As coronavirus bolsters meat demand, processors approve pay raise for North American farmers and workers
On 23 March, North American meat processors agreed to pay extra money to farmers and slaughterhouse workers as companies struggle to meet surging demand from consumers who are stockpiling meat.
24 March 2020
2 minute read
According to reporting from Reuters, industry giants like Tyson Foods and Cargill Inc are moving to ensure their slaughterhouses remain supplied with cattle and that employees can continue their work.
Beef is in high demand as shoppers empty grocery stores and stockpile meat during social distancing orders as part of efforts to contain the highly contagious coronavirus.
Tyson said it would pay farmers a one time premium on cattle slaughtered this week after facing objections over the company’s soaring profits.
"This is an unprecedented time and the intent of our response is to show our support in an effort to help our supply partners weather this extraordinary situation," Tyson said.
Tyson declined to disclose the size of the payments. They are $5 per cwt (100 pounds) for live cattle and $7.94 per cwt for dressed cattle, according to cattle producers.
"They help but they're not going to make whole the losses we're taking," said Lee Reichmuth, a Nebraska cattle producer and board member for the United States Cattlemen's Association.
Margins for US beef processors hit a record high of nearly $580 per head of cattle on 23 March, up from around $170 a week ago, according to livestock marketing advisory service HedgersEdge.com.
Margins climbed as prices for cuts of beef that companies ship to wholesale buyers increased by 20 percent in the past two weeks. April live cattle futures prices fell about 7 percent over the same period as traders worried that the virus could shut slaughterhouses.
US Agriculture Secretary Sonny Perdue issued a tweet saying that the agency was monitoring agricultural markets. He tagged just two commodities in his post - #cattle and #beef.
"We are paying special attention to the difference in prices from the farm gate to the grocery shelf," Perdue wrote.
US beef processors increased their slaughter last week to an estimated 653,000 cattle from 633,000 a week earlier and 636,000 a year earlier, according to the USDA.
Cargill will pay US and Canadian slaughterhouse workers a premium of $2 an hour until 3 May, with a bonus of $500 to those who complete weekly shifts over a period of eight consecutive weeks, according to the company.
Maple Leaf Foods Inc and Hormel Foods Corp also said they were giving employees temporary pay increases or bonuses.
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