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Smithfield CEO: “We Are Either Going To Produce Food or Not”

After 200 employees reportedly had come down with COVID-19, Smithfield Foods Inc. will shutter its major Sioux Falls, South Dakota, pork-processing facility, where four to five percent of U.S. production takes place. 

“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply,” Smithfield’s Chief Executive Officer Ken Sullivan said in the statement. “It is impossible to keep our grocery stores stocked if our plants are not running.”

The shuttered meat plants join trucking bottlenecks and jammed port traffic to contribute to supply chain concerns. Smithfield is owned by Hong Kong-listed WH Group. The South Dakota facility employs 3,700 employees, who will receive pay for at least two weeks. The plant will reopen when local, state, and federal authorities issue further directions. 

“Unfortunately, COVID-19 cases are now ubiquitous across our country. The virus is afflicting communities everywhere. The agriculture and food sectors have not been immune,” Sullivan said. “We have continued to run our facilities for one reason: to sustain our nation’s food supply during this pandemic.”

Sullivan added: “We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19.” 

The coronavirus pandemic is indeed limiting meat supplies in supermarkets. Thousands of meat-plant workers are under stay-at-home orders across the U.S., reducing meat consumption. Meat suppliers are reducing the range of cuts they sell to supermarkets. 

B&R Stores Inc., a midwestern grocery chain, saw meat sales jump 30% over the past month. Suppliers are filling only 75% of meat orders, according to President Mark Griffin. B&R is limiting customer’s to one 10-pound roll of ground beef, while offering fewer varieties of leanness. 

“We are very concerned about fresh meat,” Mr. Griffin said. “We have fresh meat today, but there are indicators that it will be a problem in the future.”

Meat processors Smithfield, Tyson Foods Inc., JBS USA Holdings Inc. and Cargill Inc. are providing bonus pay to workers, and trying to adhere to social distancing guidelines during shifts. Meat-industry officials fear the problem could worsen. 

Despite the concerns, U.S. meat supplies are high due to closed restaurants. Cold-storage facilities held 925 million pounds of frozen chicken on February 29, a record for the month, reports the U.S. Department of Agriculture. Red meat in cold storage was up 5% from February 2019 and 3% from January. 

The number of cattle slaughtered the week ending April 11 fell 14% from the previous week’s total, according to the USDA. The number of hogs slaughtered declined 6%. The number of chickens processed declined by 25%. 

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