Meatpacking Industry Facing Challenges and Changes

At the beginning of June, Montana Governor Steve Bullock announced the state was making available $2 million dollars to boost in-state processing and storage capacity for local meat processors. The monies will come from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Local meat processors saw a boom in business as the industry giants suffered from virus outbreaks, employee absenteeism, and plant closures. Consumers across the country turned to local processors to fill an expected void as ranchers were left with extra animals on hand as butchering came to a near standstill.

Now, local processors are saying that without federal aid, they will not be able to continue to meet the demands imposed on them. Many very small processors, like Treasure Trail Processing in Glasgow, lack the storage capacity needed for increased demand. Already facing a waiting list of customers, Doug Wixson does not have the available space to take on the level of business that would replace mass-produced meat products.

Governor Bullock said in his announcement, “These grants will boost processing and storage capacity. They’ll help Montana businesses put more Montana meat onto more shelves. Plus, an increase in in-state processing means more direct sales, and better, value-added markets for producers.” The overall hope long-term is to create local markets that can compete with the meat processing industry leaders. Locally, consumers have voiced outrage over the increased prices at grocery stores that came in conjunction with lower prices paid to producers.

Area consumers have vowed that they plan to either purchase directly from local ranchers and use small processors, or fill their freezers with wild game this hunting season. This renewed call for local business may not last though, according to organizations representing small meat processors. They warn that increased waiting times and initial upfront costs for beef and pork could drive consumers back to grocery stores shelves for their protein needs.

The $2 million allocated by the state of Montana seeks to mitigate that concern by allowing small and very small processors to expand their operations. However, those expansions will take a considerable amount of time and more than likely require an increase in the number of workers at local processors. Bringing on new employees could further delay processing as businesses take time to recruit and train new employees. In Valley County, which has traditionally seen very low unemployment numbers, finding workers to train and retain could prove challenging.

At the same time, the four largest U.S. beef packers -- Cargill, Tyson Foods, JBS and National Beef -- are facing their own issues. Outbreaks continue and employee absenteeism continues even with new safety measures installed in the plants. Production is nearly back up to capacity but concerns over the industry are abound.

As meatpacking plants strived to stay open in alignment with President Trump’s executive order declaring them essential, exports to China soared, according to a report in the New York Times, drawing ire from American consumers who questioned the priorities of the industry, putting another nation’s needs above those of the American people.

Industry leaders have also been accused of placing profits ahead of people, facing criticism from local health officials across the country for hiding the true numbers of infected employees and disciplining workers who called in sick. While officials across the country had for years prepared for pandemics that could hit animals, threatening the food supply, those officials had no plans in place to address a pandemic that targeted humans rather than animals.

Concurrently, the big four are facing a number of federal probes into potential anti-trust practices and price fixing. The probes allege that the companies worked together to limit the market, allowing them to pay producers less for their meat while increasing the prices charged to grocery stores and other outlets.

Montana is one of the states leading the way for changes to slowly pivot from the corporation-driven market to focus more on local processing to benefit both consumers and producers. Though such changes to the food supply chain will take considerable time, the state remains in a solid position to make the move as agriculture remains a driving force in the state’s economy. The proposed shift will take patience, continued funding and support from government and consumers.