On Friday, we posted, We're not New York City: Sioux Fall Smithfield packing plant 4th largest hotspot in United States, when the pork-processing plant was slated to close for a three-day wipe-down.
Everything has changed, as the count of positive COVID-19 cases among the 3,700 person workforce climbs to 238. The Sioux Falls Argus Leader reports in Smithfield Foods to close Sioux Falls plant indefinitely amid COVID-19 outbreak:
Smithfield Foods will close its Sioux Falls facility until further notice, the company announced Sunday in a news release.
The closure comes after the South Dakota Department of Health said 238 of Minnehaha's 438 COVID-19 cases involve "individuals who work at Smithfield Foods." The plant was identified as the largest hot spot in the state with about 38% of the state's cases. Those numbers were last updated Saturday.
Smithfield will fully shutdown on Wednesday. The plant will partially be operated through Tuesday to process inventory, according to the news release.
More: Noem: Smithfield Foods in Sioux Falls needs to shut down for 14 days
Smithfield previously announced that it would close for three days for cleaning starting Saturday and continue through Monday.
On Saturday, Gov. Kristi Noem and Sioux Falls Mayor Paul TenHaken sent a letter to Smithfield, asking operations to close for two weeks so the facility could be cleaned and employees could recover from any suspected illness. The call to action also requested that Smithfield continue to pay its 3,700 employees during the closure, though the state won't be providing any financial aid to the company, Noem said on Saturday. . . .
Smithfield Foods, Inc. announced Sunday that its Sioux Falls, S.D. facility will remain closed until further notice. The plant is one of the largest pork processing facilities in the U.S., representing 4 to 5% of U.S. pork production. It supplies nearly 130 million servings of food per week, or about 18 million servings per day, and employs 3,700 people. More than 550 independent family farmers supply the plant.
"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. It is impossible to keep our grocery stores stocked if our plants are not running. These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation's livestock farmers. These farmers have nowhere to send their animals," says Kenneth M. Sullivan, president and chief executive officer, for Smithfield.
"Unfortunately, COVID-19 cases are now ubiquitous across our country. The virus is afflicting communities everywhere. The agriculture and food sectors have not been immune. Numerous plants across the country have COVID-19 positive employees. We have continued to run our facilities for one reason: to sustain our nation's food supply during this pandemic. We believe it is our obligation to help feed the country, now more than ever. We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19."
In preparation for a full shutdown, some activity will occur at the plant on Tuesday to process product in inventory, consisting of millions of servings of protein. Smithfield will resume operations in Sioux Falls once further direction is received from local, state and federal officials. The company will continue to compensate its employees for the next two weeks and hopes to keep them from joining the ranks of the tens of millions of unemployed Americans across the country.
According to the U.S. Food & Drug Administration, there is no evidence of food or food packaging being associated with the transmission of COVID-19.
While that last sentence should be a relief for consumers concerned about picking up COVID-19 in their morning bacon, we're concerned about what market might exist for the hogs scheduled for slaughter in Sioux Falls. Contract farmers have little power in the increasingly consolidated meatpacking sector, Politico reported in January 2020 that Tyson Foods, Cargill, Brazilian-owned JBS and Chinese-owned Smithfield Foods —control 66 percent of pork processing in the United States.
Will Smithfield be able to shift the market ready hogs to other slaughtering facilities? Will those processors have the capacity to take more animals? It's part of the efficiencies of confinement farming that a steady stream of animals be moved through the cycle of farrowing, nursery, and finishing barns. Feeding a market-ready hog adds costs to the farmer.
Update, April 13: Minnesota Public Radio's Peter Cox reports in Minnesota farmers to feel fallout from closure of major pork processing plant:
For Minnesota, one of the biggest pork-producing states in the country, the plant plays a significant role in hog farms' sales.
“It would be pure speculation as to what the price impact for farmers is going to be starting this coming week, but I see zero scenario that it’s not negative. It’s just a question of how much,” said David Preisler, CEO of the Minnesota Pork Producers Association. . . .
With fewer processors running at the usual clip, the cycle of raising and selling has also been thrown off. Farmers raise pigs to be a certain weight at a certain time to be ready for market. Not being able to sell hogs at that time can decrease their value, and at a certain point make the animal unsellable.
Preisler said some farmers worry they won’t have anywhere to sell their hogs.
“I think it’s important for people to understand the financial pain that’s occurring. Farmers are really left with a series of bad choices at this point," he said. . . .
At Dakota Free Press, Cory Allen Heidelberger looks one alternative farmers are exploring in Smithfield Warns Shutdown Will Hurt Food Security… So Let’s Grow and Buy Local! [end update]
The Sioux Falls plant recently was updated and expanded, Rob Swenson reported in July 2019's Smithfield: Improvements to Sioux Falls plant are in progress in Sioux Falls Business:
Upgrades at the Smithfield Foods plant in Sioux Falls will help the company meet increasing demand for pork in the United States and the world, according to corporate and industry officials.
Parts of a $45 million plant improvement project announced last December have been completed, and the remaining work is expected to be finished by the end of the year, according to plant manager Mark Wiggs.
Improvements included production-line upgrades designed to increase the output of bacon for U.S. consumption and seasoned ground pork for export.
“These upgrades are complete and currently ramping up production,” Wiggs said. “Renovations to our hog barn and receiving area, which should be completed by the end of 2019, include modern features and design that reflect leading animal-care practices, such as automatic climate-control systems.” . . .
Smithfield Foods’ Sioux Falls plant was built in 1909 and has been part of the area business community for 110 years. Virginia-based Smithfield acquired the plant from John Morrell & Co. in 1995.
In 2013, Smithfield was purchased by WH Group Ltd., then known as the Shuanghui Group or Shineway Group. Smithfield operates as a wholly owned subsidiary of WH Group, which is based in Hong Kong and is the largest pork company in the world.
Smithfield describes itself as a $15 billion food company and the world’s largest pork processor and hog producer. In the United States, products are sold under several brand names, including Smithfield, Nathan’s Famous, Armour, John Morrell, Gwaltney and Curly’s.
The Sioux Falls plant is Smithfield’s second-largest processing facility and the largest producer of packaged meats in the United States, Wiggs said.
The United States produces roughly 25 percent more pork than can be consumed domestically, according to Smithfield. Pork is the most consumed protein in the world, and 95 percent of the world’s population lives outside the U.S.
“U.S. farmers and processors are dependent on healthy export markets around the world. Smithfield is one of a number of U.S. pork processors who export a portion of their production — some of which comes from Sioux Falls — to a diverse set of international markets,” Wiggs said.
“As domestic demand for bacon continues to grow, the company’s investments in high-speed lines in Sioux Falls will increase the volume, yield and quality of our bacon, enhancing our product offering and leading market position,” he said.
Glenn Muller, executive director of the South Dakota Pork Producers Council, said farmers in the region “are thrilled” by improvements being made at Smithfield’s plant.
“The general public and maybe the business community have a perception of the plant being an old, antiquated facility, but I think this demonstrates their willingness to upgrade. The inside of the facility is well maintained and has a lot of the latest technology,” Muller said.
“It’s an integral part of the swine industry to have a harvesting facility in our state,” he said.
Hog production in South Dakota and the region has been growing in recent years. Production has increased at an annual rate of 10 percent to 13 percent for about the past five years, Muller said.
The processing plant is a good example of how the agricultural and business communities need each other and work together, he said. Farmers provide resources, and companies such as Smithfield add processing and marketing expertise.
“They have access to domestic and international markets. That’s critically important as the industry expands,” Muller said. . . .
That worked out well.
For another view of the Smithfield situation, check out Kristi Gets the Whole Story Just by Talking to Smithfield CEO at the unabashed Dakota Free Press.
Related posts:
- We're not New York City: Sioux Fall Smithfield packing plant 4th largest hotspot in United States
- Shared meat-packing workforce: Sioux Falls COVID-19 cluster may have MN community echo
- Governor Walz adds garden center, store workers to critical sector as stay-at-home order extended
Infographic: From the National Pork Board, Life Cycle of a Market Pig.
If you appreciate our posts and original analysis, you can mail contributions (payable to Sally Jo Sorensen, 600 Maple Street, Summit SD 57266) or use the paypal button in the upper right hand corner of this post. Those wishing to make a small ongoing monthly contribution should click on the paypal subscription button.
Or you can contribute via this link to paypal; use email sally.jo.sorensen@gmail.com as recipient.
Comments