Meat shortages

Daily 202 via WaPo – by James Hohmann
with Mariana Alfaro

11 states seek DOJ investigation of meat shortages and price hikes amid coronavirus contagion

Where’s the beef?

President Trump signed an executive order last week that designated meat processing plants as critical infrastructure and their employees as essential. He used the Defense Production Act to compel continuing production through the coronavirus pandemic, after several plants closed when they became hot spots for the contagion.

But the move did not come soon enough to avert shortages of pork and beef – and rising prices.

About 1 in 5 Wendy’s restaurants across the United States do not have the meat to sell hamburgers right now. That’s more than 1,000 locations, according to Stephens Inc. “It is widely known that beef suppliers across North America are currently facing production challenges,” the fast-food chain said in a statement. “Some of our menu items may be temporarily limited at some restaurants in this current environment.”

McDonald’s said it has not had shortages yet. But companies like Wendy’s that use fresh beef in their burgers, as opposed to frozen patties, have taken a more immediate hit. Shake Shack executives said they’re more worried about rising prices for their core product than shortages. “We do not, today, expect a supply issue. However, costs have really jumped,” Shake Shack chief executive Randy Garutti said during a Monday call to announce first-quarter earnings. Chief Financial Officer Tara Comonte added that beef prices have risen significantly over the last month, “with the largest increase being realized over the last week,” according to CNBC.

Local news outlets from coast to coast are reporting on strains in the supply chain and restrictions in local stores, including Philadelphia, Detroit and Omaha.

Vice President Pence will visit Iowa on Friday to discuss the food supply, the White House announced this morning. In addition to meeting with religious leaders to discuss reopening churches, Pence plans to hold an event at the West Des Moines headquarters of Hy-Vee, which imposed limits on meat sales at its stores this week. Customers at the popular Midwestern grocery store chain are now allowed to buy just four packages of beef, pork and chicken. Trump also plans to discuss the food shortages this afternoon during a meeting with Iowa Gov. Kim Reynolds (R) at the White House.

Hy-Vee is not alone. Costco has limited shoppers to buying three items of beef, pork or poultry. Kroger has limited beef and pork purchases at some, but not all, stores. Stop & Shops in New England have instituted a two-package-per-customer limit.

A bipartisan coalition of 11 state attorneys general sent a letter to Attorney General Bill Barr on Tuesday asking the Justice Department to investigate accusations of anticompetitive practices by meatpacking companies in the face of the growing shortages. “The U.S. beef processing market is highly concentrated, with the four largest beef processors controlling 80 percent of U.S. beef processing,” the officials wrote in their letter. “In short, with such high concentration and the threat of increasing consolidation, we have concerns that beef processors are well positioned to coordinate their behavior and create a bottleneck in the cattle industry — to the detriment of ranchers and consumers alike.”

The attorneys general of Colorado, Minnesota, Missouri, Montana, Arizona, Idaho, Iowa, North Dakota, Nebraska, South Dakota and Wyoming signed the letter, which noted that they may take state-level action if antitrust officials fail to take action. Fox Business reports that the National Cattlemen’s Beef Association has been asking for this since last month, alleging that the four big packing companies – Cargill, National Beef, Tyson Foods and JBS – are driving down the price of cattle while raising the price of packaged beef amid the pandemic.The North American Meat Institute, which represents all four companies, denied that anything improper is happening and said the industry is transparent. “We are working together with livestock organizations to ensure meatpacking and processing plants continue to operate so that our products can come to market,” said Julie Anna Potts, the trade group’s president, in a statement. “At the outset of this terrible pandemic, we had to switch some of our production from foodservice to retail. We are learning lessons every day in unchartered territory.”

Tyson Foods revealed on Monday that U.S. hog processing capacity has dropped by 50 percent. Three of Tyson’s six main U.S. processing facilities were forced to closed after coronavirus outbreaks, and others had to operate at reduced capacity because of infections. One of the three plants – the country’s largest pork processing facility in Waterloo, Iowa – plans to reopen on Thursday after an outbreak forced a two-week closure. The company said workers will be screened daily and will only be allowed to return to their jobs on the line after they test negative for covid-19, the disease caused by the coronavirus. More than 180 cases were linked to the plant in Waterloo, which processes an average of 19,500 hogs a day, accounting for about 4 percent of the country’s pork production. “Our top priority is the health and safety of our team members, their loved ones and our communities,” Tom Hart, plant manager of the Waterloo facility, said in a statement.

More than 700 employees at the Tyson plant in Perry, Iowa, tested positive for the coronavirus, or 58 percent of the workforce, according to an Iowa Department of Public Health report released Tuesday, per the Des Moines NBC affiliate. Last week, nearly 900 workers were confirmed to have the virus at a Tyson plant in Indiana. There have been other major outbreaks at Smithfield facilities, including in South Dakota. The Washington Post reported last month that multiple meat processors failed to provide masks to workers at plants like the one in Waterloo until April. Some workers said they were given confusing instructions about when to return to work or told to come in while sick.

Presumptive Democratic presidential nominee Joe Biden blasted the treatment of the meat packers during a video town hall for the League of United Latin American Citizens on Monday and criticized Trump for not doing more to help them. “They designate them as essential workers, then treat them as disposable. It’s quite frankly, inhumane and downright immoral,” said Biden, who proposed a $13-per-hour minimum pay raise for the processing plant employees, per PBS.

Americans eat more meat per capita than any other country in the world. Even as we face shortages, however, China is buying up our more limited pork supply. And Trump’s trade deal with Beijing that compels the regime to buy more American agricultural products is partly to blame. “American pork supplies are being shipped off to China at a breakneck pace, creating the perfect recipe for additional U.S.-China tensions,” Reuters reports. “China began slowly losing its hog herd, the world’s largest, in August 2018 as African swine fever began to spread through the country. This has curbed the country’s pork production by at least a third, forcing China to rely on imports more than usual.”

Local leaders and industry representatives are warning against panic buying, like we saw with toilet paper, which could quickly exacerbate the problem. But analysts say the problem is much bigger than hoarding. “The problems at Wendy’s are most likely only the beginning of fresh beef shortages that may reach their peak around Memorial Day, when many Americans will be firing up grills,” the New York Times reports. “Last week was the fourth week in a row that the number of cattle slaughtered fell below 500,000, down more than 35 percent from average beef production, according to Cassandra Fish, a meat industry analyst. … It can take about three weeks from the time cattle are slaughtered for the meat to be sold in the grocery store.”

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