U.S. hog and cattle futures tumbled as more slaughterhouse shutdowns heaped further pain on livestock farmers and raised the risk that consumers may face a fresh-meat shortage.

Smithfield Foods said Sunday it will idle its Sioux Falls, South Dakota, pork-processing facility, which accounts for 4% to 5% of U.S. production. The move comes amid a spike in covid-19 infections that’s forced some plants to shutter or reduce output.

“This is going to cause a serious backlog in animals,” said Dennis Smith, senior account executive at Archer Financial Services. “The worst fears in the industry are now becoming reality.”

While the U.S. hog herd is bigger than ever, and there’s plenty of meat in cold storage, extended slaughtering disruptions could leave retailers without fresh supplies to stock meat cases, and farmers without a market for their animals.

Smithfield, which is closing the facility until authorities clear it to reopen, said it would be impossible to keep stores stocked if plants aren’t running.

Production of meat is already slowing in the U.S. In the week ended April 11, pork output of 518 million pounds dropped by 6% from the previous week, while beef production of 444 million pounds slumped by nearly 15%, U.S. Department of Agriculture data showed.


The closure in South Dakota adds to virus-related disruptions elsewhere in the food supply chain, including a Tyson Foods pork plant in Iowa and a JBS beef plant in Pennsylvania. Two workers at a Georgia poultry plant died from the virus. Disruptions for ports and trucks have also impeded shipments of food and other goods.

The risk of further interruptions is particularly high for the U.S. pork industry, with farmers raising pigs in a relatively concentrated area in the western half of the Midwest.

“You have 20 plants that account for 70% of capacity,” Altin Kalo, analyst at Steiner Consulting Group, said by telephone.

Some plants relying on fresh pork that’s not frozen might have some shortages, he said. Closures would also force farmers, many of whom supply hogs on a contract basis, to scramble for another market.

“The ones you really feel sorry for are the producers,” Kalo said.

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