For steakhouses awaiting the opportunity to reopen their dining rooms in May, today’s developments offer some reassurance. On Sunday, Tyson Foods published full-page advertisements in major newspapers indicating that its supply chains were alarmingly stressed. Media ran with the story from Monday with dire predictions about the ability of restaurants to serve meat at economical prices. Even restaurants with well-rounded menus were growing concerned that the incidental meat price hikes which they witnessed during April would begin skyrocketing in May.
Then this afternoon, President Trump announced his intention to use the Defense Production Act to order Tyson and other meat processing facilities to stay open. The order will accompany “additional protective gear for employees as well as guidance” from the government.
Shares of Tyson Foods on the New York Stock Exchange rallied approximately 3% after the announcement. Restaurant owners breathed a sigh of relief. On Monday, restaurants in Georgia reopened for the first time since entering lockdown, and massive price hikes would have been unmanageable amid their onerous obligations. Texas restaurants famous for steaks, roasts, and briskets were preparing to reopen as early as Friday morning.
It all started when Chairman John Tyson wrote his discomforting warning in a full-page ad which appeared in the print editions of the New York Times and The Washington Post. The following excerpt illustrates his appraisal of the industry.
“Farmers across the nation simply will not have anywhere to sell their livestock to be processed, when they could have fed the nation. Millions of animals – chickens, pigs and cattle – will be depopulated because of the closure of our processing facilities. The food supply chain is breaking.”
Due to the high levels of exposure to organic material in the air while working, both employees and public health advocates have escalated their concerns about meatpacking facilities and the associated stability of the national food supply. Understandably, workers are reluctant to go to work, and companies are struggling with continuity and operational profitability. Similarly, restaurants are concerned about their food costs as they continue takeout and delivery services, or prepare to reopen in certain states like Alaska, Georgia and Texas.
Non-profit publication The Counter is tracking COVID-19-related closures of slaughterhouse and meatpacking facilities. “Workers face real fear for their health and safety,” said journalists at The Counter. “As long as that’s true, current slaughter capacity will be limited.” Its tracker shows at least 15 meatpacking facilities currently closed due to COVID-19.
Even President Trump retweeted The Counter’s statement, “First, there is no shortage of meat destined for the grocery store shelf. It might take stores longer than usual to restock certain products, due to supply chain disruptions. But we have many millions of pounds of meat in cold storage across the nation.”
White House aides took the stance that they did not believe, as a matter of policy or law, that action could be taken to directly support Tyson or guarantee the meat processors without the federal government invoking the Defense Production Act. Now that the President has indicated his willingness to invoke it, White House General Counsel Pat Cipollone will be consulting with JBS, Tyson, Smithfield Foods, and other meat processors to design the federal mandate which will provide funding to keep the plants open, including free virus testing kits and protective gear.