Meat+Poultry - January 2021 - 19

A

larm bells started ringing through the
US meat and livestock industry over the
coronavirus (COVID-19) as early as last
February. That's when the virus' rapid spread
began to roil the global and US commodity
markets. Export slowdowns meant that red
meat and poultry products rapidly filled cold
storage facilities throughout the United States.
The disease outbreak by early March was
declared a global pandemic and continued
to wreak havoc on equities and commodity
markets. March 12 saw the largest one-day
selloff in US stocks since 1987 and live cattle
and hog futures prices continued to plunge,
along with cash prices for these animals.
The worst was to come, as the virus began
to infect workers at most meat and poultry
processing plants. Many plants reduced
production in early April to try and protect
workers. JBS USA's beef plant in Souderton,
Pa., was the first of more than 10 plants to
suspend all production temporarily.
Trepidation gripped the industry
throughout April and beef and pork production
levels declined to unprecedented lows relative
to plant capacities because of worker illnesses
and absenteeism. The last week of April saw
weekly cattle slaughter total 439,000 head, 68%
of available slaughter capacity. Weekly hog
slaughter fell to 1.553 million head, also under
70% of capacity. The average price of live fed
steers that week was 21% below the same
week in 2019 and the average carcass price for
live hogs was down 27%.

DOWN BUT NOT OUT
Remembering just how dire the challenges
were is extremely important due to the miracle
that occurred in May and June. The many
ways the industry tackled these challenges and
returned to normalcy in such a short time is
one of the greatest stories in the industry's long
history. Production levels returned to normal
levels by late June.
That production rebounded so quickly
after May is because meat and poultry companies had already started spending millions
of dollars to protect their workers. They have
now spent well over $1.5 billion on numerous measures inside and outside plants.
Meanwhile, they had to revamp production
lines because widespread restaurant closures
and restrictions transferred consumers' food

dollars from foodservice to retail establishments. This meant producing more cuts to
retail specifications and fewer for foodservice.
This will continue until widespread vaccination
occurs, the pandemic recedes, and foodservice
establishments resume normal activity.
Companies acted on numerous fronts to
protect their workers and pay them special
bonuses. Tyson Foods Inc., North America's
largest meat and poultry company, incurred
direct incremental expenses associated with
the impact of COVID-19 totaling $200 million
and $540 million for its fourth quarter ended
Oct. 2 and 12 months of fiscal year 2020,
respectively. It expects such costs to decline to
$330 million in fiscal 2021, the company said.

The many ways the industry
tackled these challenges and
returned to normalcy in
such a short time is one of
the greatest stories in the
industry's long history.
Meanwhile, Tyson sold far more beef to
retail outlets in fiscal 2020 than in 2019, in large
part because of the impact of the COVID-19
pandemic on foodservice establishments from
March on. Tyson's retail beef sales totaled $8.16
billion, up $735 million on 2019's $7.42 billion.
Its foodservice sales totaled $3.67 billion, down
$482 million from 2019's $4.15 billion. Beef
sales were thus 2.2 times larger to retail than to
foodservice, versus 1.78 times in 2019.

CHALLENGES LOOM
Meat and poultry processors still face
challenges. Most beef companies cite labor
shortages and worker protection as the
No. 1 issue facing the industry. This was clear
from companies' responses to Cattle Buyer's
Weekly's annual survey last November of the
Top 30 US beef packers. The main issue facing
the industry remains labor, noted Kazunobu
Nomura, president and chief executive
officer of Creekstone Farms Premium Beef.
COVID-19 magnified the issue, but it was a
major problem long before the virus came to
the United States. Even with a high level of
unemployment, packing plants are struggling
to run at capacity, he said.
www.meatpoultry.com | 01.21 | MEAT+ POULTRY

19


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Meat+Poultry - January 2021

Table of Contents for the Digital Edition of Meat+Poultry - January 2021

Meat+Poultry - January 2021 - 1
Meat+Poultry - January 2021 - 1
Meat+Poultry - January 2021 - 2
Meat+Poultry - January 2021 - 3
Meat+Poultry - January 2021 - 4
Meat+Poultry - January 2021 - 5
Meat+Poultry - January 2021 - 6
Meat+Poultry - January 2021 - 7
Meat+Poultry - January 2021 - 8
Meat+Poultry - January 2021 - 9
Meat+Poultry - January 2021 - 10
Meat+Poultry - January 2021 - 11
Meat+Poultry - January 2021 - 12
Meat+Poultry - January 2021 - 13
Meat+Poultry - January 2021 - 14
Meat+Poultry - January 2021 - 15
Meat+Poultry - January 2021 - 16
Meat+Poultry - January 2021 - 17
Meat+Poultry - January 2021 - 18
Meat+Poultry - January 2021 - 19
Meat+Poultry - January 2021 - 20
Meat+Poultry - January 2021 - 21
Meat+Poultry - January 2021 - 22
Meat+Poultry - January 2021 - 23
Meat+Poultry - January 2021 - 24
Meat+Poultry - January 2021 - 25
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Meat+Poultry - January 2021 - 29
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Meat+Poultry - January 2021 - 34
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Meat+Poultry - January 2021 - 36
Meat+Poultry - January 2021 - 37
Meat+Poultry - January 2021 - 38
Meat+Poultry - January 2021 - 39
Meat+Poultry - January 2021 - 40
Meat+Poultry - January 2021 - 41
Meat+Poultry - January 2021 - 42
Meat+Poultry - January 2021 - 43
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Meat+Poultry - January 2021 - 47
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Meat+Poultry - January 2021 - 50
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Meat+Poultry - January 2021 - 55
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Meat+Poultry - January 2021 - 60
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Meat+Poultry - January 2021 - 63
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Meat+Poultry - January 2021 - 65
Meat+Poultry - January 2021 - 66
Meat+Poultry - January 2021 - vdg - 1
Meat+Poultry - January 2021 - vdg - 2
Meat+Poultry - January 2021 - 67
Meat+Poultry - January 2021 - 68
Meat+Poultry - January 2021 - 69
Meat+Poultry - January 2021 - 70
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Meat+Poultry - January 2021 - marel - 1
Meat+Poultry - January 2021 - marel - 2
Meat+Poultry - January 2021 - marel - 3
Meat+Poultry - January 2021 - marel - 4
Meat+Poultry - January 2021 - marel - 5
Meat+Poultry - January 2021 - marel - 6
Meat+Poultry - January 2021 - marel - 7
Meat+Poultry - January 2021 - marel - 8
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