World’s Top Pork Company Closes More Plants in Domino Effect

(Bloomberg) --

Top pork producer Smithfield Foods Inc. is shutting down two more U.S. plants in a decision that underscores the vulnerability of interconnected food supply chains amid the coronavirus pandemic.

Three days after saying it would close its giant Sioux Falls slaughterhouse in South Dakota because of an outbreak among workers, the company said it plans to shut its Cudahy plant in Wisconsin and its Martin City facility in Missouri later this week.

Cudahy, which makes dry sausage and bacon, will be down for two weeks. Martin City gets its raw materials for making hams from Sioux Falls, meaning its resumption is dependent on the slaughterhouse coming back on line. On Thursday, Tyson Foods Inc. confirmed two deaths among its workforce at the Columbus Junction pork plant in Iowa, which remains idle after closing April 6.

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While livestock supplies in America are abundant, the spread of the virus to processing plants, whose staff work in close quarters, is creating a bottleneck in the food chain. That poses a dilemma for companies and authorities who have to balance workplace health with food security, and for farmers left without a market for their animals. Hog futures are trading near three-year lows.

“The closure of our Martin City plant is part of the domino effect underway in our industry,” Chief Executive Officer Kenneth M. Sullivan said in a statement. “It highlights the interdependence and interconnectivity of our food supply chain.”

Smithfield said “a small number” of employees at both Cudahy and Martin City have tested positive for Covid-19. Staff will be paid for the next two weeks.

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