Production shutdowns shrink meat supplies at stores

U.S. meat supplies are dwindling due to coronavirus-related production shutdowns. As a result, some stores like Costco and restaurants like Wendy’s are limiting sales.

As of Monday, U.S. beef and pork processing capacity was down 40 percent from last year, according to Jayson Lusk, head of the department of agricultural economics at Purdue University. Multiple U.S. meatpacking facilities have closed in the last two weeks due to coronavirus outbreaks among workers.

President Trump issued an executive order last week requiring meatpacking plants to stay open, and some are gradually going back on line. In the meantime consumers will likely see some shortages and higher prices for beef and pork, Lusk said. Poultry production has also been impacted, but to a lesser degree.

Just over 1,000 Wendy’s restaurants — or nearly 20 percent — had no beef items available on their online menus Monday night, according to an analysis by Stephens Inc., an investment bank. Stephens analyst James Rutherford said some states, like Ohio, Michigan and New York, seemed to be impacted more than others.

Wendy’s responded that some menu items may be temporarily limited, but it continues to supply its restaurants with beef two to three times a week. The company said it's trying to limit disruptions to its supplies.

Costco, Sam's Club, Hy-Vee and Kroger are limiting purchases of meat to avoid panic buying. Kroger Co., which also owns Ralphs and Harris Teeter markets, said it wants to ensure buyers have a broad assortment. Kroger is only limiting purchases of ground beef and fresh pork for now.

“There is plenty of protein in the supply chain. However, some processors are experiencing challenges,” Kroger said in a statement.

Empty and underfilled coolers greeted shoppers in the meat department at the Costco in the Minneapolis suburb of St. Louis Park Tuesday morning, one day after the retailer started limiting fresh meat purchases to three items per customer.

There was a crowd at the meat department. While there was a large supply of organic ground beef in one cooler, several cuts of beef and pork appeared to be in short supply judging from the coolers that were empty.

Meanwhile, some companies — including Target and McDonald’s — have no restrictions in place. McDonald's said last week it has seen no supply interruptions because it uses a wide variety of suppliers.

Some makers of alternative proteins see an opening. Impossible Foods, a California-based startup that makes soy-based burgers and sausage, said Tuesday that it’s accelerating its retail sales after seeing a falloff in sales to restaurants. Its burgers will go on sale at 1,700 Kroger grocery stores starting this week, which more than doubles the number of stores offering them. In January, the burgers were only available at 250 stores nationwide.

Impossible said consumer awareness of its products is up sharply, and it's seeing evidence that more people are trying alternative meats. The company said it's able to produce them safely because workers can stay farther apart and more machinery is automated than in slaughterhouses.

“Anytime there’s a spotlight illuminating what’s actually involved in slaughtering animals and producing meat it is bad news for the meat industry,” Impossible CEO Pat Brown said.

Dr. Praeger’s, a New Jersey-based maker of plant-based chicken tenders, veggie burgers and other products, said it has also seen higher sales since the pandemic began and is adding another production line to handle demand.

Nielsen says sales of fresh meat alternatives were up 224 percent the week ending April 25. It noted fresh meat sales jumped 50 percent in the same period.