Indiana meat plant closures cost nation nearly one-tenth of pork processing capacity
INDIANAPOLIS (WISH) — Two Indiana meat plants temporarily closed over coronavirus concerns account for approximately 9% of the nation’s pork processing capacity, experts said.
Company officials were unable to confirm reopening dates for the Tyson Fresh Meats plant in Logansport or the Indiana Packers facility in Delphi.
Operations at both were suspended after employees tested positive for COVID-19, resulting in further supply chain disruptions in an already unstable market.
“Fifteen of the largest pork packing plants process 60% of all hogs in this country,” said Jayson Lusk, distinguished professor and head of the agricultural economics department at Purdue University. “So if you lose one, it could have a really big impact on the market. With COVID-19, it’s not just one; we’ve seen several of these plants go down.”
He warned consumers to prepare for slight increases in meat prices and decreased product selection with more than a fifth of the nation’s pork processing capacity offline.
A “massive chain reaction” of industry disruptions began when sickened slaughterhouse employees were unable to work, Lusk said.
Plant operators ordered temporary shutdowns to clean facilities and protect workers, leaving some farmers with nowhere to send livestock ready for slaughter. Fewer processing options resulted in decreased beef, pork and poultry supply, forcing grocery stores to compete for product, which drove prices up.
“Meat markets have been insane,” Lusk Tweeted Thursday, noting unprecedented volatility in wholesale beef and pork prices.
The week ending March 20 saw the largest weekly increase in wholesale pork prices in at least a decade, according to data from the U.S. Department of Agriculture (USDA) compiled by the Livestock Marketing Information Center.
Two weeks later, wholesale pork prices experienced the largest weekly decline in at least 20 years after “panic buying” began to ease, Lusk said.
However, the USDA projected only slight increases in consumer meat prices. The agency expects beef, poultry and pork prices to climb between 1% and 3% this year.
Grocery stores often “cushion” price swings, according to experts, preventing the full impact of wholesale volatility from rocking consumers.
“There’s no doubt about it; this is an extraordinarily difficult time for the meat processing industries,” Lusk said. “The real pain is being felt by a lot of livestock producers who, at the moment, don’t have anywhere to go with their animals. The processing plants aren’t buying because they’re not operating because their workers are sick.”