Why 1 Million Pigs A Week Could Have Been Euthanized Even During A Meat Shortage | Big Business

when coronavirus outbreaks shut down meat processing plants across the u.s. animals headed here were suddenly stranded here as time has gone on and plants haven't been able to operate that's created a big backlog of pigs with no where to send their pigs some farmers were forced to euthanize their herds you're literally talking about millions and millions of pigs that were intended to go to market but are still remaining on the farm the back-up at farms led to record-breaking meat prices and cleared out shelves the US was in the midst of a meat shortage you start with the ethics of it like animals live and die to make your product and then get to the concentration of it it's a pretty hairy beast but why did this all happen and how can we avoid it from happening in the future America is the world's leading producer of beef and poultry it's also one of the top producers of pork in the world in the US alone an estimated nine billion animals are slaughtered a year in order to process all that meat the industry is efficient and concentrated simply put as many animals as possible flew from the farm to the slaughterhouse as quickly as possible when the system works US meat prices are among the most affordable on the planet but that efficiency becomes a problem in the face of Cova 19 for 1 workers operate in tight quarters there in refrigerated environments with recirculating air this was an environment in which kovat could apparently be spread easily from worker to worker an estimated 25,000 meatpacking workers have contracted koba 19 and outbreaks in 167 plants forced 38 in South Dakota Minnesota and Iowa to close since only a small number of plants handle most of the industry's meats when any one of them closes it has an impact on the entire industry it's like the only stores shut down in town and you can't get milk ok if you're a farmer by early May beef and pork plants were running at about 40% below the processing volumes we saw just a year ago so that's an enormous reduction in processing volumes and caused all kinds of disruptions this has hit farmers like Mike hard when kovetz started really impacting the plants and our percentage of utilization of the plants just kind of kept going down and down and down that's created a real backlog of pigs every year Mike and his co-op send about a hundred and fifty thousand hogs to the Smithfield plant in Sioux Falls South Dakota but when Koba 19 closed that plant they had nowhere to send their animals we got our letter April 11th that the Smithfield plant was going to be closed turned out to be four weeks that they didn't receive any hogs in Sioux Falls remember the meat industry is streamlined to be exact we're looking for a very uniform end product last time for 284 these might be I think they're gonna be pretty close to that all the pigs Mike or any farmer sends to a plant have to weigh about 280 pounds if it gets above 300 330 pounds the plants are just not configured to take animals of that size Mike tried to put them on a diet right now it's just basically grown corn there's some vitamins and minerals and salt in there now usually we would have soybean meal dried distillers greens from the ethanol process in there as well but those feeds are more expensive and we were trying to slow their growth this diet should slow him down to about one pound a day and we're usually they're gaining to two and a half pound today at this stage but even on a diet they were growing beyond the 280 pound mark by the day it was a no-win scenario they had shipments of baby pigs still coming in from nursing farms they were running out of space and feed the current pigs were getting too fat and factories were so closed last case situation is unfortunately where farmers have to consider euthanizing some animals combined Mike's cooperative has had to euthanize over 3,400 pigs about a half-million dollars worth the Mike estimates if you add in the feed costs the loss varies coop is upwards of 1.5 million dollars I don't know that's even possible to compare the economic losses to sort of the psychological you know impact that this has on producers neither one are positive it's really kind of a double whammy I think the situation Mike's co-op based was happening all over the country so one way to think about it is like this in this country we have a processing capacity of about 500,000 pigs per day remember the industry was running at about 40% below capacity if you do the math every day that's an extra 200 thousand pigs that were meant to go to market but instead stayed on the farm so you'd do that for five days which happened that's a million for pigs that we're gonna go to market after a couple of weeks that's millions of pigs at risk of being euthanized all of this is why consumers have seen higher meat prices and those empty shelves which Jason estimates may stretch out for at least another six months since mid-may things have started getting better factories like Smithfield Sioux Falls have reopened with limited production and social distancing measures euthanization of animals has slowed and as a result production and meat prices have started to stabilize but what can we do so this doesn't happen again one option is to rely more on smaller vertically integrated farms when you see a piece of meat in the grocery store it's typically been touched by 15 or 20 different types of companies and all of those companies are hyper specialized and they operate at a really efficient scale that's Anja she owns Belle campo farms a vertically integrated Meat Company out in Northern California our supply chain relies entirely on our own infrastructure we own our own farms or own slaughterhouse and several direct-to-consumer businesses they'll Campos home to 3,000 grass-fed organic cattle they have 30,000 acres to roam and live seven to ten times longer than conventional cattle the slaughtering process is also slowed down with only 50 to 60 animals processed a day in a slaughterhouse that Belle Campos just 20 minutes from the farm I think of it as like intentional inefficiency and because while Campo exists outside of the normal meat industry we're not reliant on the broader army infrastructure since we have our own slaughterhouse that we've had extremely aggressive and proactive safety measures in we have not had any issues this also made it easier for on you to start social distancing measures in the plant before the CDC required it we implemented mandatory temp check and a questionnaire every day as of like March 18th directed consumer models could be another shake-up in the industry cutting out distribution centers Anya's e-commerce site saw unprecedented traffic and her app delivering meat to homes in San Francisco in LA went from like 3,000 to 20,000 users in the past month as for the bigger meat companies at the heart of this issue Jason has a few ideas more medium size plants for starters so if one goes down it doesn't take the whole supply chain with it even if you're one of the large processors you may think about giving up some of that economies of scale to maybe reduce some risks but Jason says the most effective change would be automation robots don't get sick it's just hard we're not putting together car parts that are uniform and shape and size animals are different sizes shapes weights whether or not the meat industry will make any of these changes comes down to what the consumers demand and how much they're willing to pay for any real changes it's been a choice we've making with our wallets for years where we love cheap protein our customers gonna pay up for a secure supply chain and I think that the more we talk about the market people are gonna raise their hands and say I'm opting out hey guys my name's Abby and I'm the producer on this video one thing that came up in our reporting was whether or not this meat shortage would lead to more non meat purchases like if you're at the grocery store and you go in to get chicken but there isn't any do you then turn to pick up soy nuggets let me know what you think in the comments below and make sure subscribe button so you don't miss the next episode of big business

Channel: Business Insider

Views: 498,687

Keywords: Business Insider, Business News, pigs, meat, farms, covid 19, animals, meat processing plant, meat shortage, usa, minnesota, california

Id: sZqgy1QGfGs

Length: 7min 39sec (459 seconds)

Published: Fri Jun 19 2020