John Phipps: Is the Meat Processing Bottleneck Just a U.S. Problem?

USFR-CUSTOMER SUPPORT 5.30.20
There have been COVID related problems in Europe, notably in western Germany and Ireland, but the numbers of workers ill were much smaller. ( AgWeb )

Kirk Barkel from Presque Isle, Michigan asks a pertinent question:

“What are the foreign meat processors doing or don't they have the COVID problem in their facilities?”

Great question. The best comparison would be with Europe, I think, since their system more similar to ours than Asia or Africa. While the EU has very large slaughterhouses, such as the new facility in Huesca, Spain which has a capacity of 30,000 pigs per day, roughly the same size as the largest US facility which is in Tar Heel, North Carolina. The US has over 2500 slaughterhouses where animals are harvested, with 800 of them USDA inspected. There are more large meat processing plants. What is unique about our industry is the concentration. The four largest firms handle over 60 percent of all meat processing, and 80 percent of beef slaughter. Europe is less concentrated, and they still have many smaller abattoirs.

There have been COVID related problems in Europe, notably in western Germany and Ireland, but the numbers of workers ill were much smaller – 100-200. European meat processing has not been seriously impaired during the pandemic.

Several reasons are offered for the difference. Experts suggest the most important is stronger unions for workers and much stricter worker safety rules and sick leave policies. Since almost all European nations have some form of public health care access, and coverage is not tied to employment, workers were less likely to work when not feeling well. This greatly curtailed contagion. European countries also responded much earlier to the threat of COVID19 with personal protection and other contagion prevention actions, even though COVID outbreaks in countries like Spain, Italy, and the UK were quite serious. These differences also contributed to the higher retail cost of meat in Europe – 20% or more higher.

Purdue economist Jayson Lusk has written helpfully about decentralizing the US meat processing system. While this may have some merit from an economic monopoly point of view, he shows it is not the answer to the pandemic-related problems. No matter how big, how many or where slaughterhouses are, workers and output will be at risk without better health care access and worker protection. The pandemic turmoil combined with labor shortages and immigration friction, suggests massive investment in automation is the most likely route for improving our meat processing industry.  

Comments