Livestock

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.”  

Kansas officials are actively working to keep the state’s beef packing facilities operational in the face of the ongoing coronavirus pandemic. Kansas Secretary of Agriculture Mike Beam said on AgriTalk (April 23, 2020) that Kansas Governor Laura Kelley and officials from the State Department of Health and interior are “engaging multiple times a day with the processing facility representatives.” Beam also emphasized Kansas officials are engaged with the Centers for Disease Control and the Department of Health and Human Services in Washington, D.C., “pointing out to the folks in DC that this is a critical infrastructure, despite other plants in other regions of the nation having shut down temporarily. These plants in Kansas are still trying to operate and are going above and beyond the guidelines of CDC, to keep in operation.” As of Wednesday (April 24), Beam said all of the Kansas beef facilities were operational, though not at full capacity. He said it is critical to maintain that harvest capacity while still protecting the health of the employees and the communities where they live.

Tyson Foods is suspending operations at its Waterloo plant indefinitely due to outbreaks of COVID-19. The Waterloo plant is Tyson Food’s largest pork plant, harvesting 19,000 pigs a day. It has been operating at reduced levels because of worker absenteeism, Tyson Foods said in a KWWL 7 News report. On Tuesday, the Black Hawk County Board of Health issued a statement to Governor Reynolds and Tyson Foods asking for the plant to be temporarily shut down. According to KWWL, the proclamation passed unanimously Tuesday morning during a special meeting of the county's Board of Health. More than 182 cases were reported as of Tuesday related to the Waterloo plant. The facility’s 2,800 workers will be invited to the plant later this week for COVID-19 testing. “Protecting our team members is our top priority and the reason we’ve implemented numerous safety measures during this challenging and unprecedented time,” said Steve Stouffer, group president of Tyson Fresh Meats in a statement. “Despite our continued efforts to keep our people safe while fulfilling our critical role of feeding American families, the combination of worker absenteeism, COVID-19 cases and community concerns has resulted in our decision to stop production." Workers will continue to receive pay while the plant is closed, KWWL reports. The plant’s reopening will depend on several factors, including the outcome of employee COVID-19 testing. “The closure has significant ramifications beyond our company, since the plant is part of a larger supply chain that includes hundreds of independent farmers, truckers, distributors and customers, including grocers,” Stouffer said. “It means the loss of a vital market outlet for farmers and further contributes to the disruption of the nation’s pork supply.” Some of the hogs intending to be harvested at the plant in Waterloo were able to be diverted on Tuesday to the Columbus Junction, Iowa, plant that reopened after being shuttered since April 6, 2020.

Hog values are plummeting due to the impact of COVID-19 and creating a financial disaster for pork producers nationwide who face a collective $5 billion loss for the remainder of the year. On Tuesday, the National Pork Producers Council (NPPC) outlined the crisis as described by producers and the immediate relief they are requesting from the administration and Congress during a media briefing. “We remain committed to supplying Americans with high-quality U.S. pork, but face a dire situation that threatens the livelihoods of thousands of farm families,” said NPPC President Howard “A.V.” Roth. “We are taking on water fast. Immediate action is imperative, or a lot of hog farms will go under.” The temporary closures of pork packing plants and rising employee absenteeism due to COVID-19 has exacerbated an existing harvest facility capacity challenge due to a labor shortage in rural America, NPPC said. The limited harvest capacity combined with a surplus of pigs is causing hog values to plunge. In addition, restaurant closures and the COVID-related slowdown in most export markets has crashed demand and overwhelmed the cold storage of meat. Dermot Hayes, an economist with Iowa State University, and Steve Meyer, a pork industry economist with Kerns & Associates, estimate that hog farmers will lose nearly $37 per hog, or almost $5 billion collectively, for each hog marketed for the rest of the year, NPPC said. “We were forecasting to probably make about $10 a head this year, but all that evaporated in the last two weeks,” NPPC immediate past president David Herring told AgDay TV’s Clinton Griffiths during Farm Journal Live on Monday. Herring said with the losses expected in the year ahead, there’s just no way the average producer can stay in the market like that. Roth added, “The pork industry is based on a just-in-time inventory system. Hogs are backing up on farms with nowhere to go, leaving farmers with tragic choices to make. Dairy producers can dump milk. Fruit and vegetable growers can dump produce. But, hog farmers have nowhere to move their hogs.” NPPC, in consultation with hog farmers across the nation, has identified several measures it has raised with federal policy makers. NPPC has suggested over $1 billion in pork purchases by the USDA to clear out a backed-up meat supply, supplementing agency food bank programs facing increased demand due to rising unemployment. These purchases should accommodate pork products packaged for restaurants and other segments of the food services market. In addition, NPPC has suggested equitable direct payments to participants without eligibility restrictions. NPPC said they are seeking a “legislative fix to emergency loan programs that have left farmers behind.” With 10,000 family hog farms in jeopardy because they do not have access to much-needed capital offered by the Small Business Administration, NPPC urges Congress to increase the cap on qualifying businesses to those that employee up to 1,500 and to make agricultural businesses eligible for the Economic Injury Disaster Loan program. The economic impact analysis by Hayes and Meyer was based on live hog futures between March 10-April 10.