Meatpacking plants nearly back at capacity, but COVID-19 fallout continues on farms

Meatpacking plants in Minnesota and elsewhere that were epicenters of COVID-19 outbreaks a month ago are getting back to normal, but the disruption caused by the virus is still being felt by farmers and consumers.

Closures and production slowdowns at slaughterhouses exposed a chokepoint in the nation's food supply. With output nearly back to pre-pandemic levels, farmers are contending with too many animals and ultralow prices for them. Shoppers, on the other hand, are facing meat prices that are substantially higher than before.

Pork prices nationwide were 18.5% higher the week ending May 31 than in the same week a year ago, according to market research firm Nielsen. Beef prices were 23% higher and chicken prices 11%.

President Donald Trump on April 28 ordered government agencies "to ensure that meat and poultry processors continue operations," leading processors to reopen plants though often with fewer workers and reduced output. At one point in early May, hog slaughter was running at less than 60% capacity in the U.S. because of virus-related closings.

"Last I saw we were at 88% capacity, which is much better than a month ago," Dave Preisler, director of the Minnesota Pork Producers Association, said this week. "We didn't add any more to the backup last week."

The JBS USA plant in Worthington, the largest pork processor in Minnesota, is now operating at 90% capacity after being closed for more than two weeks in April and May, when nearly half of its 2,000 workers contracted COVID-19. At least three plant employees have died of the disease.

The Smithfield Foods plant in Sioux Falls, S.D., which endured a large-scale outbreak about a week before the JBS plant, has made "substantial progress" toward normalized production, a spokesman said. He declined to be more specific.

The two plants together account for nearly 10% of the nation's pork-processing capacity and are key destinations for many of the hogs raised by farmers in Minnesota. The shutdowns have undercut hog farmers — first by eliminating demand for pork at restaurants and cafeterias and then by tearing through slaughterhouses.

With the supply of hogs outstripping demand because of the production disruption, the amount that farmers are paid for hogs remains well below the cost of raising them.

Lean hog is selling for about 48 cents per pound thanks to continued low demand from restaurants. Farmers need that to be above 60 cents per pound to break even, Preisler said.

The federal government's coronavirus programs will pay hog farmers $17 per pig they sold this year through the middle of April, and another payment for any inventory in late April and May. That helps, Preisler said, but it doesn't solve the crisis.

"It does not come close to getting people to break even," he said.

The nation's pork processors kill about 500,000 pigs a day. And when they didn't, barns in farms began to get backed up with animals that were supposed to have been taken away. As they continued to gain weight, they became too large for processors to handle. As a result, farmers had to resort to killing animals without turning them into food.

Preisler estimated close to 300,000 hogs have been euthanized in Minnesota. Sites were set up in Minnesota for farmers to dump dead hogs, where they are ground into compost.

At one of those, a pit near Round Lake close to Worthington, hog carcasses are fed into a wood-chipper and mixed with mulch for compost. Greg Suskovic, the veterinarian running the disposal program for the state's Board of Animal Health, said 8,720 hog carcasses have been disposed of near Round Lake. At a similar site in Le Sueur County, 9,558 hogs and 9,100 turkeys have been disposed.

Preisler said one bright spot in all this is the ingenuity of farmers in finding ways to give away their hogs. He didn't have an exact number, but said tens of thousands of Minnesota hogs have been saved from euthanization. Some were sold at sale barns, others to hunters who can butcher an animal. Smaller processing plants have also ramped up production.

"That's really a testament to the fact that farmers really did not want to put animals down, and they were inventive," Preisler said.

Adam Belz • 612-673-4405 Twitter: @adambelz