May 26 2020

Where’s the Beef?

I don’t often shop for Beef since I prefer Pork or Seafood and I don’t think a chunk of meat is a necessary part of a meal.

But I do notice things when I go to the Market and up until now the chief symptons of Coronavirus in the Meat Department is that prices have risen (though not as much as you might think) and there are spot shortages of certain items and purchase limits.

Your experience may be different, Stars Hollow is not exactly at the end of a precarious supply chain because New York City is right over there. If you can’t find it in the Heart of Acela it probably doesn’t exist.

Things could get worse though and very quickly.

‘Something isn’t right’: U.S. probes soaring beef prices

Supermarket customers are paying more for beef than they have in decades during the coronavirus pandemic. But at the same time, the companies that process the meat for sale are paying farmers and ranchers staggeringly low prices for cattle.

Now, the Agriculture Department and prosecutors are investigating whether the meatpacking industry is fixing or manipulating prices.

The Department of Justice is looking at the four largest U.S. meatpackers — Tyson Foods, JBS, National Beef and Cargill — which collectively control about 85 percent of the U.S. market for the slaughter and packaging of beef, according to a person with knowledge of the probe. The USDA is also investigating the beef price fluctuations, Agriculture Secretary Sonny Perdue has confirmed.

Ok, I’ll stop right there so I don’t step on the laugh. You and I both know there is exactly ZERO chance that any Corporation or individual is going to suffer a meaningful sanction even if found amazingly guilty.

To continue-

Meatpackers say beef prices have spiked during the pandemic because plants are running at lower capacity as workers fall ill, so less meat is making its way to shelves. The four companies didn’t respond to requests for comment about the probes.

But the coronavirus crisis is highlighting how the American system of getting meat to the table favors a handful of giant companies despite a century of government efforts to decentralize it. And it’s sparking new calls for changes in meatpacking.

“It’s evidence that something isn’t right in the industry,” said Sen. Chuck Grassley, an Iowa Republican who has spoken out against mergers in the agriculture industry. In April, Grassley requested federal investigations into market manipulation and unfair practices within the cattle industry. So have 19 other senators and 11 state attorneys general.

The average retail price for fresh beef in April was $6.22 per pound — 26 cents higher per pound than it was the month before, according to the Bureau of Labor Statistics. At the same time, at the end of April, the average price for a steer was below $100 per hundred pounds; the five-year average for that same week was about $135 per hundred pounds, according to USDA’s weekly summary.

Ed Greiman, general manager of Upper Iowa Beef who formerly headed the Iowa Cattlemen’s Association, attributed the consumer price increase to plants running at lower capacity. At the same time, farmers and ranchers desperate to offload their cattle as they reach optimal weight for slaughter are cutting prices so they won’t have to kill the animals without selling them.

“I’m running at half speed,” Greiman said at an event hosted by the Nebraska Cattlemen’s Association. “Cattle are backing up because we can’t run our plants fast enough. Nothing is functioning properly. We need to be careful not to put blame on any one thing or part of the industry because we can’t get these plants going.”

Exactly 100 years ago, after years of litigation, the five biggest U.S. meatpackers — which were responsible for 82 percent of the beef market — agreed to an antitrust settlement with the Justice Department that helped break their control over the industry.

The Justice Department’s efforts to reduce concentration in meatpacking led to decades of competition. By 1980, the top four firms controlled only 36 percent of cattle slaughters in the U.S., according to a report by the Government Accountability Office.

But during the next 10 years, meatpacking experienced a huge wave of deals, enough that the USDA dubbed the time “merger mania.” By 1988, the new four biggest companies again controlled 70 percent of the beef meatpacking market.

“There’s greater concentration in meatpacking now” than in 1921, said Thomas Horton, an antitrust professor at the University of South Dakota, who previously worked at the Justice Department. The first antitrust laws were “passed to take care of the Big Five. Now we have the Big Four. We’re going backwards.”

“You’ve got at most four bidders, but the reality is there are often fewer,” said Carstensen, noting that in some states, there are only one or two meatpackers with plants.

While the structure of the industry has remained stable since 2009, changes in how the meatpackers buy cattle have also had an impact. Before 2015, about half of all cattle was purchased via direct negotiation between a rancher and meatpacker, known as the negotiated cash market. Today, about 70 percent are purchased through contracts where farmers agree to deliver cattle once they reach a certain weight with the price to be determined later — usually a formula that takes into account how much cattle sell for in the cash market.

The increase in these contracts has some advantages for ranchers, because they know they have a buyer and don’t have to spend time on negotiations, said Ted Schroeder, an agricultural economist at Kansas State University. But fewer cash trades have made it harder to figure out the right price for cattle, he said.

Due to the coronavirus pandemic, more than 14,271 meatpacking workers have been sick as of May 15, according to the nonprofit Food and Environment Reporting Network. Worker illnesses and temporary plant closures have led plants to operate at about 50 percent capacity, said Schroeder.

Schroeder, who has focused on cattle prices for more than three decades, said the rising consumer prices and falling cattle prices are consistent with normal supply and demand.

“It’s economics 101. There’s less meat around, but demand is still pretty strong,” he said. “We’ve got plenty of cattle but can’t get it through the system. We are pretty close to what I would expect to happen to wholesale and farm prices given the bottleneck.”

Not everyone is persuaded. Last year, ranchers filed an antitrust suit against the four meatpackers for colluding to depress cattle prices. The suit, pending in Minneapolis federal court, alleges that Tyson, JBS, Cargill and National Beef began coordinating in 2015 to reduce the number of cattle slaughtered while also limiting how many they bought in the cash market. Ranchers with excess animals on their hands were forced to sell for less or enter into long-term contracts beneficial to meatpackers.

“The Big Four simultaneously withdrew from the cash market with intent to reduce prices across the board,” said Bill Bullard, CEO of Ranchers-Cattlemen Action Legal Fund, one of the lead plaintiffs in the suit, in an interview.

The companies were able to coordinate by communicating through trade associations, said Bullard. The lawsuit is based in part on information provided by a confidential witness who worked for one of the meatpackers for a decade. The conspiracy drove prices down at least 8 percent, said Bullard.

If the meatpackers were communicating about prices, that would clearly violate criminal antitrust laws, said Carstensen. But if a company observes what a rival does and matches that behavior — sometimes called “tacit collusion”— that may not violate the law, he said.

“Coordination is not the same thing as collusion,” said Carstensen.

The Justice Department could, however, try to make a case that the meatpackers have monopolized the beef market. They could argue that the companies have engaged in “an anticompetitive set of industry practices, which taken together, violate antitrust law and require a broader restructuring,” he said.

The anti-monopoly Open Markets Institute has outlined a similar theory and pushed for breaking up the Big Four so no company controls more than 10 percent of the market. Sen. Elizabeth Warren (D-Mass.) also advocated for breaking up meatpackers as part of her presidential campaign.

Grassley, meanwhile, said he’s not ready to call for the breakup of major meatpackers, but he has “a great deal of questions about whether they’re operating within the law.”

Some other angles-

The meat industry is trying to get back to normal. But workers are still getting sick — and shortages may get worse.
By Taylor Telford, Washington Post
May 25, 2020

Tyson Foods, the largest meat processor in the United States, has transformed its facilities across the country since legions of its workers started getting sick from the novel coronavirus. It has set up on-site medical clinics, screened employees for fevers at the beginning of their shifts, required the use of face coverings, installed plastic dividers between stations and taken a host of other steps to slow the spread.

Despite those efforts, the number of Tyson employees with the coronavirus has exploded from less than 1,600 a month ago to more than 7,000 today, according to a Washington Post analysis of news reports and public records.

What has happened at Tyson — and in the meat industry overall — shows how difficult it is to get the nation back to normal, even in essential fields such as food processing. Meat companies have spent hundreds of millions of dollars on measures such as protective gear, paid leave and ventilation systems since they were forced to shut dozens of plants that were among the top coronavirus hot spots outside urban areas.

But the industry has still experienced a surge in cases, and some companies say they are limited in just how much they can keep workers separated from one another. Only a portion of the labor force has gone back to work — some workers kept away on purpose — and the nation’s meat supply remains deeply strained as barbecue season gets underway.

A May report from CoBank, which specializes in serving rural America, warns that meat supplies in grocery stores could shrink as much as 35 percent, prices could spike 20 percent and the impact could become even “more acute later this year” as the knock-on effects on the U.S. agriculture supply chain are felt.

What’s clear is that the industry’s efforts so far, though they may have lessened the virus’s spread, have not come close to stopping it. Over the past month, the number of infections tied to three of the country’s biggest meat processors — Tyson Foods, Smithfield Foods and JBS — has gone from just over 3,000 to more than 11,000, according to the Post analysis.

Throughout the industry, worker deaths have tripled, surging from 17 to at least 63, according to the Midwest Center for Investigative Reporting, which is tracking outbreaks through local news reports.

Four of the plants that reopened saw outbreaks, with more than 700 positive cases, according to the center: Tyson Foods operations in Logansport, Ind., Perry, Iowa, and Waterloo, Iowa; and a Smithfield plant in Sioux Falls, S.D.

In Iowa, Nebraska and South Dakota, coronavirus cases linked to meat workers represent 18, 20 and 29 percent of the states’ total cases, respectively, according to the Environmental Working Group, a nonprofit advocacy organization.

Many plants that have reopened are operating at reduced capacity, either because of widespread absences or to reduce the number of workers on a shift to allow for social distancing. Closures have affected 45,000 workers, according to the United Food and Commercial Workers International Union, the largest organization representing meatpacking workers.

Tyson’s biggest pork plant, in Waterloo, reopened May 7 with new safety precautions and social distancing policies. “Our top priority is the health and safety of our team members, their loved ones and our communities,” Tom Hart, the plant’s manager, said in a news release.

Tyson had just finished running a national ad campaign warning, “The food supply chain is breaking.”

But the Waterloo plant reopened the same day that health officials in Black Hawk County, where it is located, reported that more than 1,000 employees out of 2,700 there had tested positive for the coronavirus.

“Tyson did not go above and beyond,” said state Rep. Ras Smith (D), who represents Waterloo. “They did what they already should have done.” He called Tyson’s handling of the outbreak “appalling.”

Smith and fellow state Rep. Timi Brown-Powers (D) said they suspect that President Trump’s executive order encouraged Tyson to reopen faster, a point the company disputes. The plant shuttered April 22 after weeks of resisting calls from local officials. The lawmakers said they met with the plant’s human resources director on May 1 and were told that the facility was weeks away from reopening.

Four days later, they said, they were told that production would resume May 7. They said there was no explanation for the new timeline.

“It really doesn’t feel like our local Tyson was in this big of a hurry to reopen,” Brown-Powers said. “It became a hurry for them because of the pressure they’re getting from above.”

“Now that Trump issued that executive order, it gives plants this insurmountable feeling that they are invincible,” said Kim Cordova, a local union president in Greeley, Colo., where a JBS beef plant was shuttered in April amid a coronavirus outbreak that has killed at least seven workers.

In practice, the order was more narrow, legal experts said. It designated meat producers as critical infrastructure and ordered them to follow federal guidance from the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration. It also enabled Agriculture Secretary Sonny Perdue to take steps to get meat companies federal contracts and access to protective gear.

OSHA — the federal agency in charge of worker safety — has not issued enforceable guidelines for protecting employees from the coronavirus, as it did during the H1N1 outbreak in 2009, instead opting for voluntary guidance. The agency has said it plans no enforcement action so as not to overly burden companies during the pandemic.

Smithfield cited the Trump executive order in federal court in Missouri, arguing that it meant local and state authorities no longer had authority over meat processors. It was part of the company’s defense in a lawsuit filed by an unnamed employee alleging that Smithfield failed to protect workers by not accommodating social distancing and by discouraging sick employees from staying home.

“The president has identified state interference with meat and poultry processors as ‘undermining critical infrastructure during the national emergency,’ ” Smithfield’s attorneys said in court documents. “State law, whether statutory or through private lawsuits, cannot be used to regulate the subject matter covered by the EO. This task belongs exclusively to the federal government.”

U.S. District Judge David Gregory Kays dismissed the case 12 days later, citing the “significant steps” Smithfield had taken to reduce the risk of coronavirus infection at its plant in Milan, Mo.

In a news release, the company praised the outcome of the case, which it said was “frivolous, full of specious allegations that were without factual or legal merit.”

Less than two weeks after the case was dismissed, voluntary testing at the Milan plant revealed an outbreak at the facility, according to local news reports and the worker behind the lawsuit. She told The Post that fearful employees have been staying home, and those who do show up for shifts are working overtime to keep up production.

On April 16, the JBS beef plant in Greeley was forced to shut down after roughly 100 workers contracted the virus and three died. Another worker died during the closure, and four others since the facility reopened April 24.

Coronavirus cases at the plant now exceed 300, Colorado Department of Public Health and Environment records show.

“We are raising hell because the numbers continue to rise,” said Cordova, the local union president. “People are scared to go to work because people keep getting sick. There are hundreds of workers who have not come back. We don’t know if they have moved on, if they are on ventilators. We can’t find them.”

Deny and pretend.

As Meatpacking Plants Reopen, Data About Worker Illness Remains Elusive
By Michael Corkery, David Yaffe-Bellany, and Derek Kravitz, The New York Times
May 25, 2020

The Smithfield Foods plant in Tar Heel, N.C., is one of the world’s largest pork processing facilities, employing about 4,500 people and slaughtering roughly 30,000 pigs a day at its peak.

And like more than 100 other meat plants across the United States, the facility has seen a substantial number of coronavirus cases. But the exact number of workers in Tar Heel who have tested positive is anyone’s guess.

Smithfield would not provide any data when asked about the number of illnesses at the plant. Neither would state or local health officials.

“There has been a stigma associated with the virus,” said Teresa Duncan, the director of the health department in Bladen County, where the plant is located. “So we’re trying to protect privacy.”

Along with nursing homes and prisons, meatpacking facilities have proven to be places where the virus spreads rapidly. But as dozens of plants that closed because of outbreaks begin reopening, meat companies’ reluctance to disclose detailed case counts makes it difficult to tell whether the contagion is contained or new cases are emerging even with new safety measures in place. The Centers for Disease Control and Prevention said there were nearly 5,000 meatpacking workers infected with the virus as of the end of last month. But the nonprofit group Food & Environment Reporting Network estimated last week that the number has climbed to more than 17,000. There have been 66 meatpacking deaths, the group said.

And the outbreaks may be even more extensive.

For weeks, local officials received conflicting signals from state leaders and meatpacking companies about how much information to release, according to internal emails from government health agencies obtained through public records requests by Columbia University’s Brown Institute for Media Innovation and provided to The New York Times. The mixed messages left many workers and their communities in the dark about the extent of the spread in parts of Iowa, Nebraska and Colorado.

The emails also reveal the deference some county officials have shown toward the giant meatpacking companies and how little power they have in pushing the companies to stem outbreaks.

There’s more like that but I commend your patience for reading this far.

This is a big deal and it’s not going to get fixed soon.