Slaughterhouses starting to close: Hayes

April 15, 2020

Dr. Dermot HayesDermot Hayes, professor, was quoted in several recent media outlets about slaughterhouse closings:

April 13 Bloomberg story, "Slaughterhouses That Supply America's Meat Are Starting to Close."

The problem for farmers is they have nowhere to keep surplus hogs that don’t make it to slaughter, said Dermot Hayes, an Iowa State University economics professor who likened the plant closures to “putting a barrier on the exit of an elevator that is full of people.”

April 13 WHOTV story, "Virus closes some meat plants, raising fears of shortages."

“It’s like people on an escalator. Stopping the pork chain at the top of an escalator is just going to cause all sorts of tragedy and disaster all the way back up the system,” said Dermot Hayes, professor of economics and finance at Iowa State University.

Farmers are being forced to kill baby pigs because the space in the barns where they were supposed to go is still filled by the pigs that should have been slaughtered last week, Hayes said. The meat from those baby pigs cannot be sold.

April 13 New York Times story "Virus Closes Some Meat Plants, Raising Fears of Shortages."

That has driven prices for those feeder pigs — which generally are fattened over the course of six months — to zero, Hayes said. The value of those big enough for the market is down about 50% from a month ago. The value of the meat is down about 30%. That has driven prices for those feeder pigs - which generally are fattened over the course of six months - to zero, Hayes said. 

This story also covered by

Daily Mail, April 14
Philadelphia Inquirer, April 14

April 15 Beef story, "COVID-19: The economic blood bath for ag continues."
Meanwhile, in the pork industry, the National Pork Producers Council reports, “Dr. Dermot Hayes, an economist with Iowa State University, and Dr. Steve Meyer, a pork industry economist with Kerns & Associates, estimate that hog farmers will lose nearly $37 per hog, or almost $5 billion collectively, for each hog marketed for the rest of the year. Prior to the COVID-19 crisis, and after two challenging years, hog farmers were generally expecting a profitable year, with industry analysts forecasting earnings of approximately $10 per hog on average for 2020.”

April 15 USA Today story, "Tyson Foods processing plant in rural Iowa hit hard by coronavirus with 186 positive cases."

“The whole system is gummed up,” Iowa State University agricultural economist Dermot Hayes said. “It’s not just the farm and the packer. It’s all along the chain.” 

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