Poultry industry struggles with plunging sales, coronavirus deaths

Poultry producers are suffering through plummeting sales as restaurants, schools and other venues close their doors during the coronavirus pandemic.

The industry has also found itself in the same company as pork plants and slaughterhouses that have reported outbreaks and deaths related to the virus.

There are now five coronavirus-related deaths at poultry processing plants, matching the death toll at pork and beef production facilities.

But unlike the other industries, chicken processing plants have largely remained open, with closures being limited to a few days just for cleanings. And there appear to be fewer large-scale outbreaks at plants, though some chicken processors have been reluctant to release figures on how many employees have tested positive.

“I don’t know if it’s just a matter of chance that they’ve seen more cases in the pork plants,” said Mary Muth, a program director and research economist at RTI International, a nonprofit research institute.

Four employees of a Tyson Foods poultry processing plant in Georgia died from the coronavirus earlier this month, but the plant and all poultry plants run by the company remain open. Tyson would not confirm how many employees have tested positive, however.

An employee at a Wayne Farms poultry plant in Alabama died this month, and 75 workers tested positive, but that plant also remains open, ABC News reported.

By contrast, pork processing plants have had more than 660 cases and beef production plants have had more than 100 cases, with activity halted for several days at different facilities, threatening food supply lines.

Some experts say the highly regulated sanitation levels for chicken processing plants, particularly to guard against salmonella, could be contributing to the lower case counts.

“The poultry facilities are super, duper clean and if they were not, they would not be open. They have inspectors on site and people reporting to inspectors,” Brian Ladman, senior scientist in the Department of Animal and Food Sciences at the University of Delaware, told The Hill.

The U.S. Poultry & Egg Association said its members have enhanced sanitation at processing facilities and practice social distancing in common areas.

But some experts say social distancing in those environments is nearly impossible.

“It would be pretty hard to socially distance. Everything is shared facilities. It does raise the concern of will we see more closures over time?” Muth said of chicken processing plants.

Even with plants remaining open, the industry is still struggling to find new markets to balance out the drop-off in sales beyond grocery stores.

The National Chicken Council (NCC), which represents about 95 percent of the chicken produced in the US, including Tyson, Perdue, Sanderson Farms and Pilgrim’s Pride, reported that sales are up for retail but not enough to offset food service losses, which is roughly 50 percent of its market.

The turkey industry is still assessing potential losses in revenue as a result of the pandemic.

“We do know disruptions in food service will have an acute impact on the industry,” said Beth Breeding, vice president of communications and marketing for the National Turkey Federation.

“Turkey processors have been able to keep plants operating without any significant closures while also taking critical steps to ensure the health and wellbeing of workers,” Breeding said.

Experts caution, though, that poultry supply chains aren’t immune to the same problems that have hit other food industries.

“The bottom line is our food chain is not easily redirected. We’re talking long-term contracts in some cases, we’re talking projections,” Ladman said. “So when things are thrown off the rails, we’re kind of stuck. Food is not easily canned or frozen and then stored.”

It’s also not easy for most companies to quickly switch gears and shift food service sales to retail. 

“One of the big issues for plants that produce for food service, in addition to the product not being what consumers are used to buying, they don’t have the packaging they need, they don’t have the labeling that they need, and most importantly, they don’t have the business relationship to redirect that to different sellers,” Muth said.

The Michigan Allied Poultry Industries, which represents 54 family turkey farms and sells 60 percent of turkeys to restaurants and food services, said demand has plunged 70 percent.

“It’s definitely reaching critical levels between diminished demand and falling prices,” said Executive Director Allison Brink.

For those that have established ties with grocery stores, business is good. 

Brian Fairchild, a professor in the University of Georgia’s Poultry Science Department, said Georgia companies he’s spoken to have seen increases in retail sales.

“Restaurant sales are down of course. If they have the materials and capability, the processing plants that can are shifting some of their restaurant product to retail. Currently in Georgia we have been fortunate enough that the companies have been able to run at full capacity as far as I know,” he said. “For now, chicken is moving through the poultry production process close to normal if not at a normal pace in Georgia.”

For producers that are suffering, the federal government could help alleviate some of that pain.

The U.S. Department of Agriculture (USDA) announced a $19 billion relief program last week to help farmers that have experienced at least a 5 percent loss in revenue.

“USDA worked to build up this program from the ground up, evaluating the impacts of COVID-19 throughout the agricultural and food sector and then reviewed the resources we had available to do the best we can with what we have,” a USDA spokesperson said. “As we implement and get applications, we will continue to evaluate impacts and work with Congress as more resources are needed.”

One part of the poultry industry has seen sales spike — direct farm-to-table sales are thriving during the pandemic.

The American Pastured Poultry Producers Association, which represents independent farmers, reported 100 percent to 500 percent increases in sales. 

“The very positive thing that we’ve seen is consumers, as they are unsure about where to get food these days … they’re turning to the farms near them, in their neighborhood, and buying directly from the farmers — eggs and chicken,” Executive Director Mike Badger said. “There’s a real resurgence of that regional commerce going on and interactions happening between the eater and the farm.”

Daniel Salatin, the owner of the Polyface Farms in Virginia, said sales are up about 300 percent. Ten percent of sales have been shipped to homes, 20 percent have been picked up at the farm and 70 percent have been delivered to homes or neighborhood drop-off points.

He credited some of that to news reports of workers at food processing plants falling ill, prompting some customers to want to know more about where their food comes from.

“Our new-customer purchases have exploded for that very reason. We’re doing the best to keep up. We’re not able to necessarily take everybody,” he said.