Smithfield Foods shuts U.S. bacon, ham plants as coronavirus hits meat sector

Smithfield Foods Inc, the world's largest pork processor, said on Wednesday it would shutter two U.S. plants that process bacon and ham, after closing a separate hog slaughterhouse because of an outbreak of the coronavirus among employees.

The latest shutdowns show the domino effect that can occur when the closure of a major slaughterhouse removes raw materials that are turned into food for consumers.

Smithfield, owned by China's WH Group Ltd, is shuttering a plant that processes bacon and sausage in Cudahy, Wisconsin, for two weeks, according to a statement. A facility in Martin City, Missouri, that processes spiral and smoked hams will also close.

The Missouri plant, which employs more than 400 people, processes pork from the Smithfield slaughterhouse in Sioux Falls, South Dakota, that the company closed indefinitely. More than 200 employees became infected with the coronavirus at the South Dakota slaughterhouse, which produces 4% to 5% of the nation's pork.

"Without plants like Sioux Falls running, other further processing facilities like Martin City cannot function," Smithfield Chief Executive Ken Sullivan said in a statement.

Demand for meat at grocery stores has climbed as consumers are staying home to protect themselves from the contagious respiratory virus. Restaurant demand has evaporated as dining rooms have closed.

A small number of employees at the Wisconsin and Missouri facilities have tested positive for COVID-19, the disease caused by the novel coronavirus, according to Smithfield. Both plants are located near areas where "community spread of COVID-19 has been prevalent," the company said.

Such processing facilities are less important to maintaining the U.S. food supply than slaughterhouses, said Steve Meyer, economist for commodity firm Kerns and Associates.

"The key for food supplies is getting animals converted to meat," he said.

Tyson Foods Inc this week extended the closure of a pork slaughterhouse in Columbus Junction, Iowa, that it shuttered last week due to coronavirus cases among employees. Companies like Cargill Inc, JBS USA and National Beef Packing Co have also shut meat plants.

"Our country is blessed with abundant livestock supplies, but our processing facilities are the bottleneck of our food chain," Sullivan said.

By Tom Polansek