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US and Canadian plant closures, as COVID-19 impacts meat production capacity

Jon Condon, April 14, 2020

POSITIVE disease detections among staff are causing North American meat processing plants to close, while New Zealand red meat processing capacity has been reduced through disease control measures, in the latest COVID-19 developments.

Reports out of North America suggest about a dozen large beef, pork and chicken processing facilities have had to shut their doors – either temporarily, or for an unspecified period, as staff fall ill with coronavirus.

Photo George Black: 200 butchers in the boning room makes for very fast processing.

Among them are plants run by some of the industry’s heavyweights, including Tyson, Smithfield and JBS.

Smithfield Foods, the world’s biggest pork processor, on Sunday indefinitely closed its Sioux Falls, South Dakota, processing plant that produces about five percent of all US pork. The meat processor’s chief executive, Kenneth Sullivan, warned in a statement that plant shutdowns were pushing the US “perilously close to the edge” in meat supplies.

“It is impossible to keep our grocery stores stocked if our plants are not running,” he said. “These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain.”

About 240 employees from the Smithfield plant have been sickened by the virus.

Here’s a quick snapshot of some other the affected North American facilities, from across the web:

  • JBS USA said on Monday it would close its beef plant at Greeley, Colorado, until at least April 24. The plant slaughters about 5400 cattle a day, about 5pc of the total US beef daily kill. Dozens of plant employees have tested positive for COVID-19. “While the measures we have taken within our facility to improve safety have made a positive impact, COVID-19 remains a threat across the US and in Weld County, which is why we are investing more than $1 million in COVID-19 testing kits for our team members,” said Andre Nogueira, JBS USA CEO, in a statement issued to media. “Greeley is our home and more than 6000 JBS team members and their families live in Weld County. No matter what measures we take in our facilities, we must all work together to prevent the continued spread of coronavirus in our communities,” he said.
  • Tyson Foods said on Monday it is keeping a pork facility in Columbus Junction, Iowa, shut this week, having closed it on April 6 after more than 24 cases of COVID-19 involving employees.
  • National Beef Packing Co suspended cattle slaughtering at an Iowa Premium beef plant until the week of April 20, after numerous employees tested positive for the virus, according to an announcement on its website. It had earlier shut the plant during the week of April 6 for cleaning.
  • Aurora Packing Co closed a beef plant in Illinois, while Harmony Beef in Alberta, Canada, shut its cattle slaughter operations on March 27, after a worker tested positive for coronavirus, and an Olymel pork plant in Quebec, shut on March 29 for two weeks after nine workers tested positive.
  • Several North American poultry plants have also closed, or reduced operations after disease detections.

Difficult to assess impact

Steiner Consulting’s US Daily Livestock Report issued this morning says reports of individual US plant closures are changing and updating frequently, based on a variety of circumstances, which made it difficult to assess the impacts.

“Decreases to US slaughter capacity are expected to cause bottlenecks in the supply chain and is expected to continue shaking these markets,” Steiner said. “That will alter cuts available, or may change packaging quantities to reduce the level of labour needed to produce red meat.”

Already, vacuum-sealed whole primals are showing up in some US grocery stores, Steiner said.

“This is likely a signpost of labour and pandemic-related strategy changes at US slaughter plants,” it said.

“Extreme bottlenecks could lead to shortages at the grocery store of specific items. But it seems unlikely that the US packing industry will stop slaughtering animals completely,” Steiner said.

“A key point to remember is from animal harvest to grocery store is roughly a 2-3 week lag, so we do not expect to see the brunt of the plant closure impacts to hit grocery stores for several more weeks.”

JBS provided a list of measures the company is implementing to try to stop the spread of the virus.

These included:

  • Increasing sanitation and disinfection efforts, including whole facility deep-cleaning every day
  • Promoting physical distancing by staggering starts, shifts and breaks, and increasing spacing in cafeterias, break and locker rooms, including plexiglass dividers in key areas
  • Significantly increasing the number of dedicated staff to continuously clean facilities
  • Temperature testing all team members prior to entering facilities, including the use of hands-free thermometers and thermal imaging testing technology
  • Providing extra personal protective equipment (PPE), including masks
  • Removing vulnerable older populations from facilities, offering full pay and benefits
  • Requiring sick team members to stay home from work
  • Waiving short-term disability waiting periods
  • Relaxing attendance policies so people don’t come to work sick
  • Providing free 100pc preventative care to all team members
  • Offering free online services that allow for virtual doctor visits at no cost

In its statement, JBS said it was optimistic that increased screening and testing would provide confidence to its workforce and the community that this critical infrastructure facility will continue to operate and provide food for local families and the country during these challenging times.

NZ reduces meat production capacity

New meat processing protocols designed to minimise spread of COVID-19 have reduced the New Zealand industry’s peak processing capacity by about 50 percent for sheep and 30pc for cattle, reports out of NZ this week suggest.

COVID-19 will continue to impact heavily on the opportunity to get stock killed during April and May, NZ farmers were warned.

The impact is due to physical distancing requirements between meat plant employees to prevent the spread of the virus

Beef + Lamb NZ’s Economic Service, in conjunction with the Meat Industry Association and the country’s processors, have released an assessment on processing capacity across the country and the potential impact on waiting times for farmers. The modelling was based on these protocols remaining in place for eight weeks from the start of April.

Both BLNZ and MIA say they are acutely aware there are already significant waits for slaughter space some farmers – especially on drought-hit regions of the country.

BLNZ says that bull processing was likely to be unaffected, because the peak of processing occurred in January. However, it said NZ farmers can expect a week’s delay – on top of any current backlog of prime steer and heifer – on both islands in May.

Steiner Consulting said that North American meat traders now had to consider a much more uncertain funding environment and the need to maintain higher cash reserves.

“Market participants noted that New Zealand production has declined sharply following changes in processing line configurations and processing speed. As Australia starts to adopt more stringent measures to control the spread of coronavirus, it is expected that a similar situation may develop there as well. But it should also be noted that this is only speculative at this point.”

No positive detections in Australian processing – yet

Australian Meat Industry Council chief executive, Patrick Hutchinson said there had been no positive test results for COVID-19 reported in Australian meat processing plants to date.

Elaborate systems and procedures established to avoid virus spread in meat processing environments had done their job to this point, Mr Hutchinson said.

“Collaborating with state health departments and others, AMIC has provided very clear directions to processor members around putting together programs designed to manage the risks,” he said.

“Individual companies are not only following those protocols, but taking their own initiatives, including temperature testing all personnel entering a meat plant each day – right down to the delivery drivers.”

AMIC has recently surveyed members, and without exception, all had increased their sanitation, sterilisation and micro-testing, beyond even what the protocols had suggested.

Mr Hutchinson said it was to Australia’s advantage (in a disease risk sense) that most meat processing plants in this country were located in regional areas, where COVID-19 rates of infection were relatively lower than in metropolitan areas.

“Our risk profile is perhaps a little lower, whereas in the US, many processing plants are much closer to very large population areas,” he said.

“We have to give people confidence in the fact that it is safe to go to work. Personal Protective Equipment was scarce for a while, but that is now gone, for example.”

If a positive was detected among staff, 90pc of AMIC members now had contingency plans in place to manage that eventuality, he said.

“All are doing additional disinfection, increased hand-washing and sanitation, and procedural changes – and 80pc of members have expressed a positive shift in culture, in-plant, now that they have started going down this route.”

Asked whether there was opportunity for Australia in wind-backs in US, Canadian and New Zealand beef production under COVID, Mr Hutchinson said these might come indirectly, through opportunities in other countries like Japan, and Korea, where Australian beef would normally compete with product from the US.

While some metropolitan media had started asking questions around ‘food security’ under COVID-19 controls, Australia had been very strategic in the way it was managing the issue, and the federal government had recognised that meat had now become a ‘non-discretionary spend’ for many consumers, he said.

 

 

 

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