The pandemic has exposed and worsened deep-seated problems in a meat industry dominated by huge producers
Huanjia Zhang • January 11, 2021
The U.S. meat industry is dominated by four giant food companies, leaving small farmers and processors struggling to get by. The pandemic has made the situation even worse. [Credit: UGA CAES/Extension | CC BY 2.0]
On a typical kill day, rancher Michael Kovach wakes up at 5 a.m. and loads 22 turkeys and about 200 broiler chickens onto his trailer. At the crack of dawn, every few weeks, he hauls the birds 120 miles from his farm in Sharpsville, Pennsylvania to the nearest poultry processing plant in Baltic, Ohio. The trip takes two and a half hours each way, but Kovach has no alternative — other than just giving up.
“My backup at this point is to not raise poultry,” says Kovach, who worries that his poultry processor might have to close down if there’s a coronavirus outbreak. As is, he’s already operating a slim profit margin as a small operator: he currently raises about 70 cows, 20 sheep, 200 turkeys and batches of 300 chickens — far less than industrial-scale competitors that raise thousands of cows or tens of thousands of birds at once. Although the red meat butcher is closer to him than the poultry processor, it is still half an hour away.
Across the country, small meat producers are in the same leaky boat as Kovach. After decades of consolidation, the meat industry in the U.S. has succumbed to a go big or go home model. Fifty meat-processing facilities slaughter and process roughly 98% of all beef in the country, and the “big four” meat companies now dominate more than 80% of the U.S. beef market. This amalgamation has left many mom-and-pop farms struggling to raise, slaughter and sell their products.
The pandemic has made the situation even worse. After COVID-19 struck, many big meat processors had to shut down due to outbreaks within their facilities, shifting the burden of meat processing to smaller slaughterhouses. This, in turn, has made it even harder for small farmers like Kovach to find places to process their animals. Because farming is a time-sensitive business, not being able to slaughter their animals in time not only means ranchers have to pay for extra feed, but also leads to some animals growing too big to be slaughtered. For this reason, in late spring, hog farmers nationwide were forced to euthanize millions of pigs, while scores of Americans were struggling to find enough meat on the shelf.
“Everybody eats, and it becomes glaringly obvious that the system that we rely on to do that is very fallible and on very shaky ground,” says Kovach, who serves as vice president of the Pennsylvania Farmers Union and spoke at an Oct. 30 webinar in 2020 discussing the persistent roadblocks small meat farmers and processors face.
“The pandemic certainly exposed a weakness in the [meat] supply chain,” agrees Sara Nicholas of Pasa Sustainable Agriculture, the Pennsylvania-based sustainable agriculture association that organized the webinar.
The shortage of slaughterhouses is not only hurting farmers but also inundating those processing facilities that are still operating during the pandemic. “We are going as fast as we can, and it is draining everybody,” says Jay Young, a meat processor who also spoke at the webinar. Young owns and operates a small meat processing plant in Spring Mills, Pennsylvania, which can typically handle no more than eight or nine cows per day.
For the first time in the eight years since Young established his plant, processing slots are now booked almost a year in advance. To accommodate as many farmers within the community as he can, Young has no choice but to ration how many animals to process per farmer. “We become an impediment to getting [farmers’] products to market,” he says. “It is heartbreaking.”
Small farmers and meat processors across the U.S. are both desperate for more meat processing plants to ease the situation. However, getting more slaughterhouses up and running is not a simple task. To start, establishing a meat processing plant is costly. Although costs can vary depending on the type of plant, the Niche Meat Processor Assistance Network estimated that it costs about $2.4 million to establish a USDA-inspected facility that can process around 30 animals a week and employ about 10 full-time employees.
Even if butchers can raise enough money, they often have difficulties navigating the myriad laws and regulations. “Sometimes, regulations are written for the largest companies overall, especially in the meat and poultry sector,” says Kelly Nuckolls, a policy specialist at the National Sustainable Agriculture Coalition.
The Wholesome Meat Act of 1967 states that only slaughterhouses inspected by the USDA or by state inspection programs that are “at least equal to” federal standards can process meat products sold commercially across state lines. Although this law’s intended purpose was to create a national meat inspection standard, it jeopardized small slaughterhouses that don’t have enough money to upgrade their infrastructure to comply with the law, according to a 1971 congressional study.
The cost of USDA inspection can also be a burden for smaller slaughterhouses. Generally, the USDA pays its inspectors up to 40 hours a week, but the plants are responsible for paying the inspectors’ overtime fee, which starts at $103 per hour for meat inspection. It is common for meat processing plants — large and small — to operate on overtime, but smaller facilities have fewer customers to average out the inspection cost, making their prices less competitive than the big industrial plants.
The cost of USDA inspection has become even more burdensome for small butcheries during the pandemic, when meat processors are working around the clock to supply the market safely. To that end, in May, Sens. Jerry Moran, R-Kan., and Michael Bennet, D-Colo., introduced legislation to exempt meat processors from USDA overtime inspection charges.
“During this pandemic, it is necessary we remove cost-prohibitive barriers so our packers can keep working, ranchers can harvest their livestock and Americans can have access to quality food,” says Moran in a press release. So far, however, Congress has not passed the bill.
In addition to the roadblock caused by inspection, the Farm Bill — the primary agricultural policy guide for the federal government, which is updated every five or so years — has also been favoring large agricultural businesses and encouraging consolidations, says Nicholas. From 1995 to 2020, the top 10% of recipients of the Farm Bill’s commodity subsidies — big agri-business operations — received 78% of the total payment, according to the Environmental Working Group, an environmental nonprofit organization based in Washington, D.C.
For this reason, small meat farmers and butchers are urging that the state and federal governments step up and help. They are hoping that the federal government can enforce existing antitrust laws to prevent big meat-processing companies from encroaching on small meat processors and price-fixing, The Counter reports.
Butchers like Young are also hoping that the government can encourage new meat processing businesses while supporting the existing facilities, by providing more funding and offering assistance in training skilled butchers.
The lack of skilled butchers, according to Young, has become a key limiting factor for the small meat-processing industry to expand its capacity. “Let’s support mentoring education programs, let’s get people into this industry and not be treated as second class,” he says. “Butchers should walk around the community as proud members.”
In addition to lawmakers and the government, consumers, too, are crucial for rescuing the meat industry, says Kovach. When people buy meat products from local producers instead of the pre-packaged meat from a grocery store, he says, they also support small ranchers and processors like him and Young and help to shift business back from big meat producers.
“The most important part is the consumer,” says Kovach. “We get to cast a vote three times a day with our fork.”