Trump’s order is no quick fix for meat supply
A day after President Donald Trump’s executive order to keep meat plants running, one of them has reopened — but only to cull animals that can’t be processed.
That’s the latest indication the sweeping order is anything but a quick fix for supply-chain woes.
A JBS plant in Minnesota is starting a mass culling operation, destroying hogs it can’t process into pork cuts until it’s able to get the protective equipment needed to fully reopen.
Meanwhile, after Trump invoked the Defense Production Act to keep meat supplies secure, unions and advocacy groups blasted the action, calling it a potential death sentence for workers.
Moves in livestock markets underscored the skepticism. U.S. hog and cattle futures fell Wednesday, a counter-intuitive move given the order aims to ease huge gluts of animals.
“It will ease a lot the pressure for livestock producers, but we don’t anticipate this completely solving the problem,” said McGuireWoods Consulting Senior Vice President Ryan Bernstein, who also operates a family farm in North Dakota. “There will still be bottlenecks. And farmers are still going to have make difficult choices when it comes to depopulating.”
The U.S. has been thrust into a meat crisis after the coronavirus pandemic forced the closure of major plants.
While only about a dozen slaughter facilities shuttered, they are massive operations that processed thousands of animals a day. The meat producers have such a stranglehold on output that it’s left the supply chain with few remedies. So farmers are being forced to destroy animals, even as experts warn that protein shortages could hit grocery stores and meat prices surge.
Trump’s executive order was aimed at relieving the situation. He’s mandated the plants stay open, using the Defense Production Act. The government is supposed to provide additional protective gear for employees as well as guidance.
But there are plenty of unanswered questions: How quickly can gear and testing be rolled out? How will unions and county authorities focused on containing outbreaks react? How much will stricter distancing measures slow production and when can workers who have fallen ill return?
Some answers may come in a White House report that’s being prepared.
Unsurprisingly, meatpackers applauded the administration’s move. But equity investors were circumspect, with shares in heavyweights Tyson Foods and JBS up less than 1 percent.
And in the meantime, little has been solved for supplies in the immediate future.
JBS, the world’s biggest meat producer, said Wednesday it was reopening its pork-processing plant in Worthington, Minn., to help depopulate hogs.
Trump’s order not only is aimed at helping farmers find buyers for their animals, but also at making sure nervous stay-athome consumers are supplied with affordable beef and pork.
On Wednesday, wholesale American beef jumped 8 percent to a record $357.38 per 100 pounds, up 75 percent from a low in February, U.S. Department of Agriculture figures show. Pork prices gained 2.5 percent to the highest since 2017.
The order has faced mixed reaction from state and other officials.
Pennsylvania Gov. Tom Wolf said the president’s move is expressing “something we all agree with — that is that we need these organizations to stay in business.”
But there will be hurdles to get businesses back up and running.
“Our goal is to be as cooperative as possible, but we do need to get those workers tested and their families tested,” Wisconsin Gov. Tony Evers said at a news conference.
“And because English isn’t always the first language of the people who are in these situations, we need to make sure things are done appropriately, culturally, and competently. And we have a surge of people working on that right now.”
Even when plants do open back up, it’s unlikely they will be running at full capacity.
Workers who normally are jammed elbow-to-elbow on processing lines will need to be spaced out more. That likely will slow line speeds.
”The president’s executive order will only ensure that more workers get sick, jeopardizing lives, family’s income, communities, and of course, the country’s food supply chain,” said Kim Cordova, president of Local 7 of the United Food and Commercial Workers International Union, which represents 3,000 workers at the JBS beef plant in Greeley, Colo.
“This is not the Middle ages, and workers are not serfs — toiling at the whim of the management lords of the manor,” Cordova said.