administration's prioritization of safe and consistent meat production and processing during this difficult time,” said Dan Halstrom, USMEF president and CEO, in a statement.      

How does herd immunity in pigs apply to COVID-19? Some veterinarians say it has everything to do with this current pandemic situation. “We’ve been working on herd immunity in the swine industry for decades,” says Tim Loula, DVM, of Swine Vet Center in St. Peter, Minn. “We use population medicine and do complex disease eradications on pig farms. About 20 years ago, the U.S. swine industry accomplished a national Pseudorabies virus eradication, a government program, to rid the U.S. of this disease. We have also worked with clients over the last 20 years to eradicate atrophic rhinitis, Actinobacillus pleuropneumoniae (APP) and swine dysentery. Today we perform eradications for porcine epidemic diarrhea (PEDv) and porcine reproductive and respiratory syndrome (PRRSv) and Mycoplasma.” He says the key is understanding the disease status of each pig and population, and then working on a plan to get every pig “on the same page.”   After the first cases of COVID-19 were discovered at the Smithfield Foods pork processing plant in Sioux Falls, S.D., Loula and Dave Bomgaars of RC Family Farms reached out to the healthcare industry to visit with doctors about COVID-19. Doctors from Sanford Medical in South Dakota joined Loula, Bomgaars and a few other swine industry leaders in conference calls to formulate a plan using the best science available. With their experience in population medicine, Loula hoped that if they all put their minds together, they could find some solutions or at least develop a plan to move forward. Together, the veterinarians and doctors shared flow charts of how they would interpret best testing procedures for plant workers. Loula merged those ideas into a testing algorithm to help understand what’s going on in the packing plant populations. He says the algorithm assumes adequate availability of tests, both PCR (a test that would show if virus is present) and Elisa (a test that would show if antibodies to the virus are present). “This situation is very serious. People are getting sick and some are dying,” Loula says. “We have to use all the science that we can and use the concept of population medicine to our advantage.”   How does population medicine work?  In their testing algorithm, the key is knowing every person’s status regarding the virus. “We need to test every worker for the virus (PCR test) and for antibodies. This would allow us to group people into one of three buckets – positives, negatives (naïve) or immune (positive for antibodies),” Loula says. “Then, once you get that information back on your employees, you manage it like a pig farmer would.” Managing people like pigs may be a difficult concept for people to accept at first, but Loula says producers manage different disease populations every day in their swine herds. He believes the process can work similarly in the human population. he positive group indicates people who have the virus and are actively shedding it. People in that group would need to self-quarantine and be retested every seven days. Once their PCR tests come back negative, that indicates that their body has created antibodies and they could instantly move over into the immune group and get back out in the workforce. The negative group is also referred to as “naïve” on a farm. These people have not contracted the virus and are the most vulnerable group. He says people in the negative group need to watch who they associate with, paying special attention to who they share rides with or hang out with when they aren’t at work. Loula says he could even make a case for “negative” families in packing plant communities with COVID-19 outbreaks to move into a hotel or dormitory temporarily to protect themselves and to help keep these plants going. The third group, the immune group, possess antibodies that provide immunity to the virus. This group can work with the negative group and not pose any threats, Loula says. He adds that there is the possibility of someone having a positive PCR and a positive antibody test. This means they have a very low risk of shedding, but there is a possibility. He believes people who fall into this group could be segregated in a plant into a certain area of production or possibly work a different shift. “We’ve got to figure out who has immunity and keep them working. They can keep these plants running,” he says. “The situation at hand with plant closures is dire. It’s a national emergency evolving right in front of our face.” How can this help? Knowledge is power. Loula believes helping not only the workers, but also communities, understand how herd immunity works will help alleviate unnecessary fear and hysteria. “For example, in the Columbus Junction plant, workers may be concerned that two people died. That’s a legitimate fear. But if you could help people understand how you are separating the positives from the negative (naïve) and immune groups, then they can go to work without fear,” he says. “We need to tell a better story of the science involved.” He says understanding the population of workers, in this example, would allow plants to make informed decisions about how to separate the positives from the negatives and immune. But the key is that every worker needs to be tested. When only 700 workers out of 2,000 are tested, that only provides insight into a subset of the population and doesn’t reveal asymptomatic people who are actively shedding the virus. This also does not allow for a plan to be formulated or followed, he says. More tests are needed One of the greatest challenges now is a shortage of tests. Loula says there’s no question that health workers need to be tested first, but he believes people helping produce food should be next. “We’re in danger of having to waste tons of food if we don't get this figured out,” Loula says. “We need to have a plan in place to get plant workers tested. We need to test entire populations with both PCR and antibody tests. It’s time to get a plan, work the plan and if it’s not quite what we want, keep reworking it.” Veterinary diagnostic labs have experience with high volume testing and rapid through-put. The main veterinary diagnostic labs have offered to help process tests for humans, he adds, noting, “It’s important that we not only get more tests, but we also need more labs to process tests.” For example, Iowa State University’s Veterinary Diagnostic Laboratory is helping expand COVID-19 testing capacity to expedite test results at the State Hygienic Laboratory at the University of Iowa, the university reported in a release. Not only did they share extraction techniques, but they also shared instrumentation and the reagents needed for analysis. As other industries return to production and non-essential workers begin getting together again, Loula believes another wave of the virus will spread. However, he believes the food industry could serve as a good model to help people know how to bring groups back together and not panic as the economy gets back up to speed again. “We are the essential workers on the front line. We’re the ones experiencing this,” he says. “If we are successful in the food industry about how we work through it, then we could be the model for every other industry coming back.”