Coronavirus forces Tyson Foods to shutter its largest U.S. pork plant

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(Reuters) – Tyson Foods Inc (N:TSN) will indefinitely suspend operations at its largest U.S. pork plant to contain the spread of the coronavirus, the company said on Wednesday, further tightening meat supplies after other major slaughterhouse shutdowns.

The closures are limiting the amount of meat the United States can produce during the outbreak and adding stress on farmers who are losing markets for their pigs.

Lockdowns that aim to stop the spread of the coronavirus have also prevented farmers around the globe from delivering food products to consumers. Millions of laborers cannot get to the fields for harvesting and planting, and there are too few truckers to keep goods moving.

Tyson Foods, the largest U.S. meat supplier, said its largest pork plant in Waterloo, Iowa, was closing after operating at reduced capacity. Plant employees tested positive for the virus, and others stayed home out of fear of becoming infected. The facility slaughters about 19,500 hogs a day, or about 5% of total U.S. pork production, according to industry data.

Brazilian-owned JBS USA [JBS.UL] and WH Group’s Smithfield Foods [SFII.UL] have each indefinitely closed massive pork plants in Minnesota and South Dakota, respectively. Combined, the three shutdowns remove about 15% of U.S. pork production.

“The closure has significant ramifications beyond our company,” said Steve Stouffer, group president of Tyson Fresh Meats. “It means the loss of a vital market outlet for farmers and further contributes to the disruption of the nation’s pork supply.”

Reduced meat output comes as demand has increased at grocery stores while restaurant dining rooms are closed due to the virus.

Tyson said 2,800 workers at the Iowa plant would be compensated during the closure and invited to the facility later this week for coronavirus testing. The outcome of the tests and other factors will determine when the facility will re-open, according to the company.

Other U.S. meat and poultry plants are operating at reduced capacity. Tyson is running a pork plant in Columbus Junction, Iowa, with limited operations after idling it for two weeks.

Iowa farmer Randy Francis delivers 300 pigs to 500 pigs a week to the Waterloo plant for slaughter that are backing up in his barns. He hopes to truck the animals to other plants, but they are already overloaded with other hogs displaced by the shutdowns.

The pigs will put on more weight than normal due to the delays, Francis said. That could make their meat fattier or tougher to chew when they are eventually slaughtered, he said.

“It’s definitely scary times,” Francis said.