COVID-19 has affected the meat processing industry profoundly. The pandemic has caused serious workforce disruptions for the sector, which impacted plants’ ability to process meat efficiently and led to producers euthanizing excess animals.
Now, the Oklahoma Legislature is stepping in. Last week, the state Senate unanimously passed House Bill 2008, which would allow cattle producers to take their processed products directly to the market, allowing virtual inspections and other measures.
Russell Ray, editor of The Journal Record joined KGOU's Logan Layden to discuss.
Ray: According to one study by a professor at OSU, the cattle industry in Oklahoma lost about $600 million by early April… Nationwide, the loss was estimated at $13.6 billion… The primary cause is COVID-19… Thousands of workers in these processing plants have been infected, which has led to bottlenecks in the supply chain… So to help the industry, state lawmakers approved legislation allowing cattle producers to ship their processed products directly to market using virtual inspection and other measures designed to expedite the process.
Layden: Also, Gov. Kevin Stitt issued an executive order amendment to allow the Oklahoma Department of Agriculture to assist with livestock processing facility disruptions. The department will now be able to help with animal depopulation and disposal, and the agency has an incident command team prepared to deploy if needed.
Ray: Derrell Peel is an agricultural economics professor for OSU, and he told us the problem of having to euthanize animals has been a big one for pork producers and poultry producers… Peel said the nature of pork production doesn’t allow for much flexibility… When the animal needs to be processed, there’s not much to postpone that process… Cattle can be maintained for an extended time, but that’s an expensive option that creates economic issues for producers.
Layden: Even though cattle producers aren’t necessarily in the same position as pork or poultry producers, they’re still facing six-week backlogs. Peel said if the industry could proceed normally starting now -- with no second wave of the virus -- it would still take until August, or even the end of the year, to work through the excess. This is unprecedented for the sector. No one has really seen such wide-scale disruptions before.
Ray: That’s right… While meat processing has been affected in the past by individual events, like plant fires, the pandemic has impacted the industry in a way the industry has never seen… Peel said the industry has never seen a situation where multiple plants have been disrupted across multiple species… Cattle, pork and poultry… This has been unprecedented on many levels.
Layden: It’s suspected that the industry felt the brunt of the disruption a few weeks ago. And as producers start to get back on track and grocery demand decreases to normal levels, there’ll be less of a supply drop in grocery stores.
Ray: That’s right… This is not a supply issue… It’s a supply chain issue caused by a disruption in workflow and the ability to get these products processed safely and delivered to retail spaces in a timely fashion… This is the result of staffing shortages at these processing plants… If these animals aren’t processed on time, it forces the producer to reduce the population of their livestock.
Layden: Russell, thank you for taking the time to speak with me today.
Ray: My pleasure, Logan. Thank you.
Layden: Russell Ray is editor of The Journal Record. KGOU and The Journal Record collaborate each week on the Business Intelligence Report. You can follow us both on social media. We're on Facebook, Instagram and Twitter: @journalrecord and @KGOUnews. The story we discussed today is available on JournalRecord.com. And this conversation, along with previous episodes of the Business Intelligence Report, are available on our website, KGOU.org. For KGOU and the Business Intelligence Report, I'm Logan Layden.
The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.
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