The meat processing industry in Ireland has come under the spotlight because of clusters of COVID-19 being identified in a number of locations. Employers have a legal obligation to provide a safe working environment but while the industry has introduced a range of measures to make the working environment safer, it cannot eliminate the risk of COVID-19 completely, other than by ceasing production. This has happened at the Dawn Meats factory in Kilbeggan but factories elsewhere, across all species, have continued operating though at a reduced capacity because of measures taken to minimise risk.

COVID-19 in Irish factories

Over the past two months, there have been 828 cases of COVID-19 in Irish meat factories, according to HSE figures. Meat Industry Ireland says that “496 of those who tested positive have gone through the appropriate self-isolation, recovered and are back at work”.

Pigmeat processing has come under most pressure because it has a constant cycle of pigs coming through

There has been some impact on factory throughput. Pigmeat processing has come under most pressure because it has a constant cycle of pigs coming through, whereas beef and lamb are more seasonal and, in the case of beef, this is the time of year when factory kills are lowest.

Factory precautions include the removal of vulnerable people, usually employees over 60, as well as those with existing medical conditions. Employees have routine temperature checks and if anyone is displaying symptoms, they are removed.

Face masks are used where it isn’t practical to have screens, such as in the packing area of factories

Working procedures have been changed to establish a 2m spacing, and where that isn’t possible screens are used – similar to what many consumer-facing businesses have put in place. Face masks are used where it isn’t practical to have screens, such as in the packing area of factories.

Factories also put cohorts or pods of people working together who travel or live together. This is particularly important as many meat factory employees are migrant workers who work, travel and live together in shared accommodation and guidelines to reflect this have been issued by the national outbreak control team.

US experience

In the US, there were 4,913 workers in 115 meat plants with COVID-19. There were 20 fatalities at the start of May, according to the Centers for Disease control and Prevention (CDC), and this has increased significantly since.

Despite some improvement in recent days, US processing of beef and pigs has been reduced by one-third over the past month.

Last week, the US cattle kill was estimated by USDA at 499,000, an increase from 452,000 the previous week, but well down on the 662,000 processed in the same week last year.

There has been a significant welfare issue in the US

It is a similar picture with pigs where there was a recovery last week to 1.775m compared with 1,549m the previous week. This is still well down on the 2.352m figure in the same week in 2019.

There has been a significant welfare issue in the US, with pigs having to be euthanised simply because there wasn’t enough processing capacity available.

US prices

This is also reflected in price which has plummeted to half the value of this time last year at an average of €33.98 per pig. Cattle prices fell from the equivalent of €4.02/kg at the end of January to the equivalent of €3.12kg by the start of May, before recovering to the equivalent of €3.63/kg by last weekend.

The loss of processing capacity doesn’t have as an immediate impact on cattle as on pigs because their entry to the factory can be delayed.

Import prices are also running over €1/kg more than at the start of the year for lean forequarter beef used in the making of burgers

Scarcity has caused the creation of a huge bubble in the value of boneless beef where the boxed beef cut-out average jumped 40c/kg on the previous week to the equivalent of €8.52/kg compared with €4.39/kg in the same week in 2019.

Import prices are also running over €1/kg more than at the start of the year for lean forequarter beef used in the making of burgers.

Interestingly, Brazil has started supplying the US with beef again, with 57t coming in during the week ending 9 May and Argentina is also ramping up exports to the US, with 610t coming in that week whereas the intake from Ireland was particularly low at 26t that week.

Opportunity

The disruption to the supply of US beef, along with companies prioritising domestic supply over exports, could create some interesting opportunities in Asian markets.

Chinese demand continues to surge with Brazilian beef exports to the end of April

It will be interesting to see if Irish beef exports could start gaining a meaningful presence in Japan as there was a further tariff reduction at the start of April and 323t of Irish beef were imported in March.

Similarly, Chinese demand continues to surge with Brazilian beef exports to the end of April up to 203,000t, more than double what was then a record 96,000t in the same period last year, according to Government export data.