Spending

Costco, Kroger, and Sam's Club are limiting how much meat you can buy because of plant closures

Twenty/20

During the past month, dozens of the country's most productive meat packing plants have shut down because of the coronavirus.

Tyson Foods temporarily shuttered its Logansport, Indiana, pork plant on April 22 after 900 workers — about 40% of employees — tested positive for the coronavirus. The company told NBC News that the pandemic has forced the company to slow production and close several of its plants. Other meat and poultry processors including Cargill, Smithfield Foods, and JBS have also completely or partially shut down some of their plants as the virus sickens workers.

In all, about one-tenth of national beef production has been affected by plant closures, according to the United Food and Commercial Workers International Union. As of last week, pork production was down 42.9%, Steve Meyer, an economist for an agricultural risk management firm, told SFGate. Poultry production is 7% lower compared to this time last year, according to agricultural lender CoBank.

Even though some plants are reopening this month, these temporary closures have led to emptier meat aisles at grocery stores and possible menu and price changes at fast food chains like Shake Shack and Wendy's. Here's how meat plant closures could affect you. 

Purchase limits are more likely than price hikes 

"Prices might go up a little" at grocery stores, says Karan Girotra, a professor of operations, technology and information management at Cornell University. "A more likely outcome is you will not find meat on shelves." 

Major grocery chains have started putting purchase limits on meat. As of earlier this month, Costco is limiting poultry, beef, and pork purchases to three items per customer, according to its website. Sam's Club is limiting the purchase of poultry, beef, lamb, and pork to one per person, according to the Dallas Morning News

At Kroger, each shopper will be limited to two pork and two chicken items, a spokeswoman for Kroger Mid-Atlantic told Supermarket News. Hy-vee announced May 5 that shoppers will be limited to four items each of a combination of fresh beef, ground beef, pork, and chicken. 

Although you might start seeing emptier meat aisles at your supermarket, it's important to remember that the United States has plenty of meat, Girotra says: "There is not a meat shortage, there is a people shortage. It is not a supply chain issue, it is a health issue." 

There is not a meat shortage, there is a people shortage. It is not a supply chain issue; it is a health issue.
Karan Girotra
professor of operations, technology and information management at Cornell University

Although in late April, President Donald Trump gave an executive order requiring meat plants to stay open, Girotra says that until companies find a way to allow employees to safely return back to work, problems will keep arising in the supply chain. Still, he doesn't expect it to be a long-term issue.

"It's not like a six-month problem, hopefully," Girotra says. "It might require some redesigning and the plants won't run with the same efficiency, but there is more meat." 

For example, a Smithfield Foods meat plant in Sioux Falls, South Dakota, which handles 5% of the United States' pork production, shut down on April 14 after 783 workers tested positive for Covid-19 and two died, according to a report by NPR. The plant partially reopened on May 4 with 250 staff, a little less than 7% of its usual workforce of 3,700. 

Takeout menus and prices could change

Experts says restaurants are likely to be most affected. Almost one-fifth of Wendy's locations reported being totally out of beef, meaning that, at over 1,000 restaurants, burgers weren't available and beef items in general were listed as out of stock. Shake Shack has seen its beef prices spike but it is not experiencing a shortage. 

Some independent restaurants are also seeing ingredient prices soar. Andrew Chen, owner of Monkey King Noodle in Dallas, says he saw beef prices go from $3.30 per pound two weeks ago to $5.50 per pound as of yesterday morning. The restaurant uses 500 pounds of beef per week, he says, meaning his total cost increased by $1,100 per week. 

He hasn't raised prices yet but says he might have to in the coming weeks. "If it is just a spike and will go down quickly, then we won't raise our prices," Chen says. "We'll just eat the cost. But if this is gonna be the new future for a year or so then we need to really consider how we are going to source everything." 

Depending on how long meat plants cease to operate, consumers could see menu changes or higher prices in restaurants that can no longer absorb the costs. 

Where to find meat if your grocery store chain is out 

The best way for shoppers to get meat, and at reasonable prices, is to shop around. Many meat plants are still operating, which means there are supermarkets, wholesalers, and other outlets who aren't seeing changes in supply or prices. 

For example, some wholesalers have not been affected. Farm to Table, a wholesale company in Austin, Texas, started selling products directly to consumers earlier this spring as a result of the pandemic. Their meat supply is stable, say Farm to Table director of operations Sam Lash. 

"I haven't had to alter prices as my suppliers are completely separate from the commodity slaughter houses that are being affected," he says. 

VIDEO8:0308:03
We tried meal prepping and buying lunch to determine which method is best

Video by Jason Armesto

Small or local grocery stores will still have meat on shelves, too, says Stew Leonard Jr., owner of regional grocery chain Stew Leonard's. At Stew Leonard's seven locations, meat supply has not been affected by the meat plant closures. 

"We don't buy from big national meat plants," he says. "We buy from family farms." 

That has helped secure the supply. "Social distancing is much easier to maintain in a smaller plant," Leonard says. "They have been able to adapt quicker." 

If you can't easily find beef, pork, or chicken, you can try switching to seafood, Leonard suggests, as there is a "plentiful supply of fish." 

"I think when we're done with this whole thing, everyone cooking at home, you're gonna see an increase in fish consumption," he says. "There's plenty of fish. Even lobster. You can eat really good."

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