June 12, 2020

 

US meat production has resumed but consumer prices likely to remain high

 

Meat production in the United States has reached pre-COVID-19 levels after plants were temporarily shut down due to the pandemic, but experts say consumer prices will remain high levels while it may take months for plants to go though a backlog of livestock, Associated Press reported.

 

The US Agriculture Department (USDA) said beef, pork and poultry plants are currently operating at 95% of 2019 levels, a 60% increase compared to April when many meat plants were temporarily shut down due to COVID-19.

 

Operations have resumed as major meat companies implemented new measures to protect its workers. These include installing plastic partitions between workers and staggering shift times.

 

Costs have increased due to these safety measures and new bonuses to incentivise workers. This will result in higher prices in grocery and retail stores. It will take some time for prices to drop for consumers when wholesale prices do fall.

 

Lee Schulz, Iowa State University livestock economist said do not expect meat prices to fall even after wholesale prices have dropped. Grocery stores may not pass along all the price cuts as many have absorbed the increased prices and want to restore profit margins.

 

Glynn Tonsor, Kansas State University agricultural economist said meat processors have begun operating plants on Saturdays and produce larger cuts of meats to save time and boost production. Grocery stores and consumers would have to purchase a pork loin to cut into pork chops, instead of that being done at meat plants.

 

Will Sawyer, agribusiness bank Cobank protein economist said major meat producers need to find more methods to increase production to work through livestock backlogs. Before COVID-19, the plants projected to produce more meat than 2019.

 

There is a backlog of 1 million cattle and 2 million swine, an issue for farmers who cannot find the space to keep the animals and are forced to sell at lower prices. Some farmers were forced to euthanise livestock because of the lack fo space.

 

Sawyer said poultry plants have largely been unaffected by the pandemic as they are mostly automated. Production only dropped 5%.

 

Mark Lauritsen, United Food and Commercial Workers International uniondirector of the food processing and meatpacking division said companies need to ensure that plants do not become COVID-19 clusters, adding that there is concern for a second wave of infections with plants resuming operations at full capacity.

 

Lauritsen said while many meat plants have reopened, recently a JBS beef plant in Hyrum, Utah has reported an outbreak with 287 workers tested positive for COVID-19. The plant remains operational.

 

The union reported 13,150 workers from US meatpackers have been infected or came into contact with COVID-19. 57 have died.

 

-      Associated Press