National grocery chains have started putting per-customer limits on certain meat products due to disruptions in the supply chain related COVID-19, but producers in Alabama do not believe prolonged shortages will be a problem locally.
Concerns about the availability of meat products became national news after the chairman of Tyson Foods — one the largest meat processors in the United States — warned that the U.S. “food supply chain is breaking” due to impacts from the coronavirus. Though President Donald Trump signed an executive order declaring meat production facilities a essential, critical infrastructure, problems have persisted.
On Monday, the Washington Post reported three of Tyson’s six primary U.S. processing facilities remain closed, and three others are operating at reduced capacity due to ongoing outbreaks of COVID-19 among workers. Smithfield Foods also closed a major pork processing facility in South Dakota last week.
Alvin Williams, a professor of marketing and quantitative methods at the University of South Alabama, said supply chains are always adapting to meet demand. However, because some of these companies own such a large share of the market, he said impacts on their facilities can be felt across the industry.
“Given the size of those firms — Tyson, Smithfield, JBS — some would say they account for almost a third of the meat supply chain in the U.S.,” Williams said. “I think it’s also important to look at the upstream issues. Cattle farmers, hog farmers and poultry farmers — what do they do with their output at this point if it’s not being processed? There’s some real concerns all up and down the food supply chain.”
While that could lead to some hiccups in the food supply chain, Williams said sustained shortages are generally not expected. Some national retailers like Costco, Walmart and Kroger have started putting limits on meat purchases, but that has mostly been to prevent consumers from hoarding what is available.
While there is still enough meat to go around, Williams said the thing most likely to lead to barren shelves at local grocery stores is “panic buying” among consumers.
“I believe there’s enough inventory for us to make it for a while, if we can discourage panic buying like we’ve seen before with bathroom tissue, paper towels and that kind of thing,” he said. “But to be honest with you, it can be difficult to stem the tide. The only thing retailers can do is implement limits, but that can also cause the perception of shortages. Panic buying kind of generates its own energy.”
Ken Kelley, an economist with the Alabama Cooperative Extension System, said in a recent press release that, because of the COVID-19 pandemic, the industry is also having to shift how it disburses its products and who it’s distributed to — something that can take time, as a lot of moving parts are adjusted.
“Before the coronavirus outbreak, a lot of processing capacity was produced for the restaurant and service industry. Now they are having to shift more capacity into retail products that consumers buy at grocery stores,” Kelley wrote. “It takes time for the industry to change from current production and convert to meet the current demand, but they will do it.”
Kelley said consumers may find that not every product or cut of meat is available in the short term, but he expressed confidence in the long-term stability of the food supply chain. Williams echoed those same sentiments, but warned that increased demand and strain on suppliers could lead to higher prices.
“We’re going to have costs associated with this, some opportunity costs and some real costs, and I think to the extent possible some of those may be distributed throughout the supply chain and down to the consumer,” he said. “At some point, the uncertainty we’re seeing will be reflected in the prices we pay.”
As for the producers in Alabama, no major processing facilities have been shut down, though some outbreaks have been reported in chicken processing plants. One Wayne Farms facility in Albertville had reported 75 positive cases and at least one death among workers as of last week. However, the Alabama Poultry & Egg Association has maintained that companies are taking steps to keep production steady and workers safe.
Agricultural industries, like many others, across the state are having to adapt to navigate a very uncertain situation. But fortunately, Alabama has not faced the backups in supply chains seen in other states, which have led to reports of livestock being euthanized and unsold crops rotting in fields.
Mary J. Wilson, director of news services with the Alabama Farmers Federation, said for the most part meat production has remained steady, and some produce farmers have even seen increased demand as most of them grow crops for sales directly to consumers and not for wholesale distribution.
“The impact that we’re seeing, particularly on cattle farmers, is that they are either selling their animals for less than they normally would and taking losses, or they’re holding on to their animals for a longer period, hoping for better prices,” Wilson said. “We’ve not seen an interruption for pork farmers because we really don’t have very many in the state. Poultry [farmers] have been able to take steps to slow production, which has helped because the backlog is really the processing facilities.”
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