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story.lead_photo.caption FILE - This Aug. 11, 2017 file photo shows a Wendy's sign at a restaurant in Miami. U.S. meat supplies are dwindling due to coronavirus-related production shutdowns. As a result, some stores like Costco and restaurants like Wendy's are limiting sales. U.S. beef and pork processing capacity is down 40% from last year. On Monday, May 4, 2020 nearly 20% of U.S. Wendy's didn't have beef available on their online menus, according to an analysis by Stephens, an investment bank. Wendy's confirms it's seeing temporary shortages. (AP Photo/Alan Diaz, file)

Hundreds of Wendy's restaurants have run out of hamburger. Kroger, the largest supermarket chain in the United States, is limiting the amount of ground beef and pork that customers can buy at some stores. And Costco, where shoppers typically buy in bulk, has placed a three-product cap on purchases of fresh beef, poultry and pork.

As of Monday, U.S. beef and pork processing capacity was down 40% from last year, according to Jayson Lusk, head of the department of agricultural economics at Purdue University. Multiple U.S. meatpacking facilities have closed in the past two weeks because of coronavirus outbreaks among workers.

President Donald Trump issued an executive order last week requiring meatpacking plants to stay open, and some are gradually getting back on line. In the meantime, consumers will likely see some shortages and higher prices for beef and pork, Lusk said. Poultry production has also been affected, but to a lesser degree.

About 1,000 Wendy's restaurants -- or nearly 20% -- had no beef items available on their online menus Monday night, according to an analysis by Stephens Inc., the Arkansas-based investment bank. Stephens analyst James Rutherford said some states, like Ohio, Michigan and New York, seemed to be affected more than others.

On social media, customers posted photographs of "sold out" signs at Wendy's drive-thrus and noted the irony of a hamburger shortage at a chain that popularized the slogan "where's the beef?"

Wendy's said some menu items may be temporarily limited, but it continues to supply its restaurants with beef two to three times a week. The company said it's trying to limit disruptions to its supplies.

The effect on the fast-food industry has been uneven. McDonald's said Tuesday that it had not experienced any beef shortages. But Shake Shack executives warned this week that the price of beef had "significantly increased."

"We do not, today, expect a supply issue," Shake Shack Chief Executive Officer Randy Garutti said during an earnings call Monday. "However, costs have really jumped."

Wendy's reliance on fresh beef -- a major selling point for the brand -- may make it more vulnerable to shortages than some rivals.

"It impacts them more quickly, as opposed to some restaurants that have a little bit more frozen options on the menu," Rutherford said.

The report also found geographic differences in how significantly Wendy's was affected by the shortages. In some states, including New York, Connecticut, Ohio and Michigan, 30% or more of the chain's restaurants were out of beef, whereas other states like Nevada and Arizona did not have any shortages.

EARLY WARNING

Food industry executives have warned of looming supply issues since April, when outbreaks at some of the country's largest meatpacking plants brought production to a halt.

In a call with investors Monday, Tyson executives said more meatpacking plants were likely to shut down for cleaning as the virus continues to spread.

Costco, Sam's Club, Hy-Vee and Kroger are limiting purchases of meat to avoid panic buying. Kroger Co., which also owns Ralphs and Harris Teeter markets, said it wants to ensure that buyers have a broad assortment. Kroger is limiting purchases of only ground beef and fresh pork for now.

"There is plenty of protein in the supply chain. However, some processors are experiencing challenges," Kroger said in a statement.

At a Costco in the Minneapolis suburb of St. Louis Park, empty and underfilled coolers greeted shoppers in the meat department Tuesday morning, one day after the retailer started limiting fresh meat purchases to three items per customer.

There was a crowd in the meat department. While there was a large supply of organic ground beef in one cooler, several cuts of beef and pork appeared to be in short supply judging from the coolers that were empty.

FAUX MEAT BOOST

Some makers of alternative proteins see an opening.

Under a new agreement, Kroger will sell the Impossible Foods plant-based burger in more than 1,700 of its stores nationwide, a dramatic increase in its retail presence as artificial meat gains wider acceptance.

The rollout, which will take the products to Kroger stores in 28 states as well as the company's website, represents an 18-fold increase in the burger-maker's retail presence, Impossible Foods said Tuesday in a statement.

Impossible Burger, the faux-meat company's signature product, has become one of the most popular items of its kind. It's now found on Burger King menus, college campuses and Disney theme parks nationwide.

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Yet it had struggled to gain a foothold in supermarkets because of additional regulatory steps with the U.S. Food and Drug Administration for use of a novel genetically modified ingredient known as soy leghemoglobin. That late start has given competitors such as Beyond Meat Inc., which has broader retail distribution, an advantage during the pandemic, which has brought restaurants to a grinding halt and driven higher demand for groceries.

Information for this article was contributed by Dee-Ann Durbin, Amy Forliti and Steve Karnowski of The Associated Press; by David Yaffe-Bellany and Michael Corkery of The New York Times; and by Deena Shanker of Bloomberg News.

Business on 05/06/2020

Print Headline: Stores, eateries see meat shortages

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