• Market Crumbs

Meat Processors Pressured

Image via Sean McGee on Unsplash

Meat. It's a staple for most people's diets. Despite the prevalence of plant-based alternatives that have come to market over the last few years, only 5% of American adults consider themselves to be a vegetarian.

With COVID-19 spreading across the U.S., employees at major meat processors are increasingly contracting the virus. As a result, a handful of major meat processors have had to shut down plants, threatening the nation's meat supply.

Smithfield Foods, the largest pork producer in the world, is closing its Sioux Falls, South Dakota plant indefinitely after 238 employees tested positive for COVID-19. The plant, which is one of the largest pork processing facilities in the U.S., accounts for 4% to 5% of U.S. pork production.

"It is impossible to keep our grocery stores stocked if our plants are not running," Smithfield CEO Ken Sullivan said. "These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers."

Smithfield said it will reopen the plant at the direction of local, state and federal officials. While warning that the nation is "perilously close to the edge" in supplies for grocery stores, Sullivan said "We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19."

Tyson Foods also suspended operations at its pork processing plant in Columbus Junction, Iowa after more than two dozen employees tested positive for COVID-19.

"In an effort to minimize the impact on our overall production, we’re diverting the livestock supply originally scheduled for delivery to Columbus Junction to some of our other pork plants in the region," Tyson Foods CEO Noel White said.

JBS USA and Cargill are among the other companies that have also shut meat processing facilities as workers at the plants have shown symptoms of the coronavirus.

The National Cattlemen's Beef Association is even sounding the alarm over the effects on the nation's cattle farmers.

"The onset of COVID-19 has resulted in the steep decline of both the cattle futures market and cash trade - resulting in significant financial challenges for our members," NCBA President Marty Smith said. "After weeks of striking disparity between boxed beef price increases and declines in both the cattle futures and cash price, we fear this trend could have devastating long-term impacts on cattle producers."

While the U.S. may not facing an imminent meat shortage, the more common it becomes for plants to suspend operations and remain shut because of the coronavirus, the more pressure could build on the nation's meat supply chain.

Leftover Crumbs

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  • First loss in 15 years. SoftBank Group expects to report its first annual operating loss in 15 years as the Vision Fund continues to deal with poor investment performance. SoftBank said "the deteriorating market environment" will push SoftBank to an annual operating loss of $12.5 billion. SoftBank didn't disclose which companies in the portfolio are being marked down, but a number of them have announced significant layoffs as of late.

  • Ford will make respirators. Ford is partnering with 3M to produce air-purifying respirators for health care workers. The work will begin today at a plant in Detroit and will be made by about 90 paid volunteers from the United Auto Workers union. Ford declined to provide a timeline of the work, but said the plant will have the ability to produce more than 100,000 respirators.

  • Amazon is hiring 75,000 more. As demand for its services continues to remain high, Amazon is looking to hire 75,000 more employees ranging from delivery drivers to warehouse employees. "We know many people have been economically impacted as jobs in areas like hospitality, restaurants and travel are lost or furloughed as part of this crisis and we welcome anyone out of work to join us at Amazon until things return to normal and their past employer is able to bring them back," Amazon said.

  • eBay lands Walmart executive. eBay has hired Jamie Iannone, Walmart's COO of eCommerce, as its new CEO. Before being promoted to lead Walmart's e-commerce business in February, Iannone served as CEO of SamsClub.com. Iannone also previously worked at eBay from 2001 to 2009, serving as a VP. "The Board believes Jamie is the ideal CEO to lead eBay’s next chapter of growth and success," said Thomas Tierney, Chairman of eBay’s Board.