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Tyson Pork Plant Suspends Operations Indefinitely

By Jon Quast – Apr 22, 2020 at 10:34AM

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The entire U.S. meat supply chain is strained from the coronavirus.

Tyson Foods (TSN -0.17%) is shutting down operations indefinitely at its largest pork plant, according to a press release from the company. The shutdown at the Iowa facility begins this week, as a response to the COVID-19 pandemic.

Tyson was already operating the plant in a limited capacity as employees opted to stay home to avoid the risk of contracting the coronavirus. But it proved to be too much for the company to keep the plant open.

Pigs on a farm.

Pork processing plants are closing around the U.S. Image source: Getty Images.

An increasing economic risk

The Iowa facility operates under the Tyson Fresh Meats division and employs 2,800 workers. Employees will continue to receive compensation while the plant is closed. But the ramifications extend far beyond Tyson. As Tyson Fresh Meats president Steve Stouffer acknowledged, "...the plant is part of a larger supply chain that includes hundreds of independent farmers, truckers, distributors and customers, including grocers."

Meat is an important consumer staple, and the risk to supply is growing. When processing plants shut down, farmers are left to wonder where to sell their livestock. It's a situation Smithfield Foods CEO Kenneth Sullivan said "is pushing our country perilously close to the edge in terms of our meat supply." Smithfield's pork facility in South Dakota is also indefinitely shut down.

Tyson employees from the plant will be tested for COVID-19 this week. The results from the tests will play a role in deciding when the facility might reopen.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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