A Meaty Dilemma

April 30, 2020

Meat processing company execs have to make a tough call.

President Trump’s invocation of the Defense Production Act to deem meat and poultry plants “critical” does not, as some news outlets reported, mandate that they stay open. All it does is preclude the states from shutting them down. Meat processing companies can still close plants on their own initiative.

Which, in a sense, puts even more pressure on them.

As anyone who has been paying attention knows, the meat and poultry industry has been particularly hard hit by the coronavirus situation. Nearly all the COVID-19 deaths that have been reported in the food processing industry have occurred in meat and poultry plants. The sector has had more infections and more plant closings than any other product category.

I’ve never been a fan of President Trump, but I can understand why he took the action he did. The meat industry’s supply chain is particularly susceptible to disruption because of consolidation of production. The Smithfield Foods plant in Sioux Falls, S.D., which is closed indefinitely, accounts for 4% to 5% of U.S. pork production. Several closures of comparable plants would create shortages of meat and drive up prices beyond what American consumers have ever seen.

But now that it’s up to them, meat industry CEOs are faced with a cruel calculus. If they open their plants too soon, they place their workers at risk; too late, and they give away a competitive advantage at best, and roil the market at worst.

It’s always easy to give advice from the sidelines. That said, I would hope this industry’s leaders would err on the side of ensuring their workers’ safety. Not to put too fine a point on it, the industry does not have a good historical record of looking out for its workers’ interests, and I don’t think many neutral observers would be willing to give it the benefit of the doubt.

A few weeks, or even months, of higher prices and shorter supply shouldn’t be that hard to live down. Easier, in any case, than dozens more COVID deaths.

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