U.S. grocery meat supply to improve soon, after virus-fueled demand surge: Tyson Foods

By Tom Polansek

CHICAGO (Reuters) – Demand for U.S. meat at grocery stores will likely exceed supplies for at least another week, the chief executive of Tyson Foods Inc told Reuters on Thursday, as the coronavirus pandemic fuels panic buying among shoppers.

Food manufacturers say overall meat supplies are ample to feed the millions of Americans hunkering down in their homes after state and local governments closed schools, bars and restaurants in an escalation of “social distancing” policies aimed at containing the virus.

But a surge in demand for products from chicken and beef to dry pasta at supermarkets has left store shelves and meat cases empty, alarming consumers.

“Once we are able to replenish supplies, which is probably going to take another week or so, then I think that we’ll be back in better equilibrium between supply and demand,” Tyson CEO Noel White said in an interview.

He later added: “In the short term, being a matter of weeks, there are some imbalances that exist.”

The “imbalances” are more demand than supply in sectors like retail stores, White said. The total amount of beef, pork and poultry available in the United States is up about 2% to 3% from last year, he said.

Orders for meat from grocery stores were significantly higher than usual through the weekend, after demand began to shift away from restaurants last week, White said.

“The demand hit very quickly,” White said. “The order fill rate has improved. It’s still not where we would expect it to be.”

Increased buying at supermarkets has lifted overall demand for meat, although the increase has been largely offset by reduced demand from restaurants, White said. Demand from casual dining restaurants, in particular, has suffered, though fast-food restaurants continue to benefit from strong drive-through traffic, he said. Tyson is the largest U.S. meat supplier and counts companies like McDonald’s Corp as customers.

To meet increased retail demand, Tyson has shifted processing facilities to produce food for grocery stores instead of restaurants, White said. The company is running slaughterhouses at full capacity and on weekends, he said.

U.S. cattle futures have dropped sharply on concerns slaughterhouses will close if the novel coronavirus spreads among workers.

To avoid shutdowns, Tyson has begun taking employees’ temperatures at two processing facilities and is expanding the practice to all U.S. workers, according to the company. It expects deliveries of several thousand thermometers on Thursday, White said.

(Reporting by Tom Polansek in Chicago; Editing by Matthew Lewis)

U.S. bans fresh Brazil beef imports over safety concerns

A customer (R) pays for his meat at the Municipal Market in Sao Paulo October 10, 2014. REUTERS/Nacho Doce

By Tom Polansek

CHICAGO (Reuters) – The United States halted imports of fresh Brazilian beef on Thursday, the U.S. Department of Agriculture (USDA) said, after a high percentage of shipments failed to pass safety checks.

The USDA had “recurring concerns about the safety of the products intended for the American market,” after increasing tests on Brazilian beef in March, according to a statement.

The agency raised scrutiny on Brazilian beef and ready-to-eat products as a precaution following an investigation into corruption involving Brazil’s health inspectors that targeted meat companies JBS SA <JBSS3.SA> and BRF SA <BRFS3.SA>.

JBS, the world’s largest meat packer, declined to comment on the U.S. ban.

The USDA’s action threatens the reputation of meat from Brazil, the world’s top exporter of beef and poultry, even though the United States is not a top customer. It also could boost domestic sales in the United States.

“Product was already on the water and that’s not going to be allowed in,” Altin Kalo, a U.S. livestock analyst at Steiner Consulting Group, said about shipments headed to the United States from Brazil via boat.

Since March, the USDA has rejected 11 percent of Brazilian fresh beef products, compared to the rejection rate of 1 percent for shipments from the rest of the world, the agency said. The shipments, totaling about 1.9 million pounds, raised concerns about public health, animal health and sanitation, according to the USDA.

The agency said none of the rejected lots made it into the U.S. market.

The move to block Brazilian meat is a turnaround for Agriculture Secretary Sonny Perdue, who warned in March that Brazil might retaliate if the United States halted beef imports.

On Thursday, he said in a statement that “although international trade is an important part of what we do at USDA, and Brazil has long been one of our partners, my first priority is to protect American consumers.”

The U.S. suspension will remain in place until Brazil’s Agriculture Ministry “takes corrective action which the USDA finds satisfactory,” according to the agency.

A slew of global buyers, including China, Egypt and Chile, curtailed imports of Brazilian meat after Brazilian federal police unveiled an investigation into alleged corruption in the sector on March 17.

Brazilian authorities said at the time that meat companies made payments to government health officials to forego inspections and cover up health violations.

China is not expected to follow the U.S. move as it only permits imports of frozen Brazilian beef, which has different requirements to fresh meat, said analysts.

Brazil is also China’s top beef supplier, and would be difficult to replace in the short-term, said Pan Chenjun, senior animal protein analyst at Rabobank.

The United States began allowing shipments of fresh beef from Brazil last year after banning them due to concerns about foot and mouth disease in cattle.

(Additional reporting by Michael Hirtzer in Chicago, Tatiana Bautzer in Sao Paulo and Dominique Patton in Beijing.; Editing by David Gregorio and Bill Trott)

Price Of Beef Spiking As Herd Levels Shrink

The U.S. Department of Agriculture has reported that the country’s cattle herd has reached its lowest level in 63 years and that ongoing drought in Texas and the Midwest is going to further threaten herd levels.

More than 80 percent of the Lone Star state has been facing abnormally dry conditions that have impacted both farmer ability to water herds but also reduced much of the grass in the state to a level where it provides no nutrition for animals.

One farmer said he’s had major hits to his farm this year.

“We need rain bad,” rancher Stayton Weldon told Bloomberg.  “We’ve got tremendous drought problems.  It cuts your herd size down because people have to sell off to provide for the cattle that are left.”

Weldon has lost 22 cows and two bulls in the last year because of the conditions.

The USDA says the $85 billion a year beef industry will produce at its lowest level in 20 years through the end of 2014.