Name: Why The U.S. Almost Ran Out Of Meat
Uploaded: 2021-04-22T00:00:52.000Z
Duration: 11 min 3 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Should people expect shortages or price increases for certain meats in

the weeks ahead? Several beef factories have been forced to shut

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down. Nearly two dozen plants are functioning under capacity.

It's been a volatile and crushing few months for the meat industry.

In March, the shelter in place, orders and shutdowns caused a

Panicked consumers moved from spending more than half their food

expenditure outside the home to mostly eating at home.

On top of that, an entire market was cut off when restaurants and

By April, the coronavirus started wreaking havoc on workers and

processing plants. These are very different causes that created

different sorts of disruptions in the sector, both of them really

unprecedented in terms of any other events that we've ever seen.

Sick workers meant a broken supply chain.

Dozens of plants shut their doors and producers had to keep their

For the month of April, production of beef and pork dropped by 21

You can't just stop pigs from being born and continuing to grow.

And so when you have a group that gets stuck in the finisher and

can't move on to the packer, you then have the group behind them

Despite President Trump's use of the Defense Production Act, many meat

Live cattle and pork prices dropped by 25 to 40 percent, while

Near the end of April, meat prices at the grocery store had spiked 8

percent. We saw the largest daily increase and the largest daily

Recent studies estimate 2020 losses to be 13.6 billion dollars for the

beef industry and nearly 5 billion for hog farmers.

But the supply chains, fragility and the repercussions that have

followed could last for months, if not years.

It's no coincidence that a burger is the quintessential American

Americans consume more meat and poultry than any other country in the

The meat industry is as complex as it is diverse.

While the basics of the supply chain is pretty much the same across

the board, the nuances within each animal type or each phase are

manifold. Poultry, it's almost entirely a completely vertically

integrated industry, which means that the integrator think Tyson or

Sanderson Farm owns the chicken from the day it's born until it's

You have farmers who contract with those integrators to grow out the

But even the feed is provided by the integrator in about 40 percent

of hog producers operate on this kind of production contract.

There are still independent hog producers and how they sell those

hogs depends on their relationships with the packers.

Hogs are sort of in the middle of chicken and cattle or cattle is a

It takes a cow anywhere from 21 to 30 months from the time it's

conceived until it's ready for processing.

During that time, the animals can go through multiple owners, leaving

producers with small margins and little room for sudden shocks.

In 2019, the average price of live cattle was a dollar and 20 pounds,

while the average wholesale price was 2 dollars and 23 pounds.

That precise price gap has led to long standing conflict between

Ranchers and packers have always not liked each other, particularly

the ranchers, basically not trusting and assuming that the packers

There is very little research evidence that supports that.

While the live side of the supply chain involves thousands of small

and medium sized businesses, the packers and processors are dominated

J.B.S. Tyson Foods, Cargill and Smithfield Foods.

They control 50 to 83 percent of supply depending on the animal.

In 2019 the industry revenue was 230 billion dollars, nearly twice

It's a high cost capital business and also working capital as you're

And so it's a very difficult thing just to start and be successful.

And that's just partly led to this, you know, high degree of

concentration because of how critical it is for the economies of

scale. And consequently, that's why we've got fewer and larger

clients. The meat industry has experienced two crises during the

While dramatic the first was short lived.

Supply chains adjusted to restaurant and school closures and shifts

in consumer behavior within the first month.

More meat plants shutting down tonight as workers get sick

The second wave has exposed the meat processing plants vulnerability

To put in place guidance that these plants were taking to protect

their workers that haven't been done soon enough.

The CDC states that nearly 5000 workers have contracted the virus and

20 have died. But according to the Midwest Center for Investigative

Reporting, who used news reports, press releases, state data and

original reporting, the numbers are much more grim.

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Why The U.S. Almost Ran Out Of Meat

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