UPDATE: April 16, 2020: Smithfield Foods will close an additional two plants in Cudahy, Wisconsin, and Martin City, Missouri, this week, the company announced in a release. The Missouri plant produces spiral and smoked hams using pork from the previously closed Sioux Falls, South Dakota plant, which now has more than 500 cases of COVID-19 among its workers.
- Smithfield Foods is closing its Sioux Falls, South Dakota, facility as hundreds of employees have tested positive for the coronavirus. South Dakota Governor Kristi Noem said Saturday that 238 Smithfield employees had coronavirus, accounting for 55% of the state's total. Noem and the mayor of Sioux Falls recommended shutting down the plant for at least two weeks, Reuters reported.
- The facility is one of the biggest pork processing plants in the U.S., making up about 5% of U.S. pork production. Smithfield said the facility supplies nearly 130 million servings of food per week and employs 3,700 people.
- "The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply," Kenneth Sullivan, president and CEO of Smithfield, said in a statement. "It is impossible to keep our grocery stores stocked if our plants are not running."
Although there is plenty of food in the U.S., this Smithfield plant closure is the latest disruption to the food supply chain and showcases the increasing strain that demand is putting on food people who work in close quarters and are susceptible to catching the coronavirus. As the outbreak continues and facilities shut down, shortages could emerge for certain meat products such as pork.
It appears Smithfield was at first hesitant to close the South Dakota plant despite a growing number of cases. More than 80 coronavirus cases were confirmed last week before the company decided to shut down the plant temporarily after some urging from state officials. Now, the plant is closed indefinitely. The company said it will resume operations in Sioux Falls once it gets more direction from local, state and federal officials. Smithfield said it will continue to compensate its employees for the next two weeks.
Meat processing plants have been especially impacted by outbreaks and a rising number of plants are shutting down as a result. Tyson Foods and JBS recently announced they were temporarily closing meat processing facilities after employees tested positive for the virus. Cargill also shuttered a Pennsylvania plant this month after an unspecified number of employees were diagnosed, and Maple Leaf suspended operations at an Ontario plant. Sanderson Farms also is cutting chicken processing for three more weeks in a Georgia plant after employees got sick and 415 healthy workers were told to stay home.
As production falls, retail demand for meat is rising as consumers stock up during the pandemic. The U.S. government considers food manufacturing a part of the nation's critical infrastructure so it will continue operating. Vice President Mike Pence has urged food workers to keep working despite the risk. But as hundreds of plant workers become seriously ill and some even die, more companies are shutting down plants temporarily.
To avoid shut downs, many manufacturers are increasing hygiene protocols to keep workers safe and production going, but it seems those haven't yet been wildly successful. Perdue Farms recently announced it would install temporary partitions between workers and Tyson Foods is rolling out infrared body temperature scanners at three of its processing facilities to prevent additional plant closures.
Farmers also have been hit hard by plant closures and shifts in demand, and those impacts will likely keep coming. Smithfield said more than 550 independent family farmers supply the South Dakota plant.
"These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers," Sullivan said. "These farmers have nowhere to send their animals."
Amid growing global demand in recent years for pork, Smithfield has poured money into its Sioux Falls operations and added jobs. The company invested at least $118 million into the facility while closing other locations. Smithfield Foods announced earlier this year it was closing a San Jose facility in California; the company also shuttered a distribution center in Virginia and another plant in the Golden State last year.
The consolidation strategy may work well when it comes to cost savings and efficiency when things are going well across the industry and in the U.S. as a whole. But as the closure in Sioux Falls has shown, relying heavily on one plant can at times be a risky decision.