Factory Shutdowns and Milk Dumping... US Food Industry 'Groans' Under COVID-19 Impact

[Image source=Reuters Yonhap News]

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Concerns over food supply disruptions are growing in the United States. Some employees of meat processing companies have tested positive for COVID-19 or have decided to stay home due to infection concerns, increasing the likelihood that food supplies will not be delivered on time. In the dairy sector, prices have plummeted due to a drop in dairy product consumption, leading to situations where milk is being discarded.

According to the Wall Street Journal (WSJ) on the 6th (local time), Tyson Foods, the largest meat processing company in the U.S., announced that it would halt operations at its pork processing plant in Columbus Junction, Iowa. This decision came after more than 12 employees at the plant tested positive for COVID-19. Tyson Foods plans to transfer pork shipments from the plant to nearby facilities and provide employees with a week of paid leave. Another plant will also be closed for a day for disinfection.

Meat processing plants are known to have a high risk of COVID-19 infection because hundreds of employees work side by side. Employees’ anxiety about COVID-19 infection is even greater. For this reason, U.S. meat companies, including Tyson Foods, have been temporarily closing their plants one after another.

JBS USA Holdings, the U.S. branch of the world’s largest beef producer JBS, announced over the past weekend that it would close its beef processing plant in Souderton, Pennsylvania, for two weeks. More than 1,000 employees produce ground beef and other products at this plant. Last week, some managers showed suspected COVID-19 symptoms and were asked to stay home, and production has been gradually reduced. JBS plans to resume operations at the plant starting on the 16th.

Despite the repeated shutdowns of meat processing plants, there are reportedly no short-term problems with meat supply in the U.S. According to the U.S. Department of Agriculture, the amount of chicken in frozen storage reached a record high of 925 million pounds as of February 29. Supplies of frozen pork and beef also increased by 5% compared to February last year. This is attributed to reduced meat consumption due to social distancing measures such as refraining from going out.

On the other hand, the decline in consumption has hit dairy farmers hard. They have begun discarding large quantities of freshly milked milk. According to Bloomberg News, milk futures prices fell to $13 per 100 pounds, the lowest since May 2016. Cheese futures prices also hit their lowest point in a year. This is because large buyers of dairy products such as restaurants, schools, and hotels have all closed due to COVID-19.

Besides dairy farmers, a pumpkin farm in Florida plowed under its fields due to lack of demand, and corn ethanol plants in Iowa and Nebraska have closed due to decreased energy demand, Bloomberg reported.