Francis Gardler/Lincoln Journal Star via AP
The Smithfield Foods plant in Crete, Nebraska, which will continue to operate on a reduced schedule. At least 14 major slaughterhouses have closed due to virus outbreaks.
At the tiny Platte Locker Plant slaughterhouse in Platte, South Dakota, the phone has been ringing off the hook.
The day after the giant Smithfield plant in Sioux Falls shut down after the coronavirus had infected scores of its workers, farmers and feedlots with a supply of cheap hogs and nowhere to butcher them turned to Platte Locker, a local independent meat processor which before the crisis had been butchering just a few cows and hogs a week.
“We could have easily had 30 hogs in here this morning to butcher,” says Karen Warejcka, who co-owns Platte Locker with her sons, Wade and Ryan, and her husband Rollie. The problem at the moment isn’t a lack of animals to butcher or customers to buy the meat, she says, it’s that they don’t have enough help to keep up with demand.
A few hundred miles to the south, in McPherson, Kansas, Krehbiels Specialty Meats has seen a similar bump in business. With big-box-store meat coolers depleted and giant slaughterhouses shuttered as the pandemic sweeps through their workforces, shoppers and farmers alike have turned to small-scale slaughterhouses throughout the country in hopes of finding a way to keep meat on the table and money coming in.
“You go to a box store and you can’t get meat,” says Zach Krehbiel, who runs production at the plant. “That’s when everyone remembers these local guys that have freezers full of it.”
President Trump’s executive order to reopen the 14 or more meatpacking mega-plants shuttered after the coronavirus raced through their workforces displayed his characteristic indifference to low-paid workers who, in the best of times, perform the highly dangerous tasks of turning whole animals into bacon and burgers.
It may not remedy the nation’s sudden shortage of meat, either.
The network of smaller, mainly rural slaughterhouses won’t be able to offset the disruptions in meat availability Americans can expect in the coming weeks.
Stricken with the wildfire spread of COVID-19 among their employees, meat processing plants around the country began closing weeks ago. The supply of pork in America is down by about a third. Smithfield Foods, the country’s top pork producer and processor, has shuttered at least five facilities so far, including its massive plant in South Dakota that produces around 4 percent of the nation’s pork.
Overall, at least 14 major slaughterhouses have closed due to COVID-19 outbreaks, according to Farm Journal, which is tracking closures. “The food supply chain is breaking,” John Tyson, head of Tyson Foods, said last week. Shoppers will notice empty meat coolers in stores, while farmers and ranchers unable to sell their livestock will waste hundreds of thousands of animals. There’s already planning for mass graves.
Small-scale slaughterhouse owners and industry observers say that most local plants and lockers throughout the South and Midwest are seeing coronavirus-related leaps in demand, stretching their capacity and workforces to their limits. For the most part, it’s a welcome change for businesses that for years have operated in an industry in which regulation and policy are consistently tilted to favor larger, more powerful meatpackers.
But the network of smaller, mainly rural slaughterhouses won’t be able to offset the disruptions in meat availability Americans can expect in the coming weeks. The concentration of the industry is too pervasive for smaller plants to fill the current void, as well as posing a deadly threat to the thousands of workers packed inside the giant plants. Decades of unchecked consolidation and captured regulation have created an industry in which any breakdown on the road from farm to market can threaten our ability to feed ourselves. “The whole system has proven to be a total failure,” says Mike Callicrate, a Kansas rancher and critic of agriculture consolidation.
The giant meatpacking plants have become hubs for COVID-19 infection because of their incredible size. Many shuttered plants were slaughtering and processing 10,000 animals a day or more along old-school disassembly lines where employees work shoulder to shoulder removing flesh from bone. While Trump’s executive order will keep some plants open, outbreaks of the virus have been so extensive in some slaughterhouses that they still lack sufficient workers to run the lines.
Slaughterhouses didn’t always look this way. Just 40 years ago, most Americans got their meat from a far more diverse and local collection of businesses. Small ranchers would raise livestock and sell it to local feedlots to fatten, which would then move those animals to regional slaughterhouses to break them down into meat destined for wholesale or retail distribution.
Today’s massive, consolidated slaughterhouses arose from the crumbling remains of a regulatory and economic superstructure that, for generations, had ensured that meatpacking jobs weren’t as dangerous as they are now, and, if unionized, paid decent wages. Those regulations also kept the industry competitive.
The regulatory system intended to police the industry and protect the food supply has instead worked to keep small-scale slaughterhouses from feeding the public.
In the 1970s, the top four pork processing companies accounted for around a third of the industry. Today, the four largest companies control 70 percent or more of all pork processing. As consolidation rose, those slaughterhouses became magnets for farmers and feedlots looking to sell their animals, and one-stop shops for box stores and supermarket chains. Thousands of smaller pork slaughterhouses closed down, particularly in places where the largest processors had taken root and grown into monopolies.
Smithfield capitalized on the government’s growing indifference to market concentration to become the country’s largest pork processor. Since 1981, when it merged with its main processing rival, Gwaltney, Smithfield has bought out dozens of smaller slaughterhouses and pork farms with little to no interference from antitrust watchdogs. It became the country’s largest pork producer through eye-watering vertical mergers that observers questioned, to no avail.
When Smithfield made a bid in 1999 for Murphy Family Farms, at the time the nation’s largest pork farm, the Department of Agriculture called Smithfield “absurdly big” and asked antitrust officials at the Department of Justice to step in. None did. In the three years between 1997 and 2000, Smithfield jumped from the country’s seventh-largest pork producer to its largest.
Seven years later, when the Justice Department waved through Smithfield’s purchase of the second-largest U.S. pork producer, Premium Standard Farms, Iowa Sen. Chuck Grassley lamented that “it looks like nobody’s going to stand in the way of all this vertical integration until we’ve got just one meatpacker in the country. Maybe then the Justice Department will figure out we’ve got a problem.”
As COVID-19 has ripped through the meatpacking industry, the problem Grassley identified has been on clear display. Since mid-March, panic buying and supply disruptions have sent the price of meat soaring for wholesalers and consumers. Beef sales were up more than 75 percent over last year, and the average consumer price for a pound of ground beef in mid-April was more than a dollar higher than it had been just one week before. Meanwhile, ranchers say the prices slaughterhouses will pay for cattle have fallen 35 percent or more since the start of the pandemic. That means meatpackers make around $550 in profits on a head of cattle, while average profits for ranchers are around $25.
“It is so, so frustrating to see what these packers are making off the producers,” says Warejcka, who works closely with local ranchers and farmers. “They are busting their butts every day, and they just have to get what the processors will give them.”
The situation would be different, ranchers and advocates say, if beef and pork producers had any means of challenging the meatpacking monopolies. The 1920s-era federal law that governs the operation of the agriculture industry created a stand-alone agency called the Grain Inspection, Packers and Stockyards Administration, with the power to address monopoly power in meatpacking and protect smaller farmers from abusive and predatory practices. The power of that agency wavered over the years, and in 2017, Sonny Perdue, Trump’s agriculture secretary, did away with the agency altogether. Instead, Perdue buried its functions inside the Agricultural Marketing Service, which promotes the American agriculture industry. The Organization for Competitive Markets called it “the death knell for antitrust enforcement in the meatpacking industry.”
Ranchers and farmers also say they could get a better deal if they could sell livestock to processors other than Smithfield, JBS, Tyson Foods, and other corporate giants. But by and large they don’t, in part because the regulatory system intended to police the industry and protect the food supply has instead worked to keep small-scale slaughterhouses from feeding the public.
Under current rules, smaller slaughterhouses often struggle to meet the arduous and often expensive requirements for federal inspection; without it, or a similarly rigorous state inspection, they aren’t allowed to sell meat to the public. Instead, hundreds of smaller “custom” processors around the country can only slaughter and process an animal for the sole use of its owner or other private means. The USDA says this rule is intended to keep tainted meat or unhealthy animals out of the food supply, and that it has been successful. But small-scale processors say the rules and fees make it exceedingly difficult to get an inspection.
Last fall, the Trump administration approved rules that enabled pork processing plants to conduct their own meat health and safety inspections.
The irony is that much of the USDA inspection regime is at this point perfunctory. Last fall, the Trump administration approved rules that allowed for increased production times and enabled pork processing plants to conduct their own meat health and safety inspections. Now, it’s factory workers in the country’s largest pork slaughterhouses who are primarily responsible for the shift-to-shift inspection that federal officials would typically conduct before administration officials altered the rules.
The loosened rules have cut the number of licensed inspectors at mega-plants by 40 percent and removed limits on speeds. The unchecked speeds of processing pigs have created hazards for the public and workers. Employees at a Smithfield plant in Missouri sued the company last week for creating conditions for COVID-19 to spread, with the speed of production lines so intense the workers can’t reach up to cover their coughs or clean their faces after they sneeze.
The disparity frustrates smaller slaughterhouses. After decades of widespread consolidation, the giant corporate slaughterhouses are now being given the freedom to operate with lax federal oversight and few penalties despite workplace and public dangers. Meanwhile, local locker plants and butchers that want to sell to the public struggle to get the federal inspection they need to do so.
Two years ago, Thomas Massie, a Republican congressman from Kentucky, and Maine Democrat Chellie Pingree—both of whom raise cattle themselves—introduced the Processing Revival and Intrastate Meat Exemption Act, which would create competition and diversify the meatpacking industry by allowing small slaughterhouses under state supervision to buy and butcher livestock to sell commercially in-state, either directly to the public or to restaurants and supermarkets. Supporters have been pushing the House Agriculture Committee to take up the now-reintroduced bill, using the coronavirus-related shutdowns of large processing plants to demonstrate the fragility of a monopolized meat industry.
Critics believe more structural solutions are needed. Callicrate, the Kansas rancher who is also a board member of the Organization for Competitive Markets, says corporate consolidation throughout the country’s food system hurts farmers and consumers. Back in 2010 when the Obama administration held hearings to examine the rise of monopoly power in agriculture, something could have been done to address the problems. But antitrust enforcers did nothing, and since then a series of unchecked megamergers—Bayer and Monsanto, JBS and Cargill, and others—have created even more monopoly power in the industry.
The real solution, Callicrate says, is to use the country’s antitrust laws to disassemble concentrated power in every corner of the industry. “We’ve got to break them up,” he says, both of the meatpacking titans and the equally powerful box stores and supermarkets. Policymakers must reduce processing line speeds that have made meatpacking work life-threatening, and dedicate public resources to rebuilding a diverse and resilient food system. “It’s going to be painful,” he says, “But we have to do it.”
The scope and severity of the COVID-related disruptions have created at least some push for deconcentration. Two senators, Republican Josh Hawley from Missouri and Wisconsin Democrat Tammy Baldwin, last week asked the Federal Trade Commission to investigate concentration and anti-competitive practices in the meatpacking industry. Were the FTC to find wrongdoing, the feds could try to break up Smithfield and the other vertically integrated processors. Any such result, however, would be years away.
Until then, small-scale slaughterhouses will keep working longer hours and adding shifts to keep up with this sudden and welcome demand. They’re skeptical it will last. Once the virus is held at bay, people will go back to the box stores. The giant processing plants will whir back to life and the country’s meat industry—concentrated, exploitative, and fragile—will be restored. “Take while the getting’s good,” Warejcka says. “We don’t think it’s going to last for us.”
