April 20, 2020 / 4:57 PM / 3 months ago

JBS shuts U.S. pork plant, Cargill idles Canadian beef plant on coronavirus

CHICAGO/OTTAWA (Reuters) - JBS USA said on Monday it would indefinitely shut a hog slaughterhouse that produces about 5% of U.S. pork, while Cargill Ltd said it was temporarily idling a Canadian beef-processing plant in the latest disruptions to the North American food supply chain from the coronavirus pandemic.

JBS (JBSS3.SA) said it is closing a pork production facility in Worthington, Minnesota, that employs more than 2,000 workers and processes 20,000 hogs per day. It advised plant employees to follow a state order to stay at home to prevent the spread of the coronavirus, until the facility in Nobles County reopens.

“It is clear that the disease is far more widespread across the U.S. and in our county than official estimates indicate based on limited testing,” Bob Krebs, president of JBS USA Pork, said in a statement.

The Canadian arm of U.S. agribusiness Cargill Ltd CARG.UL. said in a statement it had started to temporarily idle its beef-processing plant in the community of High River in the province of Alberta because of an outbreak of COVID-19 and encouraged its staff to get tested for the respiratory virus as soon as possible.

Cargill did not say when operations would resume at the beef plant, which produces patties for McDonald’s Corp (MCD.N) and accounts for about 36% of total Canadian processing capacity, according to industry data.

The JBS closure limits the amount of meat the United States can produce for consumers during the outbreak and adds stress on farmers who are losing a market for their pigs.

The U.S. government has deemed agricultural workers to be essential during the pandemic because they are responsible for maintaining the country’s food supply. The Worthington facility will wind down operations over the next two days with a reduced staff so pork that is already in the facility can be “used to support the food supply,” Brazilian-owned JBS (JBSS3.SA) said.

Rivals Tyson Foods Inc (TSN.N) and WH Group Ltd’s (0288.HK) Smithfield Foods [SFII.UL] have already closed pork plants due to outbreaks of the contagious respiratory virus among employees. JBS and National Beef Packing Company [NBEEF.UL] have shut beef plants.

Meat companies have struggled as workers have stayed home out of fear of contracting the virus at plants, despite efforts by processors to promote social distancing.

“When COVID-19 is prevalent in the community, fear is heightened, absenteeism rises and the challenge of keeping the virus out becomes greater,” JBS said. “When absenteeism levels become too high, facilities cannot safely operate.”

Reporting by Tom Polansek in Chicago and Kelsey Johnson in Ottawa; Editing by Tom Brown and Leslie Adler

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