Pork producer CEO says meat supplies in jeopardy

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Pork producer CEO says meat supplies in jeopardy

By Mike Troy - 04/13/2020

The CEO of one of the nation’s largest pork producers has issued an ominous warning about the nation’s meat supply after it closed a major production facility over the weekend.

Smithfield Foods, Inc., announced on Sunday that its Sioux Falls, SD facility will remain closed until further notice. The plant is one of the largest pork processing facilities in the U.S., representing four to five percent of U.S. pork production and employing 3,700 people, according to a Smithfield statement.

The closure is significant and Smithfield president and CEO Kenneth M. Sullivan used the strongest language to date of any executive associated with the food supply chain to describe the implications.

“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply,” Sullivan said. “It is impossible to keep our grocery stores stocked if our plants are not running.”

The past week has seen plant closure announcements from Cargill, Tyson and JBS USA which has caused suppliers and retailers to adjust supply chains.

Sullivan’s warning comes as many retailers are reporting improved in stock conditions follow a tremendous surge in demand in mid-March. The declaration of a national emergency on April 13 helped fuel spending at the nation’s food retailers who later in the month reported demand had tapered but remained elevated. Retailers have also noted that sales tend to ebb and flow with the reporting of positive and negative developments associated with COVID-19.

The situation with Smithfield and coverage of Sullivan’s inflammatory statements could be the type of event that triggers a new surge of buying activity. For example, Sullivan warned that closure of the company’s Sioux Falls plant and those operated by others will have severe, perhaps disastrous, repercussions for many in the supply chain, including livestock farmers who have nowhere to send their animals.

“Unfortunately, COVID-19 cases are now ubiquitous across our country. The virus is afflicting communities everywhere. The agriculture and food sectors have not been immune. Numerous plants across the country have COVID-19 positive employees,” Sullivan said. “We have continued to run our facilities for one reason: to sustain our nation’s food supply during this pandemic. We believe it is our obligation to help feed the country, now more than ever. We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19.”

Smithfield said it will resume operations in Sioux Falls once further direction is received from local, state and federal officials.

Smithfield was acquired by China’s WH Group in 2013 for $4.7 billion.

 

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