Cold Hard (Storage) Facts About Meatpacker Threats of Scarcity

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By Dr. Steve Suppan, Institute for Agriculture & Trade Policy

“It is impossible to keep our grocery stores stocked if our plants are not running,” said Smithfield Chief Executive Officer, Kenneth Sullivan when he announced the closing of its Sioux Falls, South Dakota slaughterhouse due to a COVID-19 outbreak among more than 200 Smithfield workers. Sullivan, like his peers at Tyson Foods, JBS USA and other meatpackers, denied that their companies had failed to protect their workers (and therefore, their families and communities) against the pandemic. Sullivan’s statement was at best a half truth because grocery stores are stocked from the company’s massive cold storage facilities.

Strategic use of cold storage supplies could buy the meatpackers time to supply Personal Protective Equipment (PPE) for all their workers and slow down their production speeds to allow for worker and federal inspector social distancing, if the meatpackers and the U.S. Department of Agriculture (USDA) used that time wisely. For example, according to the National Agricultural Statistics Service (NASS) Cold Storage report, meatpackers held 650 million pounds of frozen pork in February 2020, compared to less than 500 million pounds in December 2017. By March 31, NASS reported 622 million pounds of frozen pork products.

If the NASS Cold Storage frozen pork depletion rate were linear (which it isn’t because of non-monthly export consignments, holiday meat buying and panic buying instigated by such statements as Sullivan and John Tyson’s), at 28 million pounds a month, grocery stores could be supplied at current rates for up to 18 months, if all production stopped for 18 months. Which it won’t and doesn’t have to.

A conservative depletion rate of 45 million pounds a month, to take into account non-linearity, would still provide almost a 14 months’ supply of pork from the March 31 NASS baseline. In the meantime, slower production speeds to accommodate COVID-19 required social distancing for meat processing workers could resupply private and public cold storage warehouses to meet both domestic and export pork needs. Similar rates of depletion could be calculated for cold storage frozen beef and poultry products.

Instead, according to a comprehensive March 28 ProPublica report, most meatpackers were running production lines as fast as they could, some requiring “team members” to work even if they exhibited symptoms of COVID-19. The Washington Post reviewed an April 4 letter by Weld County (Colorado) public health officials, according to which 64% of JBS workers who tested COVID positive in a Greeley Colorado plant “worked while symptomatic and therefore contagious to others.” The plants were kept running with sick employees. During the pandemic, USDA issued 15 waivers to allow poultry processing plants to increase their productions speeds.

As ProPublica showed in 2019, USDA worked with the meatpackers to speed up production in what was among the most hazardous jobs for worker health prior to the pandemic. Massive and rapid pork production boosted the profits of the China based WH Group by 32% in 2019, largely on the basis of cheap pork exports from the WH Group’s subsidiary Smithfield U.S.A. to China.

And as ProPublica showed in a 2017 report, meatpacking is highly dependent on immigrants and refugees for its work force. That workforce is especially unlikely to report meatpacking plant safety violations, injuries and illness, out of fear of loss of employment and/or deportation.

More than six weeks after the first reported cases of worker COVID-19 infections, on April 26, the Department of Labor’s Occupational Health and Safety Administration (OSHA) and the Centers for Disease Control and Prevention (CDC) issued voluntary guidance to meat and poultry processing plants on how to protect their workers from COVID-19. The guidance helps meatpackers because they have no compliance obligations, although employers are expected, though not required, to report cases of COVID-19 among their workers.

According to the National Employment Law Project (NELP), the Trump administration has gutted OSHA staff leaving them unable to carry out their legal obligations. IATP has signed on to a NELP letter calling on Congress to pass the COVID-19 Protect Every Worker Act of 2020. OSHA would be required to immediately issue an Emergency Temporary Standard to mandate that employers provide employees with specific protections for the duration of the pandemic or suffer penalties for failing to do so.

However, the Trump administration continues to try to protect employers, rather than employees, from the pandemic’s impacts. On April 26, Tyson took out full-page ads in The New York Times and The Washington Post claiming that the “meat supply chain is broken” because some of its plants had been closed due to COVID-19 infected employees. On April 28, President Donald Trump signed an executive order to compel meatpacking plants to “continue operating to the maximum extent possible,” despite the COVID-19 infection among their workers and communities. He declared meatpacking and poultry processing plants to be essential national infrastructure under the Defense Production Act (DPA). Trump claimed he would use the DPA before, but then failed to do so to compel the production of PPE for essential workers, including hospital and nursing home workers battling the pandemic. Like many Trump Executive Orders, this one is a legal mess that is confusing even to the industry that requested it.

The United Food and Commercial Workers International Union (UFCW) rebuked the Executive Order. The UFCW, the largest union representing meatpacking and poultry processing employees, wrote on April 23 to Vice President Mike Pence, head of the presidential COVID-19 task force, recommending five actions to protect both union and non-union meatpacking and food processing employees, including mandatory protections for workers and halting USDA granted line speed waivers. The UCFW estimated that 5,000 meatpacking employees and 1,500 food processing workers had become ill from COVID-19 and confirmed that 20 meatpacking employees had died from the coronavirus.

Instead of mandating worker protections against the pandemic, the White House is considering how to preemptively protect employersagainst lawsuits from COVID-19 infected employees. Indeed, Senate Majority Leader Mitch McConnell has said he would oppose COVID-19 related aid to states and cities, unless the aid bill included a liability shield for employers.

Forcing the meatpacking industry to work, despite the near certain increase in COVID-19 among its workers, their families and communities, will likely be supported by many livestock and poultry producers and livestock feed grain producers in states that President Trump must win in the November 3 election. For example, the National Pork Producers Council (NPPC) supports President Trump’s Executive Order to require meat and poultry production under the Defense Production Act. The likelihood of that electoral support will be aided by $19 billion in taxpayer funds funneled to livestock, feed grains and other producers in the CARES bill signed by President Trump on March 27.

On April 14, the NPPC stated that it had asked the USDA to purchase $1 billion in pork products to “clear out a backed up meat supply” in cold storage. The purchase would be used to provision private food pantries overwhelmed with demand by unemployed workers. The NPPC wants no eligibility limits on how much the largest scale producers can receive from taxpayers. On April 17, the NPPC announced that USDA said hog farmers would receive $3 billion from CARES with a payment limit of $250,000 per entity. While grateful for the taxpayer compensation, NPPC said that it would be insufficient to cover the $5 billion it estimated in hog farmer losses by the end of 2020.

There is an alternative to business as usual in meatpacking and poultry processing that can contribute to flattening their infection curve before the anticipated second wave of the pandemic in the fall. But the alternative requires sacrifice by all segments of the meat supply chain, other than the lowest paid and least protected workers and their families who have already suffered COVID-19 infections and their devastating consequences.

The meatpackers and poultry processors must agree publicly and jointly that this National Emergency requires them to:

1) use their immense cold storage supplies to provide products to grocery stores and food pantries, and to restaurants, when they can open safely; use the time that cold storage provides to comprehensively clean all their facilities and redesign slower production lines to protect their workers and flatten their own infection curve, while replenishing their cold storage warehouses;

2) jointly and publicly announce their support for making the April 26 CDC/OSHA guidelines on worker protection mandatory and pay to implement them; jointly and publicly announce their support for the COVID-19 Protect Every Worker Act of 2020;

3) announce that they will pay for sick leave of all COVID-19-infected workers and for COVID-19 testing of their employees and their families; commit to providing a COVID-19 vaccine to all their employees and their families as soon as a successful vaccine is developed;

4) inform their shareholders that senior managers will be taking pay cuts and forgoing other compensation during the National Emergency; inform their shareholders that there will be no dividends paid nor share buybacks for at least 18 months, as the meatpackers and poultry processors focus on ensuring the industry’s survival during the National Emergency;

5) commit jointly and publicly that they, and not taxpayers, will indemnify farmers and ranchers contracted to produce livestock and poultry for them for the fair value of livestock and poultry euthanized due to COVID-19 closed plants and plants running at reduced production speeds during the pandemic. (USDA will indemnify farmers and ranchers not contracted with the processors for COVID-19 related livestock and poultry losses, following the necessary changes to USDA indemnification rules.)

Congress is being pressed from all sides to approve private sector liability shields from COVID-19 related lawsuits. It should refuse to do so without clear and enforceable measures in each sector, such as the commitments outlined above, to protect public health and the public interest. Companies that aren’t protecting their workers must not be protected from lawsuits based on violations of U.S. law and their workers’ rights. Otherwise Congress will be writing corporate America a blank check and without requiring, in the case of the meatpackers and poultry processors, any changes in how they treat their workers or produce the nation’s food.

Originally posted here.

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