Market News & Headlines >> Trump Set to Order Slaughter Plants to Stay Open
President Trump plans to order meat-processing plants to remain open, declaring them critical infrastructure as the nation confronts growing disruptions to its food supply, Bloomberg reported on Tuesday morning, citing a person familiar with the matter.
Trump plans to use the Defense Production Act to order the companies to stay open, and the government will provide additional protective gear for employees as well as guidance, the person told Bloomberg.
Trump signaled the executive action at the White House on Tuesday, saying he planned to sign an order aimed at Tyson Foods Inc.’s liability, which had become “a roadblock” for the company. He didn’t elaborate. The order, though, will not be limited to Tyson, the person said. It will affect all processing plants supplying beef, chicken, eggs and pork.
This news comes after Bloomberg reported on Monday that Iowa Governor Kim Reynolds and Senators Joni Ernst and Chuck Grassley asked for additional measures to help livestock producers, including invoking the Defense Production Act, to keep Iowa pork production viable amid the coronavirus pandemic. Action is required to “ensure that safe, affordable and abundant food remains available in this crisis,” they said in letter to Vice President Mike Pence and members of the coronavirus task force.
The White House decided to make the move amid estimates that as much as 80% of the U.S. production capacity could shut down. Lack of slaughter capacity has left many livestock producers with nowhere to market their animals. Hog producers have already been forced to euthanize pigs, while some broiler chicken producers have also euthanized stock and have been breaking eggs to limit supplies.
A recently announced $19 billion U.S. government coronavirus aid package for farmers will not pay for livestock that are culled, according to the American Farm Bureau Federation, Reuters reports. USDA said in a statement the payment program is still being developed and the agency has received more requests for assistance than it has money to handle.
Meanwhile, wholesale beef and pork prices have been soaring amid reduced production. The choice beef cutout has already hit record highs four straight days and was up sharply again on Tuesday morning at $326.88 per hundredweight. The composite pork cutout has rebounded from a multi-year low in early April to the highest level since November at $87.35 at midmorning on Tuesday.