Virus Supply Chain Impacts Are Leaving US Meat Stockpiles

With Chinese exports disrupted due to virus safety measures and suddenly slashed product demand, US cold storage facilities are filling up on overstocked inventory.

I Stock 1137893265

The ongoing coronavirus outbreak has disrupted global supply chains in virtually all industries, and the meat market is certainly feeling the effects.

The Wall Street Journal reported Tuesday that the virus has resulted in cold-storage facilities remaining filled with meat products intended for export to China, where American companies typically count on big orders. The WSJ cites US Department of Agriculture data that shows the amount of chicken in US cold storage facilities rose by 12 percent in January to 957.5 million pounds — a record for that month. Meanwhile, the amount of stored pork rose 11 percent compared to January 2019, and the WSJ notes that meat executives expect that those inventories have likely grown since.

“The cold storages we deal with are all busting at the seams,” Sanderson Farms CEO Joe Sanderson told the WSJ on a conference call last week.

US pork producers saw trade tension relief when China lifted restrictions on US pork imports amid a swine disease that wiped out hundreds of millions of hogs, leading to a surge in US meat exports to China to end 2019. USDA figures show that such exports to China during November and December were more than all the US had in 2018.

The coronavirus (COVID 19), which began spreading in the large Chinese city of Wuhan in December, has infected more than 90,000 people and claimed 3,100 lives globally as of Tuesday morning. Safety measures have resulted in swaths of Chinese consumers staying home instead of eating out — either by choice or by quarantine enforcement — slowing meat consumption in the country of 1.4 billion people.

The WSJ noted that Tyson Foods CEO Noel White said, “The ports are basically backed up,” at a February investor event, adding that Sanderson Farms executives said four ships loaded with the company’s chicken were diverted from their Chinese destinations in recent weeks, though all eventually landed.

Read the WSJ’s full report here.

More in Supply Chain