The company has been severely affected. Three of Tyson’s six main U.S. processing facilities remain closed, and three others are operating at reduced capacity, the company said.
Steve Meyer, an economist for Kerns and Associates, an agricultural risk management firm, said Tyson’s production numbers may be even more dire.
“By my calculations, last Friday, pork production was down 42.9 percent for all U.S. companies,” he said by phone Monday. “Tyson, by my calculations, was down by 57,780 hogs processed per day from a capacity of 78,500 processed per day. That’s 74 percent short.”
Tyson declined to give further details.
Tyson closed its Columbus Junction, Iowa, plant on April 6 after recording 200 coronavirus infections and at least two employee deaths. (The facility is open now and running at three-quarters capacity, Meyer said.) Next, the company suspended operations at its Perry, Iowa, pork plant on April 20 for deep cleaning. The company slowed and then closed its largest pork plant, in Waterloo, Iowa, on April 22 after 182 cases of covid-19, the disease the novel coronavirus causes, were linked to the facility. And a fourth pork plant, in Logansport, Ind., halted operations April 25 after nearly 900 employees, or 40 percent of the workforce, tested positive for the coronavirus.
Although pork processing was most affected, the Tyson beef supply is also threatened, with sick workers forcing shutdowns. The Tyson Fresh Meats beef plant in Pasco, Wash., closed, and Tyson said last week it would temporarily suspend operations at its Dakota City, Neb., beef processing plant after a surge of hundreds of coronavirus cases linked to the facility.
According to a Centers for Disease Control and Prevention report, 115 meat and poultry processing facilities in 19 states had reported covid-19 cases as of Friday. Among approximately 130,000 workers at these facilities, 4,913 cases and 20 deaths have been recorded.
Dermot Hayes, an economist at Iowa State University, said Tyson has been hit particularly hard for two reasons. It was hit first, so the spread has had longer to play out. And more recently, Tyson has been checking everyone at its plants and finding many workers testing positive for the virus.
“At one in Missouri, they tested 2,000 workers and 350 workers were positive,” Hayes said. “None of them had symptoms.”
Tyson announced last week that it plans to resume limited production this week at the Logansport facility, after a plant tour with local health and government officials, a union representative and medical professionals.
“We’ve taken additional precautions to reassure team members that they are returning to a safe work environment and have made additional changes to continue supporting them during this global health crisis,” said Todd Neff, senior vice president. “While the facility was idled, we added more workstation barriers, installed more hand sanitizer dispensers and did additional deep cleaning and sanitation. We’re also now screening employees for additional symptoms.”
But according to Meyer, if consumers’ neighborhood grocery stores have exclusive purchasing contracts with any of the multinational corporations that have been hit particularly hard, there could be shortages.
“You’re going to see empty shelves,” he said. “Not all the time, and it won’t last forever.”
Hayes said part of what will increase prices is that consumers will probably see a scarcity of pork, beef and chicken all at the same time because of the plant closures. Consumers can’t just substitute a cheaper animal protein, because all are likely to cost more.
“Usually pork loin is $2 per pound at Costco,” he said. “That could go to $3.”
Costco announced on Monday some restrictions as supply tightens, saying fresh meat purchases are temporarily limited to three items per warehouse member among the beef, pork and poultry products.
If prices increase significantly, Hayes said, it will tank exports.
“We export huge quantities of meat all over the world, about 30 percent of what we produce,” he explained. “Those export customers are much more price sensitive, so price increases will result in less exports.”
He said it remains to be seen whether that would boost quantities available for domestic retail.
The president invoked the Defense Production Act last week to classify meat processing plants as “critical infrastructure,” a move that was widely seen as giving processors protection from liability for workers who fall ill on the job.
“If it works,” said Hayes, “consumers will see a modest increase in prices. If it doesn’t work, they’ll see a big increase.”
The executive order came on the heels of Tyson Foods taking out full-page advertisements in The Washington Post, the New York Times and the Arkansas Democrat-Gazette, with company Chairman John Tyson warning that the U.S. “food supply chain is breaking.”