Beef processors are closing U.S. plants, warn of beef shortages and hoarding

"The American food supply is strong, resilient, and safe," Agriculture Secretary Sonny Perdue assured Americans on Wednesday, "and in fact our food supply chain has shown tremendous agility in shifting production and logistics so suddenly from restaurant and institutional settings to retail settings" during the COVID-19 pandemic. There may be empty shelves now, he said, but "in the United States, we have plenty of food for all of our citizens."

The new coronavirus is doing more than just creating logistical misalignment, though. Most meat is processed at giant facilities, creating a weak point in the production chain. One of the largest pork processing plants in the U.S., in South Dakota, shut down Sunday as the virus spread through its workforce, and the coronavirus-linked closure of two of the seven biggest U.S. beef processing facilities has reduced beef production by up to 25 percent, The Washington Post reports. Industry officials are warning of hoarding, especially of cheaper cuts of meat.

"The first problem is we don't have enough people to process the animals, and No. 2 is they can't do carcass balance because restaurants are down," says John Bormann at JBS, the U.S. subsidiary of the world's largest fresh beef and pork processor. "What's selling? Freaking hamburger." Restaurants usually buy the expensive cuts, like strips, sirloin, ribs.

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The misalignment is affecting all farmers. Dairy Farmers of America says its members are dumping out 3.7 million gallons of milk a day, and the farmers say they can't donate it to food banks because dairy processing plants are closing down due to lack of demand or to protect their workers.

At the same time, the conglomeration of agriculture means a small number of multinationals "have proprietary information about how much food is out there that no one else has," Ben Lilliston at the Institute for Agriculture and Trade Policy tells the Post. "In early March, there were a whole lot of stories about a surplus of meat. If they say it's a shortage, maybe it is, but no one really knows.