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  • Writer's pictureJadon Groves

How meat shortages could impact Americans

Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak with Whole Brain co-founder Dr. William Madden about the food supply chain and President Trump’s executive order to keep meat plants up and running.

Video Transcript

BRIAN SOZZI: Many meat processing plant workers have grown concerned, as these facilities have become coronavirus hotspots. At the same time, President Trump recently signed an executive order demanding these plants to remain open during this crucial time. Joining us to discuss this is co-founder of Whole Brain Consulting Dr. William Madden. Doctor, thanks for joining us here. So was the president right to make this call?

WILLIAM MADDEN: Yes, he was right to make the call. I mean, the surety of the food supply is extremely important. What we would have liked to have seen is those CDC guidelines that were issued become USDA rules and regulations in advance of it. Therefore, it would ensure protection of the employees who are operating in those facilities.

ALEXIS CHRISTOFOROUS: Dr. Madden, do we, as Americans, need to worry about a meat shortage right now, do you think?

WILLIAM MADDEN: Right now there isn't. Exports have been very strong. The facilities have the ability to produce on extended shifts, as well as extra days. I'm pretty sure the USDA would give them clearances to do so. The inspectors are, for the most part, healthy. So the facilities should be up and running.

I wouldn't really be worried, because we have the ability to shut down exports, or curtail them, which have been at records. There's approximately 14 days within the system, which doesn't sound like a lot, but when you're talking about billions of pounds of product-- As well as, you know, the distributors and grocers have their own inventories. So I wouldn't be very worried about it.

ALEXIS CHRISTOFOROUS: You know, Doctor, I'm sure you've seen a lot of the unions, the workers who work in these meat plants, are against what the president is saying. They think they have to go to work in order to bring meat to Americans. Do you think that they have a point there? The fact that they're saying, look, we don't want to have to do this. They're saying unless they feel safe going into work. I'd have to think that that's a basic necessity.

WILLIAM MADDEN: So without the recommendations becoming rules and regulations, there's no obligation on these meat companies to actually implement them. And the unions have been concerned about their employee safety, which they should be obviously with so many getting ill. By forcing the plants to stay open, you've taken a lot of that power away from the unions to be able to negotiate for increased wages. As hog futures have decreased, meat companies should make more money. So without the unions being able to press that forward, it's up to the meat industry to do what's right and protect their employees.

It will be very expensive for them to protect their employees. I mean, for some of those plants, it will be upwards of $5 million a year to get that equipment. So it'll really, really depend on whether the meat industry decides that they need to invest in employee safety. That JBS plant that was shut down is already up and operational again, but they worked with the employees to make sure that they had the proper equipment, the proper social distancing in order for that plant to operate. If they had taken some of the precautions like the advice that we had given bakeries over a month ago, they probably wouldn't have seen the same level of illness that they did within their facilities.

BRIAN SOZZI: Do you think these extra precautions, Doctor, eventually come off? Listen, we have managers, this is what they do. They find ways to cut costs. Or, do you think these changes that are being implemented now, safety changes, are permanent?

WILLIAM MADDEN: I think the social distance-- provided they actually implement these changes, which they're not required to do so. It's a guideline, not a change to rules and regulations by the USDA. So I don't see it being long-term. I see social distancing will, as we exit the virus, social distancing will decrease. The masks, unless they become considerably less expensive, won't be utilized to the level that they should be.

ALEXIS CHRISTOFOROUS: Do you think, Doctor, that the Food and Drug Administration acted quickly enough to help the meat companies and to possibly prevent a shortage in this country?

WILLIAM MADDEN: Yes. I mean, when it comes down to it, when you think about the meat supply, we are no longer eating it at restaurants. We have the ability to curtail exports. And these plants can seek, from the USDA, the ability to run extended shifts. So they should be able to absorb the impact that these temporary shutdowns had. And again, if employees have their safety taken care of, we won't see further shutdowns.

BRIAN SOZZI: All right, let's leave it there. Dr. William Madden, co-founder of Whole Brain Consulting, thanks for taking some time this morning.


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