Ag supply chain preps for COVID-19 uncertainty

The U.S. Department of Agriculture says it will continue to operate during the coronavirus, despite large scale shutdowns across the country. “[USDA’s Food Safety and Inspection Service (FSIS), Animal and Plant Health Inspection Service, and Agricultural Marketing Service] are prepared to utilize their authority and all administrative means and flexibilities to address staffing considerations.” said Mindy Brashears, USDA deputy under secretary for food safety, and Greg Ibach, USDA under secretary for marketing and regulatory programs, in a statement to the industry.

The announcement said the department will continue to work closely with management at individual companies and local health authorities to handle issues as they arise. Another statement assures that “planning for absenteeism is a part of normal FSIS operations” and the department will work to minimize impacts while also “prioritizing inspection … based on local conditions and resources available.”

In 6,200 federally inspected slaughter and processing facilities across the country, thousands of FSIS inspectors work to protect the health of meat and poultry products, which have seen a significant uptick in purchase in recent weeks. These inspection activities are required by law, and though concerns have been raised about the possibility of an outbreak in any facility, industry representatives say that would be unlikely to spread to other facilities.

Media reports of coronavirus among slaughterhouse workers have surfaced in recent days, including cases at a JBS plant, in Pennsylvania, that led the company to announce temporary reductions in production, according to the Rural Radio Network.

Packers and auctions

“While I do not know the specifics of our members’ contingency plans, we predict that should a facility or region shut down due to the virus, other plants in the region would pick up the processing,” said Sarah Little, vice president of communications at the North American Meat Institute, in an email.

She said the industry has looked to the recent fire at a Tyson Foods beef packing plant, in Holcomb, Kansas, as an example that when one facility goes offline, others largely pick up the slack. “As far as we know, plants are running extra shifts and on Saturdays,” Little wrote.

Labor is a bigger concern, both for meat processors and growers and packers of fresh produce. “We have not seen a situation where a plant would completely close down due to labor shortages,” Little said, “but many companies are prepared for that.”

The White House’s recent move to eliminate the requirements for H-2 in-person interviews, which should streamline the process of bringing migrant workers in through the H-2A program, is no help further up the supply chain, as packers with year round operations don’t qualify for the program.

A recent report by ProPublica details how individual companies are responding to protect existing workers, including whether they’re offering paid sick leave, temperature checks, or social distancing in the workplace.

Livestock auctions, too, are feeling the pinch of helping to flatten the curve. “Auctions are taking measures at the moment to reduce crowds in a way they can continue operating,” said Chelsea Good, vice president of government and industry affairs at the Livestock Marketing Association. The organization is encouraging livestock markets to limit their attendees to buyers only, discourage attendance of children, encourage individuals to maintain the Centers for Disease Control-recommended six foot distance, and request that consignors deliver livestock and return home, rather than remaining at the facility. They’re also encouraging their members to evaluate options for web broadcast or phone bidding.

Questions of whether any agricultural businesses would be shuttered during the virus have been largely answered by the U.S. Department of Homeland Security, which labeled agriculture and food workers critical to the nation’s infrastructure, meaning workers will continue to report throughout the crisis.

Congress sends help

The Coronavirus Aid, Relief, and Economic Security Act was signed into law March 27, making $2 trillion dollars available to support the U.S. economy, including $34.9 billion for the USDA and the U.S. Food and Drug Administration to continue to respond to the coronavirus pandemic, according to a Senate Appropriations Committee fact sheet.

“At USDA, we will deliver relief assistance to farmers and ranchers as quickly as possible,” said USDA Secretary Sonny Perdue in a statement March 27. “At USDA, we are doing our part to ensure those who need help will get it, whether it’s through nutrition assistance, ensuring the food supply chain is safe and secure, or through new flexibilities with our Rural Development loan programs.”

The USDA will also have access to an additional $14 billion in funds, through the Commodity Credit Corporation, the controversial lending authority that was used to facilitate the 2018 and 2019 versions of trade relief packages for farmers. Plus, the bill provides for an additional $9.5 billion to assist producers impacted by COVID-19, including “specialty crop producers; producers who support local food systems such as farmers markets, schools, and restaurants; and livestock producers, including dairy.”

Farmers and small to medium agricultural businesses will also have access to small business loans from eligible lenders, including farm credit institutions. Farm Credit recently announced in a statement that it will “remain open and continue making loans and serving our customer-owners. Farm Credit institutions also remain financially strong and have the resources necessary to ensure credit continues to flow during this crisis.”