by Troy Bishopp

SOUDERTON, PA – Officials, livestock marketing hubs, truckers and beef and dairy producers are holding their proverbial breath as news came down March 30 that Souderton’s JBS USA beef processing plant will reduce production for about two weeks after several staff members exhibited “flu-like symptoms.”

The plant, owned by Brazilian meat conglomerate JBS SA, located about 40 miles northwest of Philadelphia and employing about 1,000 people, processes roughly 2,200 dairy and beef animals per day from the Northeast region. It produces beef under the Moyer, 5 Star and Swift brands, among others, for sale along the East Coast.

JBS issued the following statement on the situation: “The JBS Souderton, Penn., beef production facility has temporarily reduced production because several senior management team members have displayed flu-like symptoms. Out of an abundance of caution, these team members have been sent home to self-monitor their health in light of the continued spread of coronavirus (COVID-19). We anticipate the facility will return to normal operations on April 14, 2020. We wish our team members a speedy recovery and salute the healthcare professionals who are tirelessly working to protect us all. We also thank our team members and everyone who is helping to keep food on tables during this challenging time.”

The news is troubling because March saw a record harvest of beef animals to meet shelter-in-place panic buying. “While this is not one of the major plants, it will have ripple effects in the industry,” said Brad Kooima of Kooima, Kooima & Varilek.

“The processing reduction will likely jolt the U.S. meat industry (2% of the U.S. daily cattle processing), which is adjusting plant operations and boosting worker pay to keep processing lines staffed. Heavy demand from supermarkets along with sagging commodity markets have sent meat processing profit margins soaring and some plants have run extra shifts over the weekends,” reported Wall Street Journal’s Jacob Bunge.

Regionally and locally, it’s a punch in the gut for all involved in the beef industry. This is little solace for beef and dairy farmers who have had a long-time concern about meat and dairy industry consolidations. “Recently Cargill in Wyalusing, PA, made the decision to only process cull cows and bulls. Therefore, the only significant buyer of finished cattle is NOT operating. The hope is to reassess in two weeks, but the decision to re-open depends on having an adequate workforce. Cargill is the major buyer of cull cows and bulls. Nicholas Meats in Loganton, PA, is a mid-size plant and predominantly processes cull cows and bulls. The ramifications to producers are that prices will decline,” said Cornell University Beef Cattle Specialist Michael J. Baker. “There are some larger processing plants in Michigan, Wisconsin and Georgia. Whether these plants will send buyers to purchase cattle is unknown at this time. If they do, the cost of freight and predicted shrink will increase.”

“In New York, boner/lean cows brought $51-$60/cwt the week of March 20-26. Prices this week are expected to be $5 to $10 lower, and potentially going lower moving forward. Last week, Choice and Prime 3-4 steers brought $112-$116/cwt. With a major buyer out of the picture, there is essentially no market for finished beef,” Baker said.

“It’s important to understand that this is also due to labor constraints. Employees with young children that must be schooled at home are now having to provide childcare and therefore may not be able to come to work,” he continued. “The best advice I have based on talking with buyers and livestock auction market managers is that unless you have cull cows or bulls that must be marketed, leave them on the farm.”

As this is an active and ongoing situation, check in at blogs.cornell.edu/beefcattle for updated information.