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Agriculture Secretary Says ‘Plenty of Food’ Despite Disruptions

Agriculture Secretary Says ‘Plenty of Food’ Despite Disruptions

(Bloomberg) -- Agriculture Secretary Sonny Perdue assured Americans the country has “plenty of food” after coronavirus closings at major meat-processing plants focused fresh attention to strains in the supply chain.

“The bare store shelves that you may see in some cities in the country are a demand issue and not a supply issue,” Perdue said Wednesday at a White House briefing with President Donald Trump. “It has taken us a few days” for food companies to address a “misalignment” in distribution as restaurants close and more food is sold through grocery stores.

Agriculture Secretary Says ‘Plenty of Food’ Despite Disruptions

The shutdown Sunday of one of America’s largest pork-processing facilities drew fresh attention to disruptions in food supplies during the coronavirus lockdown. Shoppers at times have already experienced shortages of staples such as eggs, milk and toilet paper.

The Smithfield Foods plant in Sioux Falls, South Dakota, shut down after hundreds of workers fell ill with coronavirus. A day later, a massive beef-processing facility in Colorado said it’s winding down operations. Smithfield announced Wednesday that two smaller meat-processing facilities were closing.

The entire food supply chain has been hit with unprecedented disruption as companies shift to supplying supermarkets rather than restaurants and other food-service operations. That entails different packaging, as well as change in the mix of food. Perdue compared the shortages that have cropped up to traffic jams on interstates when car collisions temporarily slow movement.

“We’re working through that,” Perdue said.

Dairy farmers are dumping milk after a drop in sales of cheese and butter, more often eaten in restaurants. Pork prices have plunged along with bacon sales, and produce growers are letting some fruits and vegetables rot.

Refrigerated inventories of meat remain robust across the U.S. and most plants remain open. But the virus, which has now infected hundreds of meat-plant workers in the region, is spreading -- and the prospect of prolonged shutdowns has the head of Smithfield, the world’s top pork producer, warning America is “perilously close” to a shortfall.

U.S. pork output was already falling last week and so was beef production. In the case of pork, 8% of capacity may now be down because of the pandemic, according to Kerns & Associates.

Shortages are possible down the line but unlikely now, said Joshua Specht, a visiting assistant professor at the University of Notre Dame. “As far as an absolute shortage, the pandemic would have to shift into some of the more grim forecasts, which is certainly possible, but at this point it’s hard to say.”

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