Every day, we read about more meat processing plants shutting down. In the beginning of COVID, we were assured that our food supply was plentiful and safe. While you might not get exactly the meat you want, and some cuts will be more expensive, you will still have enough meat to feed your family. But whether meat becomes the new ‘toilet paper’ is up to you.
Remember when we all went grocery shopping in the beginning of COVID? The grocery store shelves were practically empty. I couldn’t find black beans or even plain pasta. The milk and meat sections were bare. We certainly do not want that to happen again – going to the grocery store is stressful enough given our masks, sanitizers, and maneuvering our carts to a socially acceptable distance. Let’s not allow the news about meat plant closings force us back into ‘panic buying’ habits.
Rest assured, there is enough meat to go around…if we shop responsibly. Here’s why.
Due to COVID-19 among facility workers, it’s no surprise that things look a little grim. As of the week of May 4th, about 40% of hogs, 35% of beef, and 12% of chickens were not processed, which is where livestock meat is separated into cuts, and then packaged for distribution to grocery stores and food service operators.
The country’s largest meat suppliers, JBS, Hormel, Tyson, Conagra, Cargill, and Smithfield, have all suspended or shut down operations at one or more of their meat processing plants across the country. We shouldn’t worry too much because when some close, others open. All of the meat plants will not shut down at the same time.
President Trump invoked the Defense Production Act that designates chicken, pork, and beef plants as critical infrastructure under the law. This also ensures that workers are first in line for PPE (personal protective equipment). In addition, the CDC wrote general requirements for meat processing plants to operate under COVID-19.
New Meat Protocols
At the end of the day, every single meat company is working hard to keep their employees safe with appropriate distancing and PPE.
“It is a challenge and it will continue to be a challenge. We are doing a lot of investments, changing cafeterias, food separation, changing shifts, we are investing in our team members, we put a bonus out there to retain the team members and keep them working. But it is a challenge, and we will continue to face this challenge as long as this crisis continues.”
– JBS earnings call, March 26, 2020
Right now, meat facilities are taking the highest precautions. They have put up plastic barriers, given all employees enough masks, increased the cleaning and social distancing in common areas like the lunchroom and locker rooms, kept high-risk population at home, and are taking employee temperatures before they enter the facilities and during their breaks.
Smithfield Foods reported in their recent press release, “media and other reports pitting the company against its employees are flat out wrong. There is no such division. The company and its team members all want the same thing: to protect employee health and safety while also safeguarding America’s food supply.” (image to the right: Plastic shields at Smithfield Foods, the largest global pork producer)
Employers are also increasing the worker’s pay. For instance, Tyson Foods is providing $120 million in bonuses and increasing health benefits for frontline workers, and Cargill added $2.00 an hour to all jobs.
How does the meat supply work?
Our food system is a resilient, finely-tuned machine. It operates more like the SpaceX shuttle by Elon Musk than a Wilbur and Orville Wright bi-plane. On average, Americans eat 227 pounds of meat every year, or about 9 ounces a day. Before COVID, we could plan on 120,000 cattle, 400,000 pigs, and 25 million chickens getting processed every single day to meet U.S. and export demand. It is a tremendous system. Think about how much planning goes into creating a consistent and safe food supply for grocery stores, restaurants, hotels, coffee shops, schools, institutions, and fast-food franchises all across the country.
If you ate a juicy hamburger this past Saturday, the calf was conceived in July 2017 and born in April 2018. It then took approximately two years from the time it was born until it came to your plate.
The hog supplying the bacon and sausage you recently had for breakfast was bred last July and took about six months to grow.
Conversely, the chicken you ate on Sunday night was a new egg only eight weeks ago – and took six weeks to grow from an egg to a chicken. Because of these timetables, you cannot just turn on or off the spigot with cattle and pork the same way you can with poultry.
Each category has a unique supply chain that brings specific challenges to bear as we face COVID-19. There are hundreds of thousands of farmers, growers, and operators that grow the animal or bird. When the system operates smoothly, all the animals go from the processor to the food distributors and then directly to the grocery store and food service. But when disruptions like COVID hit the chain, challenges arise that our food supply has to address. In the case of meats, the bottleneck occurs at the processing level.
Slower processing: The effect on poultry, pork, and beef
When meat processing volume slows down, it creates an excess of animals on the front end.
Poultry. Chickens take such a short period of time to grow that farmers can hold off on hatching the eggs to let the chicken supply flow through before starting the next flock. But then you might end up with too many eggs. Many breeders have euthanized some of their chickens already.
Pork. Pigs are a different story. Most of the pig farms breed and grow their pigs for the entire six months. A pig cannot just be put out to pasture to wait it out. A pig takes up room – a lot of it – and the next crop of piglets is being born every day. The only option here is for the farmer to begin euthanizing either their piglets or the mature hogs.
Beef. The beef industry can slow down the supply as the cows can remain in a holding pattern on the range, in the feedlot, or on the ranch. The feedlots can reduce the cows’ feed enough to keep them from gaining weight.
There is no doubt about it: farmers and ranchers are hurt by having to hold on and feed them – or worse – in the case of pork – euthanize them. Until we are clear of COVID-19, the USDA announced a $19 billion relief program to help farmers, ranchers, and distributors who have been adversely affected.
But if the supply is slowing, won’t we run out of meat?
With production slowing from bottlenecking at the processing level, consumers are starting to fear that a decrease in meat production will mean a decrease in availability of meats at their grocery stores. However, the economy is leveling out meat demand. With the U.S. GDP falling almost 5% in the first quarter, it is estimated that more drops are on the horizon, with a 30% anticipated decrease by the end of the second quarter.
The stock market is providing a very real and very scary read on the health of various industries. In the last few weeks, the S&P has seen price drops of between 8 to 25% due to decreased earnings. And at least 30 million American are applying for unemployment.
Why is this important? As many industries get hit hard and workers get furloughed or let go, many of us are forced to adjust our spending to meet a tighter budget. Generally, when incomes drop, one of the first food-related budget cuts are expensive red meats; the second is pork, and finally chicken. For instance, we might switch from a filet to ground beef. Or, we might stretch meat to last longer by making casseroles and soups. This is why the USDA is forecasting an increase in chicken production, but a decline in beef and pork.
Prices will be higher because of the disrupted supply. At the week ending on May 1, the 85% lean hamburger you ate on Saturday night cost $3.74 a pound compared to $3.59 last year. But a much more expensive filet mignon at $12.23 a pound has experienced an 18% price increase from just last week. Conversely, the bacon you had for breakfast is 10% cheaper than last week. But the pork tenderloin you might buy for dinner is 5% higher than the week before, and 14% higher than last year. Yet your wallet is relatively safe with the chicken breast for Sunday night’s dinner, as the value pack dropped by 5% since last week.
Retail versus Food Service
The money we spend on food in this country is allocated almost 50/50 between direct-to-consumer retailers, like the grocery store, and to food service operators, restaurants, cafeterias, and the like. Today, the food once headed to your favorite corner bistro is being rerouted to your neighborhood Stop & Shop. Yes, thankfully, our food system is flexible, and set up in a way that enables it to change allocations from food service to retail relatively quickly.
JBS indicated their flexibility:
“Very few lines, in our case, cannot be immediately used for retail. Maybe some of the lines in bacon is specific for food service, in that specific you don’t have the proper package, but it’s very small. I would say irrelevant. So in our case, we can change pretty much 100% what was done before for food service. If demand reduces in 50% for food service, we can immediately transform that to retail with very, very little impact.”
It’s unlikely that the same volume of meat purchased at food service will entirely be picked up by demand at the grocery store. America has approximately 660,000 restaurants closed or operating at limited capacity right now. Just at the end of March, the restaurant industry lost approximately $25 billion in sales and 9 million people lost their jobs. Even the top-two fast food enterprises, McDonald’s and Starbucks, are seeing a significant impact on their revenue.
Should we run and fill our freezers?
There will still be enough meat in the grocery stores for you to meet your protein requirements of 80 – 100 grams a day, depending on your activity level. Your favorite cuts might not be available, and some might be more expensive, but there will be enough. To help manage this, stores like Kroger’s and Costco are encouraging customers to limit meat purchases to 3 to 5 items per visit.
We have enough meat moving through the system and the meat supply chain is resilient and adaptable. If you run to fill your freezer for the next months’ worth of meals, you will just be putting more pressure on the grocery stores to stock their shelves and more pressure on the meat lines to increase their supply. And within your community, you’re also denying your fellow neighbor their selection.
Whether our meat turns into a toilet paper crisis – that is up to each one of us.
The Bottom Line
If you want to eat your protein through this pandemic – don’t panic. While the closing of meat plants is a serious situation, it is not the end of meat. Consumer demand is decreasing alongside decreased production due to a drop in GDP, changing consumer behavior, and the shift from food service to retail. The meat plants and their courageous workers are all working hard to keep the production lines open and safe. The most important thing for you to do for your family, and for your community is to simply buy your meat as you always would, on a weekly basis. Let’s work together to not make meat another toilet paper crisis.