Carter Ray recently put a temporary freeze on orders of hindquarters, front quarters, and sides of beef that were coming into his North San Antonio store, Wiatrek’s Meat Market.
A sharp uptick in calls began about seven weeks ago when the coronavirus outbreak began, Ray said, as did the number of customers lined up at the counter for smaller purchases of beef, pork, and chicken.
Ray is hoping a few weeks’ pause will help him catch up to a demand that’s also leaving the packaged meat shelves thinner than usual at major grocery stores as the nation copes with supply chain interruptions driven by the COVID-19 pandemic.
Last week, H-E-B put purchase limits on various meat products, a move reminiscent of the toilet paper shortages in previous weeks. A spokeswoman said H-E-B has a “strong supply of meat products” and limits are meant to ensure access for all customers. “We will continue to do our best to bring Texans low prices while this temporary supply disruption is resolved,” she said.
Managers at one of the 12 Culebra Meat Market locations in San Antonio, at Schott’s Meat Market in Helotes, and the owner of Dziuk’s Meat Market in Castroville also reported a bump in business and reduced inventories.
“It’s a roller coaster – it’s hard to know what tomorrow’s going to bring,” said Marvin Dziuk, owner of Dziuk’s. “The food chain is still trying to fill the demand, it’s just that, with the panic buying, you create a lot more demand on a market that’s struggling to keep up.”
But the problem isn’t a shortage of animal product or even pandemic-induced panic buying and hoarding — a March report by the U.S. Department of Agriculture said the total red meat supply in the nation’s freezers was up 7 percent from last year — instead, as Tyson Foods Chairman John Tyson said last week in ads his company placed in major news outlets, “The food supply chain is breaking.”
The logjam is at meatpacking plants across North America which have become COVID-19 hot spots. From Illinois and South Dakota to Pennsylvania and the Texas Panhandle, plants have been forced to suspend or reduce operations to cope with coronavirus outbreaks within the meat-cutting factories where workers toil in conditions conducive to the spread of the virus.
A Centers for Disease Control and Prevention report stated that COVID-19 cases have been confirmed in 115 meat and poultry processing facilities in 19 states. Among the 130,000 workers at these facilities, 4,913 cases and 20 deaths were reported.
The family-owned local meat market, Bolner’s Meat Company, closed April 3 after one of its longtime managers, Joe Doria, was diagnosed, then hospitalized, with coronavirus. Doria has since recovered, but a recorded phone message tells callers the store remains closed.
“All plants are running slower than they were before,” said David Anderson, an economist who specializes in livestock and food product marketing with the Texas A&M University AgriLife Extension Service. “What we’re starting to see now is the effects of a lot fewer animals going to go into a packing plant … and a tightening of meat supplies going into the wholesale market.”
But with a pandemic unforeseen months ago, producers already had livestock in the pipeline, preparing to meet a consumer demand that accounted for growing export markets in pork and chicken and a cyclical beef industry rebounding from droughts in 2011 and 2012. When meat processing plants closed, there was nowhere to go with them, and some producers and meatpackers are reportedly euthanizing excess animals.
The bottleneck is complicated by an economy nose-diving into recession and widespread restaurant closures that pushed consumers into grocery stores. In the early days of the outbreak, beef prices actually declined as customers rushed for staple goods. Then restaurants closed, also changing the dynamic.
“All of a sudden, restaurants are no longer buying but grocery stores are faced with a stampede of people and they have to jump into the market and buy a lot more beef than they normally would have bought,” Anderson said. “At the same time, you have grocery stores thinking about what they are going to order for their orders six weeks from now or two months from now.”
During the Great Recession, he said, consumers avoided pricey cuts of meat such as steak and brisket, and purchased more hamburger meat, a buying pattern grocers may have anticipated this time around.
Then meat processing plants began to close about two weeks ago, again impacting the supply chain.
On May 4, beef prices skyrocketed to $4.04 a pound. “Which is by far a record high,” Anderson said on Monday. The price spike also presents a kind of double whammy, he said, for restaurants starting re-open their dining rooms at a time when meat prices are increasing.
On April 28, President Donald Trump signed an executive order that invokes the Defense Production Act and requires meat plants to continue operating and prioritize certain contracts, such as the military, over supermarket chains. The order does not require workers to show up at the plant, however.
As the crisis evolves, U.S. meat plants are expected to reopen and regenerate production lines, but it will be slow, Anderson said. On Monday, Smithfield’s pork processing plant in Sioux Falls, South Dakota, where 761 employees tested positive for coronavirus, began a partial reopening.
But in Texas this week, a federal strike force of health experts has been deployed to manage an outbreak at the massive JBS Beef meatpacking plant in Amarillo. The rate of COVID-19 infections in the region has exceeded some of the state’s largest urban areas.
In San Antonio, Beau Schott said his family’s store, which last year moved closer to the city, is seeing twice as many customers at its new Helotes location than it had only weeks earlier. But most customers are buying only what they need to augment what they can get from H-E-B or Walmart, he said.
As prices have gone up on some cuts of meat, such as chuck roast, Schott’s has eliminated those items from its inventory rather than pass the higher cost along to customers. “This week has been the toughest week to find stuff,” Schott said. “But pretty much it’s the high prices that is bad right now.”
The owners at Wiatrek’s and Dziuk’s, meat markets founded originally in the small Texas town of Poth, both said they operate their own slaughter and processing plants in addition to sourcing meat product from various suppliers.
Some of Wiatrek’s orders come from the distributor frozen rather than fresh, Ray said. “It’s not a guarantee on fresh products right now.”
Wiatrek’s also has purchase limits on hamburger meat – 10 pounds per customer. Steak prices in the store have risen sharply.
“We’re maximizing what we can with our cattle ranchers on our agreements with them,” Ray said. “We’re thankful for what they’re doing because they’re trying to expedite their supply chain and feeding out the animals appropriately.”