COVID-19 and its Economic Impact on Consumers and Restaurants in the US meat Industry

COVID-19 in the US has had a major impact on all areas of life, including our economy. One specific area which has had a significant economic impact, as well as serious repercussions, is the US meat industry. It is estimated that nearly half of COVID-19 cases in the US are directly related to meat processing plants. A meat processing plant in the US is a hotbed for COVID-19 cases due to cramped up working conditions as well as no proper use of PPEs by the workers. We are witnessing one of the highest rates of COVID-19 infections due to such working conditions in these plants.

When it comes to health and safety, we should understand that meat processing farms have always been under the spotlight. On various occasions, it was noted that the workers were exploited in numerous ways. One commonality was the fact that even if a worker were feeling sick, he would still be forced to work. Secondly, the work environment in a meat processing plant isn’t exactly wholesome. It has a harsh working environment, and a lack of essential PPE has contributed to the spread of COVID-19. This, in turn, has made a severe economic impact on the meat industry itself as consumers and restaurants are facing an unprecedented shortage.

The Case of Nebraska:

It’s interesting to understand how COVID-19 has a high infection rate where meat processing farms are located. In this state, five counties have recorded to have the second-highest number of COVID-19 cases in the country, and the infection rate can be traced down to meat processing plants. One of the major reasons why infection rates are high in such areas is because of the fact that the employees are unable to maintain physical distancing, and hence the spread is rapid.

“The Food Supply Chain is Breaking”

This statement was made by one of the biggest meat processors in the country, Tyson Foods. In a New York Times article, Tyson Foods were pretty adamant on the fact that the country would face unprecedented shortages in meats as the pandemic grips itself on our economy. The effects will be devastating for consumers as well as restaurants as supply is going to come at a halt as many of the meat processing plants in the US have shut down. As soon as the workers were found to be positive, the decision to shut down meat processing plants was made, which in turn has put a significant drop in meat production. Another thing to note is that the meat plants do have the animals; however, they have stopped the production of meat in processed packaging, which is the reason why supply has been dampened by the pandemic.

A USDA report from April 27, exclaims that pork and beef productions went down to 15% and 25%, respectively. These are sizeable numbers and are bound to leave a devastating impact on restaurants and consumers. 

So, is there a meat shortage for all consumers and restaurants?

Unfortunately, yes, as supply has been hit substantially and even at this point in time, meat processing plants are either shut down or working with health protocols. This has forced them to operate on a much smaller scale due to which a shortage is imminent. You will notice that meat stores will have a lesser variety of meat or no meat at all. It’s just that the demand is high, and as soon as meat arrives in a store, it’s bound to be gone in a very short time. Hence, consumers and restaurants will face a shortage of meat. Restaurants will suffer to get their profits back to the same way they were before the Pandemic.

Will there be a change in meat prices?

Every time some major event such as a pandemic hits an economy, the prices are going to be affected. According to some experts, the prices of meat products will continue to rise for at least the next year. This is going to affect restaurants in terms of their business, and consumers will have to be careful in whatever they’re going to buy. The entire problem is that the process of packaging and production may take time to be with new health regulations and guidelines. Until then, it is going to be tough on everyone’s wallet.

Which Products are going to be affected in terms of pricing?

So, this question can be addressed through simple economics. Whatever is popular is going to get steep when it comes to pricing. This includes items such as beef, bacon, and chicken. Other items, such as the tongue, might remain the same. Other factors also come into play when deciding on how much increase we might witness in pricing. For example, products that undergo flavoring or require special conditions to be processed will also experience a price hike.

What’s happening currently?

Well, in a not so surprising turn of events, Wendy’s has run out of hamburgers! Even some of the biggest supermarket chains have limited the purchase of meat products to a single consumer. Even Costco, where people prefer bulk buying, has put a certain cap on meat products so that they do not run out of it as soon as they stock their shelves up. It is estimated that nearly 1000 Wendy locations are currently facing shortages in beef which gives us a glimpse into how other restaurants may be affected.

The situation with meat shortage and how to deal with it for both the consumers and restaurants is going to have a long-lasting effect. We don’t really know what’s going to happen by the end of this year, but the situation doesn’t look great in terms of pricing and production. One thing is established for sure, that meat processing plants need to maintain safe working conditions as stopping the infection rate should be the main priority.