Alabama Cooperative Extension System
Smithfield Foods has closed a major pork processing facility in South Dakota causing concern about meat supplies and possible shortages among consumers, industry professionals and political pundits.
An economist with the Alabama Cooperative Extension System said consumers should think about the industry as a whole and the long-term logistics of moving not only meat supplies but also all food in the United States.
Supply Chain Challenges
“While the closing of the South Dakota plant as well as others around the nation is significant, it does not threaten the nation’s protein supplies long term when you consider the abundance of beef, pork and poultry production that is out there,” Ken Kelley said. “The United States was and is amid record production of beef, pork and poultry. The issue now is not availability of animals, but the logistics of processing and movement.”
Kelley noted that the supply chain and processing issues are significant. But they are issues that can be addressed to ensure that the abundant supply of proteins that America’s farmers are producing gets to grocery store shelves.
He cited a Farm Policy News article quoting the Wall Street Journal reporting that “The Trump administration is weighing a plan to provide coronavirus tests and other solutions to U.S. food-processing plants, as a way to soothe workers’ fears and keep the country’s food system functioning through the pandemic.”
Changing To Meet Demand
“This is a supply chain issue,” Kelley said. “It takes time for the industry to change from current production and convert to meet the current demand, but they will do it. It also takes time to adjust for issues related to worker health, but they will do it.
“Before the coronavirus outbreak, a lot of processing capacity produced for the restaurant and service industry. Now they are having to shift more capacity into retail products that consumers buy at grocery stores.”
Many processing plants are geared to produce for a specific niche market such as fine dining or fast food. Some facilities have contracts with major food outlets to produce a very specific product such as four-ounce chicken breast portions.
These facilities can restructure their operations, but Kelley said it will require time and money.
He also pointed out that last year the nation experienced a similar supply chain issue with meat supplies when a Tyson processing plant burned.
“Everyone was concerned that we would not be able to meet demand because that plant was shut down for a while,” he said. “What we found was that the other plants more than covered the production lost from that plant. We discovered increased production was possible across the system.”
Grocery Shopping Surges
Consumer buying research shows that grocery store sales reached the highest level in history during the week ending March 15. According to Information Resources Inc., grocery sales were an eye-popping 62 percent higher than the same week in 2019.
“The jump in grocery sales is because people are shifting from restaurants to food for at-home meal preparation,” Kelley said. “This highlights the unknown of the current food consumption patterns. Panic buying could negatively affect the supply issue even more.”
Consumers may find that not every product or cut of meat is available in the short term.
“People may have to choose a roast instead of a steak or even ground beef,” he said. “The issues certainly are significant, and the industry and nation as a whole have to address them. However, we enjoy the safest and cheapest food supply in the world.”