PUSH TO PREVENT NEXT MEAT SHORTAGE HITS OBSTACLE
Small processors struggled to pick up slack in pandemic
Sudden meat shortages last year because of the coronavirus led to millions of dollars in federal grants to help small meat processors expand so the nation could lessen its reliance on giant slaughterhouses to supply grocery stores and restaurants.
Like shortages of protective clothing for health care workers, hospital equipment and even toilet paper, the reality of empty meat counters was a shock to many Americans unaccustomed to scarcities. But where most other supply gaps are being addressed by changing how the U.S. acquires key items, the money flowing to small slaughterhouses shows no sign of solving the meat problem.
The meat industry has been consolidating for decades, and 80 percent or more of meat is slaughtered by just a few companies, whose operations were crippled last year when the virus began spreading among workers.
“Even a significant increase in processing capacity in those small and midsize processors, that’s a small amount in the grand scheme of things,” Iowa Agriculture Secretary Mike Naig said. “Yes, it provided some relief, but no, it’s not at the level that will rival the big processors.”
Or as Terry Houser, a meat processing expert at Iowa State University, put it, “Small plants cannot replace the big plants when they go down.”
The problem illustrates the difficulty of creating more sources of supply in an industry that is trending in the opposite direction.
There’s little doubt the grants will help small processors and in turn provide sorely needed rural jobs, but the economics of meat now centers on large, highly efficient slaughterhouses, not smaller plants whose numbers have been decreasing sharply.
The number of smaller operations that meet local demand plunged by 42 percent to 1,910 between 1990 and 2016, according to the U.S. Department of Agriculture.
When the coronavirus
sickened thousands of workers at the big slaughterhouses, forcing some to close temporarily, output dropped to 60 percent of normal. Many producers suddenly had nowhere to take their animals for slaughter, and the small processors who remained, who mostly provide meat for local groceries and farmers markets, couldn’t take up the slack.
Later, Iowa was among at least 16 states that used some of the billions of dollars in federal COVID-19 relief aid to provide grants to small meat processors, enabling them to replace equipment and expand. In Iowa, the state awarded $4 million to help 109 small meat and poultry plants increase production, with some of the funding also going
toward marketing and education.
Likewise, Arkansas awarded $5 million in federally funded grants, Indiana divvied up $4 million, and Montana used $2 million to fund grants of up to $150,000.
Most of the money went to small-town businesses, which have withered as larger plants opened that could process thousands of cattle and up to 20,000 hogs a day. Small processors typically slaughter only 10 or 20 animals a week.
When the larger plants began closing last spring, some hog farmers ended up killing and burying thousands of animals.
Jeff Hodges, who owns a small processor in the tiny northwest Iowa city of Minden, said he was overwhelmed with business last
spring and is still scheduling a year into the future as demand for locally raised meat remains strong.
“At first it was a giant nightmare,” Hodges said. “Now you’re used to the norm of your being maxed out and you pray everybody shows up for work.”
Hodges has received a $33,000 grant to buy a splitting saw, grinder and other equipment, but he’d need to spend closer to $750,000 to substantially increase production. That’s a big investment for a business he bought in the mid-1990s for $90,000.
The key to lessening dependence on the big processors is to make larger grants and loans available to midsize processors, said Rebecca Thistlethwaite, a rancher and director of the
Oregon-based Niche Meat Processor Assistance Network. That’s an expensive proposition, with such plants costing $20 million or so.
Even if the government offers more money, expansion in an industry with low profit margins could be slow, she said.
“A lot of people think that by changing policy, all of a sudden a bunch of new entrepreneurs are going to come into the space, and that’s not going to happen,” she said. “You don’t have a bunch of people sitting on a bunch of money who are saying, ‘Oh, I just can’t wait to start a meat processing plant.’ ”
Some farmers, like the owners of Vaughn Farms near the small central Iowa community of Maxwell, say their chance of building their specialty cattle operation could depend on small processors expanding.
With processors already booking out into next year, farmers must schedule space for cattle that aren’t born yet.
“That’s hard because animals grow at different rates, just like people,” Jalane Vaughn said. “To try to gauge when something is going to be 1,200 pounds or the optimal weight for harvest has been a struggle.”
Co-owner Jerilyn Hergenreder said she hopes the government’s sudden interest in building up small processors makes a difference.
“I’m happy for the small processors that they have become relevant again, and they’re definitely trying to handle the demand,” Hergenreder said.
After decades of relying on fossil fuels to make its plastic bricks, Lego is taking a small step toward a greener future earlier than planned.
Europe’s biggest toymaker may stop using plastic bags in the boxes that contain its bricks before a selfimposed 2025 deadline. It’s part of a much more daunting project, already under way, to find sustainable materials for the almost 100,000 tons of plastic bricks that Lego produces each year.
For now, the shift to more climate-friendly packaging is “going well even though we are at the trial stage,” Chief Executive Officer Niels B. Christiansen said in an inLego terview. “It’s a long process with adjustments to many machines in our factories,” but Lego is “well under way, and as a minimum you can say we are on schedule.”
Lego wants to eventually stop using oil-based plastics in the iconic building blocks that have made it one of the world’s bestknown brands. The company has a team of 100 people dedicated to developing its green toys, and they need to make sure Lego has an environmentally friendly product it can put on store shelves by 2030.
By then, Lego’s colorful building blocks will be made from sustainable materials such as sugar cane. But this transition is “much, much more complex” than just moving away from plastic bags, Christiansen said.
Lego has set aside $400 million to go green, though money isn’t really a concern. “We are family owned and have a long-term view,” Christiansen said.
The Kirk Kristiansen family that owns Lego has made a point of singling out green investments. Through its Kirkbi fund, which manages about $20 billion and is chaired by Kjeld Kirk Kristiansen — the grandson of Lego’s founder — the family looks for sustainable ventures, such as its 2020 investment in Quantafuel, which converts almost all kinds of plastic into green fuel and chemicals.
“We need to develop a product that has all the characteristics of the current block,” Christiansen said. “It needs to be durable and last many, many years; it needs to be safe so it’s not sharp if it breaks off; it needs to be able to withstand different temperatures; it needs to be chemically safe, just to name some.”
Last year, when a lot of businesses went bust in the face of the pandemic, Lego delivered record sales and profit. The company says the result is proof of the “timelessness” of its toy bricks, as products for all age groups flew off its shelves.
is trying to stay relevant to a new generation of kids largely raised on virtual forms of entertainment. But that’s not all that distinguishes them from previous generations, Christiansen says.
“The feedback we get from our customers is very clear,” and “the younger kids are, the more direct they are with their views on the green transition and sustainability,” he said. “It’s very interesting to witness.”
The Lego CEO says he personally gets “letters and emails from children” worried about the environment. Some of the kids who contact Christiansen have suggestions as to how Lego might move away from plastic, he said.
For now, Lego has managed to produce 100 building blocks from sustainable materials, Christiansen said. “We’re making progress and investing heavily.”
Volkswagen plans six large battery factories in Europe by 2030 to power sales of more electric cars while driving down battery prices and making electric vehicles more affordable for entrylevel buyers.
Volkswagen said it would build on its existing battery production facilities at Salzgitter in Germany and with partner Northvolt in Skelleftea, Sweden, adding new production technology and a standardized cell that it said would cut battery costs by as much as 50 percent.
The world’s second-largest carmaker by sales volume behind Toyota also outlined plans to work with partners to operate 18,000 fast-charging points in Europe by 2025, which it said would represent a fivefold expansion of what’s currently available. Having more places to charge on longer trips is seen as another way to get more people to buy electric cars.
Battery costs are one reason electric cars are often more expensive than internal combustion equivalents. Europe’s accelerating rollout of electric cars has been supported by expensive government and carmaker subsidies to bring the price down for consumers.
The Wolfsburg, Germany-based automaker on Monday outlined plans for a broad ramping up of its battery production during an online event dubbed “Power Day,” an apparent echo of competitor Tesla’s annual “Battery Day” events where the company announces new steps in battery technology. Tesla is building a large battery factory near Berlin.
On top of the factory network, Volkswagen said it would introduce new battery technology and chemistry that aims to make production more efficient and lead to better performance, steps it said would help bring electric cars within the reach of more buyers.
“We aim to reduce the cost and complexity of the battery and at the same time increase its range and performance,” says Thomas Schmall, Volkswagen’s technology chief. “This will finally make e-mobility affordable and the dominant drive technology.”