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Meat and migrants
Story Date: 1/17/2022
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Source: UC DAVIS RURAL MIGRATION NEWS, Jan. 2022
Cattle farmers complained throughout 2021 that they lost money while meatpackers made record profits. Four firms process 85 percent of US beef, four firms control 70 percent of pork processing, and four firms control 55 percent of poultry processing.
Critics complain that consolidation in meatpacking allows meatpackers to reduce the prices they pay to farmers for live cattle to 33 percent of the average retail price of beef in 2021 and to 20 percent of the average retail price of pork. In the 1970s, the farm share of retail beef prices was about 60 percent, and they received 50 percent of retail pork prices.
Most beef farmers are cow and calf operations that raise calves until they are old enough to be sold to feed lots before being slaughtered. The feed lots, concentrated in Texas, Nebraska, Kansas and Colorado, allegedly reduce the price they pay to farmers for calves to satisfy meatpackers seeking low-cost animals. Meatpackers have private contracts with major feedlots that set prices based on what happens in public auctions that deal with ever fewer cattle, making it difficult to know exactly what meatpackers pay for fattened cattle.
President Biden in January 2022 made $100 million in grants and loans from the American Rescue Plan available to small meat processors to increase competition between meatpackers for farmers’ cattle in a bid to narrow the gap between the farm and retail price of meat. Critics argued that, just as the Trump administration turned to tariffs to deal with economic problems, the Biden administration is turning to anti-trust.
Covid. Animal slaughtering and processing (NAICS 3116) employed an average 529,000 workers in 2020. Employment declined from 514,000 in 2001 to a low of 481,000 in 2013-14 before rising 10 percent by 2020. Average weekly wages rose from $500 in 2001 to $911 in 2020, and were up over 10 percent between 2019 and 2020. By contrast, average weekly wages rose only 11 percent over the five-year period between 2006 and 2011.
Poultry processing (NAICS 311615) employment averaged 240,000 workers in 2020, 45 percent of employment in meatpacking. Like overall meat sector employment, poultry employment fell from 242,000 in 2001 to a low of 220,000 in 2013, and rose nine percent by 2020. Poultry weekly wages rose from $425 in 2001 to $761 in 2020, and were up eight percent between 2019 and 2020. Between 2006 and 2011, poultry wages rose nine percent.
The House Select Subcommittee on the Coronavirus Crisis in October 2021 reported that 59,000 meatpacking workers contracted covid in 11 months of 2020-21, more than twice the previous 23,000 estimate. The data were from five major meatpackers, JBS USA, Tyson Foods, Smithfield Foods, Cargill and National Beef. The meatpackers countered that they spent heavily to prevent the outbreak and spread of covid among their employees.
Half or more of employees contracted covid in some plants, including at a JBS plant in Hyrum, Utah, plant and Tyson’s Amarillo, Texas plant. Some meatpackers complained of too few workers throughout 2021. FPL in Georgia said that absenteeism averaged 20 percent in 2021 despite a starting wage of $15, forcing FPL to decide each day which dis-assembly lines to operate.
Tyson earned $3 billion in profits in 2021, and in December 2021 announced that it would give its 80,000 hourly workers year-end bonuses of $300 to $700. Tyson’s average labor costs were $24 an hour for wages, payroll taxes and benefits at the end of 2021.
Tyson announced that it would spend over $400 million a year to increase automation in its meat plants, beginning with machines that can debone chicken. Tyson processed 37 million chickens a week in 2021, which was only 80 percent of capacity due to too few workers. Tyson believes that the semi-automated dis-assembly lines in nine new chicken processing plants will allow the company to process 50 million chickens a week by 2025.
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