Business & Lobbying

Five factors to watch in the meat supply chain crisis

The fragility of the nation’s meat supply chain is being exposed by the coronavirus pandemic, creating challenges for the industry to get food on American tables.

Processing plant closures have disrupted the supply chain and put a spotlight on worker safety.

President Trump sought to head off further disruptions by invoking the 1950 Defense Production Act to declare the plants “critical infrastructure.” The order compels facilities to remain open during the pandemic.

But that has yet to alleviate the problem.

Here are five factors to watch in the meat supply chain crisis.

Many meat plants are closed

A number of meat plants have had to close because workers have come down with the coronavirus.

People working in meat plants work in close quarters, making the virus easy to spread.

As long as a number of plants are closed, threats to the supply chain will be a part of life.

Agriculture Secretary Sonny Perdue said last week that meatpacking plants will reopen in a matter of “days, not weeks” after Trump’s order, but companies are still facing closures.

A JBS plant in Wisconsin, which feeds nearly 3.2 million Americans every day, remains closed and reported that about 200 workers tested positive for the coronavirus

Tyson Foods said it will resume limited production on Thursday at its largest pork plant in Waterloo, Iowa, after it closed due to absent workers.

Tyson also reopened a Washington plant, another Iowa plant in Columbus Junction and a pork plant in Indiana. But it temporarily closed a Nebraska plant for a deep cleaning after an undisclosed amount of workers tested positive. 

Meat companies are working to reopen plants quickly, and the North American Meat Institute said following Trump’s order that, as long as worker safety is the first priority, “facilities should be allowed to reopen.”

Calls for more worker protections

Companies are facing new calls to protect workers given a serious of outbreaks across the country.

Protections for workers are likely to be critical, and plants may be slower to open as they seek to put them in place.

Tyson Foods said its facilities has been screening workers’ temperatures, requiring protective face coverings, conducting additional cleaning and sanitizing and implementing social distancing measures. The company also warned on Monday that more closures are expected and that it predicts “slowdowns” due to “team member shortages.”

Sanchoy Das, professor of engineering at the New Jersey Institute of Technology, said the easiest solution for plants is to socially distance workers by spacing them further apart, which will inevitably lead to a decrease in production.

“Even if they do open, it will probably be at a much lower capacity if they are going to try to socially distance inside the plants,” he told The Hill in a recent interview. 

Unions are calling for guaranteed protections. The United Food and Commercial Workers Union asked the administration to consider them for prioritized testing and provide personal protective equipment (PPE) for workers.

Sen. Dick Durbin (D-Ill.), a member of the Senate Agriculture Committee, said last week that workers are in danger due to the close proximity of meat processing lines, and Rep. Jim Costa (D-Calif.), a member of the House Agriculture Committee, said that the administration must provide resources to ensure the health and safety of workers.

A liability shield for businesses

There’s already been one case of a meat processing company being sued due to worker protection issues.

Smithfield Foods is being sued over allegations that it failed to protect workers in a Missouri plant by forcing them to work “shoulder to shoulder” and providing inadequate protective gear. The company said the claims were unfounded.

Providing a liability shield for businesses is a sticking point in negotiations in Congress over another round of coronavirus relief aid.

Senate Majority Leader Mitch McConnell (R-Ky.) has said the GOP-controlled Senate won’t pass a bill providing more assistance to state and local governments, an issue Democrats are pushing, if it doesn’t include legal protections for companies.

Democrats and unions are strongly opposed to providing a layer of legal protection from coronavirus-related litigation for businesses, noting that companies haven’t provided adequate protections for workers during the pandemic.

“It’s absolutely outrageous that employers and corporations are trying to shirk their legal responsibility at the same time they’re refusing to provide protective equipment and paid sick days to their workers,” Mary Kay Henry, president of the SEIU, told The Hill last week.

The U.S. Chamber of Commerce is a leading voice pushing for Congress to include such protections, arguing that businesses that protect workers shouldn’t be liable.

Neil Bradley, executive vice president and chief policy officer at the Chamber, told reporters on Tuesday that it should be common sense that “if you’re trying to do the right thing, if you’re following the instructions of officials, you shouldn’t be second guessed after the fact.”

Shift in supply chain

Meat suppliers have faced plummeting sales as restaurants, schools and other venues they supplied have closed.

The National Chicken Council, which represents about 95 percent of the chicken produced in the U.S., reported last month that sales are up for retail but not enough to offset food service losses, which is roughly 50 percent of its market.

This has also led to problems in the supply chain.

For companies to shift all sales to retail, they have to have the right tools, packaging, labeling and business relationships.

The Agriculture Department said it will take time for the supply chain to adapt.

“The way that food is prepared and packaged to be sold to a restaurant or school is significantly different than the way it’s packaged for you to buy in the grocery store. Our food supply chain needs time to adjust to these changes that have happened in a very short period of time,” a spokesperson told The Hill in a statement.

Krista Foster, supply chain management professor at the University of Notre Dame’s Mendoza College of Business, said disruptions will continue until the supply chain is reworked.

“There is the demand, but they’re not aligned in the way that they were three months ago, so changing the supply chain to match them up again is a little bit of challenge,” Foster said.

Calls for antitrust investigations

The fragility of the food supply chain is raising eyebrows on Capitol Hill.

Sens. Josh Hawley (R-Mo.) and Tammy Baldwin (D-Wis.) asked the Federal Trade Commission (FTC) to open an antitrust investigation into the meatpacking industry, noting that a few companies dominate it.

“Following a spate of COVID-19 infections among plant workers, in recent days these oligopolistic companies have closed three pork plants indefinitely, resulting in the shutdown of a staggering 15 percent of America’s pork production,” the senators wrote to the FTC, referring to Smithfield plants in Missouri, Wisconsin and South Dakota that have closed.

Eleven state attorneys general asked the Department of Justice to investigate anti-competitive practices in the industry.

“In this highly concentrated industry, meat packers have achieved sizeable profit margins. Cattle ranchers, however, who for generations have supplied our nation’s beef, are squeezed and often struggle to survive,” the attorneys general wrote to the Justice Department on Tuesday.

Tags Coronavirus Dick Durbin Donald Trump Jim Costa Josh Hawley Meat packing plants meat shortage Mitch McConnell Sonny Perdue Tammy Baldwin

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