(Washington D.C) - Meat processing plants closing and other causes for spiraling prices triggered by COVID-19 has producers appealing to USDA for relief.
USDA armed with $9.5 billion from the stimulus bill is being asked by the National Pork Producers Council for direct payments to producers and massive purchasing from a huge nationwide meat stockpile.
“We are taking on water fast. Immediate action is imperative,” said Howard “A.V” Roth, the NPPC president.
USDA Secretary Sonny Perdue said direct payments to producers hurt by COVID will be part of an upcoming relief package still being ironed out.
Todd Hubbs, a clinical assistant professor in agricultural commodities at the University of Illinois, said direct payments likely offer producers the best relief in the short term.
Long term, Hubbs said the answer is getting the processing plants open again so animals backed up on farms can start reaching the consumer and keeping other plants from closing until the COVID-19 outbreak subsides.
“The processing plants being closed is a real problem for farmers,” he said. Smithfield Foods after temporarily closing its huge South Dakota plant from hundreds of workers being infected announced April 15 it was closing two sausage and bacon operations in Wisconsin and Missouri.
The company said, “a small number” of employees at each of those locations tested positive and the Missouri plant simply couldn’t operate since it receives its raw materials from the idled South Dakota facility.
Kenneth Sullivan, president and CEO of Smithfield Foods, said the plant closures represent a “domino effect.”
“It highlights the interdependence and interconnectivity of our food supply chain,” he said.
The closure of the Smithfield operations followed temporary shutdowns of a Tyson pork processing plant in Columbus Junction, Iowa and a JBS meat processing facility in Greeley, Colorado.
According to USDA, more than 660 million pounds of frozen pork, 925 million pounds of frozen chicken and 491 million pounds of frozen beef are in the U.S. stockpile.
Schools being closed and restrictions on indoor dining in restaurants to help slow the spread of the virus are major reasons for having so much in reserve.
Roth said USDA can redirect the meat it would purchase from the stockpile to food banks to help with demand caused by the surge of unemployment from the nationwide lockdown.
Hubbs said the end of May futures for pork has dropped from .63 to .38 since mid-March because of high supply on and off the farm along with a drop in demand.
Demand was impacted not just by school closures and restaurants limited to take out and delivery.
Hubbs said a lot of people are watching their pennies from being laid off and worried about losing their jobs.
“We’re in a tough, tough situation right now,” he said. Even if the outbreak ended right away, Hubbs said he’s sure how long it would take for conditions to return to normal.
“Hopefully, by summer, we can start working through some of this stuff and find a way to get through it to the other side,” he said.
