This article was originally published on ETFTrends.com.
With coronavirus having closed more than 3000 retail stores across the country, and shortages in a number of goods such as toilet paper affecting consumers confined to their homes as quarantines and stay-at-home orders stymie are in place to prevent the spread of coronavirus cases and deaths, now it seems the food supply may be affected as well.
Tyson Foods warned the New York Times and several other publications on Sunday that, “the food supply chain is breaking.”
“As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain,” John Tyson, Chairman of the Board of Tyson Foods, wrote in a letter published as an advertisement. “As a result, there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed.”
The world's second largest processor and marketer of chicken, beef, and pork after JBS S.A. says the squandering of food is also a threat, as “farmers across the nation simply will not have anywhere to sell their livestock to be processed, when they could have fed the nation.”
“Millions of animals —chickens, pigs and cattle— will be depopulated because of the closure of our processing facilities,” Tyson writes. “The food supply chain is breaking.”
A spokesperson with the U.S. Department of Agriculture (USDA) explained in an email to publications that the USDA, in conjunction with the U.S. Food and Drug Administration and Centers for Disease Control and Prevention, will work to “ensure the food supply chain remains safe and secure.”
“At the moment, our other plants remain open and we are working hard to keep store shelves filled, however our facilities are running at reduced levels of production, and any additional shutdowns will further stretch an already strained food supply system—but if it is the right decision to shut down more facilities, we will do so,” the statement said.
Tyson's announcement is not the first notice to disrupt the meat industry, and potentially the U.S. food supply.
JBS, one of the largest meat processing companies in the world, shuttered several of its U.S. facilities in response to COVID-19 outbreaks, the most recent of which temporarily terminated operations just this weekend, according to Bloomberg. And Smithfield Foods, the largest pork processor in the nation, closed its Sioux Falls plant after hundreds of its employees tested positive for COVID-19. The president and CEO warned of “severe, perhaps disastrous” consequences from the closures.
Despite the warning to consumers, Tyson's stock is making some gains today, up 1.61%. Food industry ETFs like the IQ Global Resources ETF (GRES) and the First Trust Nasdaq Food & Beverage ETF (FTXG), which have larger allocations of the stock are also green on Monday.
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