Looming Meat Shortages Highlight Over-Regulation of Small Farmers, Processors

April 29, 2020 Updated: April 30, 2020

In an odd twist brought upon by shutdowns triggered by the CCP virus pandemic, farmers and ranchers around the country are killing off livestock, dumping milk, and breaking eggs even as warnings emerge about impending meat shortages.

The problem lies with a handful of giant meat processing companies that take in pigs, cows, and chickens from farms to slaughter, butcher, and package the meat that Americans eventually buy in grocery stores. Outbreaks of COVID-19, the disease caused by the CCP virus, have forced some companies to shutter some plants, while others are operating at a reduced capacity as some workers call in sick and others stay home in fear of being infected.

As a result, the national capacity to process pork was down 41 percent on April 28, according to Steve Meyer, an economist with Kerns and Associates. Beef capacity was down roughly 25 percent and chicken down by 7 to 8 percent.

The resulting bottleneck is leaving some ranchers with few options for dealing with livestock that processors can’t handle. Some have resorted to culling their herds and flocks to conserve feed and make space for new animals, resulting in food going to waste amid warnings of food shortages.

While the backlog could be relieved on a local scale by smaller meat processors, years of consolidation due to economies of scale in the meat processing industry have resulted in a handful of giant companies handling the vast majority of the business. Meanwhile, federal regulations, including the requirement for a full-time U.S. Department of Agriculture (USDA) inspector on site, make it nearly impossible for smaller meat processors to stay in business without scaling.

“There’s a bridge between the farmer and the supermarket,” Rep. Thomas Massie (R-Ky.) told The Epoch Times. “Over the years, we’ve decided to reduce it down to one bridge, and that bridge is breaking and crumbling. There are smaller bridges, and we need to divert the traffic across those smaller bridges—that would be the thousands of custom processors in the country. The pipeline is broken between the farm and the supermarket.”

Unlike other staples, meat is uniquely vulnerable to supply chain disruption due to intense consolidation in the industry. By contrast, bakeries around the nation remain small, localized operations due to the difficulty of shipping fresh bread over large distances. As a result, if workers at one bakery fall sick, another bakery can pick up the extra business, according to Christine Cochran, executive director at Grain Foods Foundation.

“In this particular pandemic, baking has a hedge in terms of their risk. Even if you have to take one bakery down because of a labor issue—COVID-19—you have all these other bakeries where you can ship production to,” Cochran told The Epoch Times. “But in the meat industry, there is a lot more consolidation. You have these really big processing facilities.”

While experts differ on the scale of the meat shortages that may take place, all agree that at least some shortages are likely to occur in some places. Massie believes the shortages will be broad and nationwide, saying, “You can’t shut down 25 percent of production and expect for there not to be shortages.”

Epoch Times Photo
Meat section in a Netcost supermarket in Brooklyn on April 28, 2020. (Petr Svab/The Epoch Times)

Others, like Meyer and Gregory Conko, senior fellow at the Competitive Enterprise Institute, expect the shortages to be localized and limited in time. The United States has hundreds of millions of pounds of meat in cold storage, Conko pointed out, adding that even more supply is coming to the market from the foodservice industry, which has been allowed to repackage meat for consumers.

“I don’t think we’re going to have hungry people that we don’t already have,” Meyer told The Epoch Times. “I do think that we’re going to have times and places that don’t have fresh pork in grocery stores.”

“There’s unlikely to be a shortage of meat in the United States,” Conko said. “But what we can expect are some supply disruptions, which means that in some grocery stores at various points over the next six to eight months, we’re very likely to see—all of a sudden—this grocery store doesn’t have pork chops, this other grocery store doesn’t have enough ground beef, and things like that.”

“Currently, supply for poultry products exceeds demand,” Gwen Venable, vice president of communications at the U.S. Poultry & Egg Association, told The Epoch Times. “There are also adequate supplies in cold storage.”

In response to concerns about meat shortages, President Donald Trump on April 28 signed an executive order invoking the wartime Defense Production Act to compel meat processing plants to remain open amid the pandemic. The president delegated the execution of the order to Department of Agriculture (USDA) Secretary Sonny Perdue. The USDA didn’t immediately release details on how the order would be implemented. In a statement, Perdue suggested that the federal government may assist plants with keeping employees healthy amid the pandemic.

“Our nation’s meat and poultry processing facilities play an integral role in the continuity of our food supply chain,” Perdue said. “Maintaining the health and safety of these heroic employees in order to ensure that these critical facilities can continue operating is paramount.”

According to Massie, who is a farmer himself and owns 60 head of cattle, the executive order doesn’t resolve the fundamental vulnerability in the meat supply chain.

“Their response is to add more government to a problem that the government has exacerbated,” Massie said.

Instead, the congressman pointed to a bill he has introduced for the past three years that would allow local meat processors to sell meat to local grocery stores under the inspection requirements of their respective states rather than the burdensome USDA mandates. Massie views the bill as a state rights issue as long as the meat products don’t cross state lines.

The pandemic has drawn attention to a battery of regulations that have stifled the nation’s response. The Trump administration has already waived dozens of rules to give more flexibility to federal agencies and the private sector.

“We’ve seen throughout this crisis, one after another after another, regulations that don’t really do all that much to help the public, which had to be waived or suspended or rolled back in order to facilitate an effective response to the crisis,” Conko said, adding that Massie’s bill would help solve the current roadblock in the meat supply chain.

A handful of major plants have shut down indefinitely due to major outbreaks of COVID-19 among the workers. In Sioux Falls, South Dakota, hundreds of workers from a Smithfield Foods plant tested positive for the virus. Smithfield is owned by a Chinese food giant with ties to the CCP. The Epoch Times previously reported that representatives from the parent company regularly visited the plant, with the most recent visit occurring one month after Trump imposed a travel ban on China. Two weeks later, Tyson Foods closed its biggest pork processing plant due to an outbreak.

Epoch Times Photo
Employees and family members protest outside a Smithfield Foods processing plant in Sioux Falls, South Dakota, on April 9, 2020. (AP Photo/Stephen Groves File)

Both industry leaders and media reports tend to refer to looming meat shortages as “food shortages,” but the problem is so far limited strictly to pork, chicken, and beef. Of the three, pork is the most vulnerable because pork producers have less flexibility. Cows have a longer life expectancy and can graze for sustenance. Chickens have a short production cycle and producers began to adjust weeks ago.

Beyond fresh meat, there are no signs of current or potential shortages with other staples.

“In the United States, we don’t have a problem,” Cochran said, in relation to grain staples such as soybeans, wheat, and corn. “We had very robust crops. Much of the grain can be stored.”

Some countries have imposed export bans on staples in response to the pandemic. Russia stopped wheat exports and India halted exporting rice. The export bans should prompt the Trump administration to review if halting some food exports is necessary, according to Meryl Kennedy, CEO of Kennedy Rice Mill.

“The executive branch should make sure that we do have food security,” Kennedy told The Epoch Times. “It’s not OK just to shut down a pork plant and import pork. We need to find ways to be able to produce that in our own country.”

Similar to the panic-buying of toilet paper during the early days of the pandemic, news of food shortages can easily lead to consumers hoarding food. Meyer suggests Americans stick to buying only what they need.

“Don’t hoard the limited supply that is there. Buy what you need and leave some for somebody else,” he said.

Massie, who has warned his followers on Twitter that “food shortages are coming,” hopes his prediction doesn’t pan out. “I really hope I’m wrong.”

“There are a small number of people who told me that I’m irresponsible for telling the truth because I will cause the problem to become worse,” Massie said. “But my belief is you tell the people the truth and let them work around it and solve the problems.”

Follow Ivan on Twitter: @ivanpentchoukov