Amid coronavirus crisis, U.S. shoppers turn chicken into a scarcity

By Tom Polansek

CHICAGO (Reuters) – Major U.S. chicken companies are diverting supplies to grocery stores from restaurants to meet red-hot demand as shoppers, unnerved by worries over the new coronavirus, stock their freezers to the brim as they isolate at home.

In addition to redirecting supplies, some producers are adding shifts to slaughterhouse operations. Even so, speed-ups face one constraint: chickens don’t grow any faster during a crisis.

Perdue Farms and Pilgrim’s Pride said they are shifting chicken meat toward supermarket customers, after states ordered restaurants to shut dining rooms. Sanderson Farms plans to process more chicken for retail customers this weekend.

The companies are aiming to take advantage of frenzied buying and hoarding among shoppers who have picked store shelves clean of products ranging from packages of raw chicken in “tray packs” to pasta.

“Demand right now is a moving target, and we will continue to monitor the need for additional tray pack volume on a daily basis,” Mike Cockrell, Sanderson Farms’ chief financial officer, told Reuters on Wednesday.

At a Mariano’s store in suburban Chicago last Sunday, the refrigerated meat case was cleaned out of chicken. For the latest one-week period ending on March 7, U.S. fresh chicken sales were 4.5% greater in dollars than a year earlier, according to Nielsen data.

Shoppers have favored chicken during the coronavirus crisis in part because it is more affordable and freezes better than other meats, analysts said. Inventories of frozen chicken reached a record high 957.5 million pounds this year, according to the U.S. Department of Agriculture.

Lineage Logistics, the world’s largest refrigerated-storage company, has seen total volumes for its retail segment rise by 20% to 50% globally due to increased demand at grocery stores, Chief Executive Greg Lehmkuhl said. Foodservice business is “drying up very quick as everyone shifts to retail,” he said.

To meet demand, Sanderson Farms on Saturday expects to operate two shifts of employees at its five slaughterhouses that process chicken for grocery stores, the company said. That is up from one shift at each facility a week earlier.

Lincoln Premium Poultry, owned by Costco Wholesale Corp (NASDAQ:), said it does not have enough birds to immediately add chicken to its supply chain. It supplies rotisserie chickens and raw chicken to Costcos in the western United States.

It takes about seven weeks for a bird to grow before it is ready for slaughter.

“We’re doing everything we can to put as much chicken out the door in as fast a way as possible,” Lincoln spokeswoman Jessica Kolterman said. “We only have a certain amount of birds that are ready for harvest each day.”

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