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Recently, the USDA announced a $4 billion initiative to support the Administration Build Back Better Program. In a recent industry conference call, the USDA emphasized that the program would address many aspects of food production, processing, distribution and availability to consumers. The USDA and industry have recognized criticality in processing capacity and the lack of any safety factor. This was evident in the disruption caused by the fire in the Tyson Foods beef plant in Holcomb KS. in 2019 followed by the sharp decline in throughput as a result of COVID infection in red meat plants during the first quarter of 2020.
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Holcomb KS Plant Closed after Fire |
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Colin Woodall, CEO of the National Cattlemen's Beef Association (NCBA) express the support of his membership for the program as outlined by the USDA. Woodall emphasized that capacity of red meat processing represents a bottleneck in the chain of production extending from farmers to retail. The lack of ‘hook space’ has depressed the revenue of producers and has impacted supply. The NCBA is pressing for more packing facilities and favors multi-state distribution of beef from plants operating under state inspection.
The red meat industry including beef and pork is highly concentrated and COVID affected many plants simultaneously. In contrast chicken production is less vulnerable to extrinsic challenges given the relatively lower geographic concentration of production facilities and the fact that production is spread over many more processing operations compared to pork and beef.
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