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Supply Chain, Broken: SDPB Investigates

The Smithfield pork plant in Sioux Falls.

In March, South Dakota’s first case of COVID-19 was confirmed by the Department of Health. In those early days of the pandemic, South Dakotans kept a wary eye on news of overwhelmed ICUs and emergency departments in cities like New York and Detroit. Governor Kristi Noem called for the closure of school buildings. Local hospitals scrambled to prepare for a potential surge of coronavirus disease in South Dakota.

For the first time, many Americans thought deeply about the capacity of our healthcare system and the inadequacies and politics of the federal stockpile of ventilators and personal protective equipment for healthcare workers. We found the system to be inadequate to the challenge of the pandemic at hand.

Fast forward to mid-April, when the Smithfield pork processing plant became the center for a new drama.

Before the dust settled, more than 840 Smithfield workers and their close contacts would fall ill. The plant would close as it became the largest cluster of COVID-19 cases in the nation. Two employees have died from the disease.

Today, most of the Smithfield families have recovered. The plant has reopened. Other processing plants and factories are working to contain other outbreaks of Sars-CoV-2.

Of course, that’s not the whole story. When the Smithfield plant shuttered, hog producers had nowhere to take their animals to slaughter. Those animals kept growing, kept gaining weight. Hogs and cattle and chickens don’t slow down just because the system has a glitch.

Within days, producers were faced with the unthinkable: What to do with hundreds of animals, all because of the temporary stoppage of one processing plant. Many South Dakotans discovered limits on meat purchases in grocery stores with threats of greater shortages looming.

We found the food supply chain to be inadequate to the pandemic at hand.

South Dakota Public Broadcasting brings you a look at a supply chain, broken. We hear from industry representatives, Smithfield workers, producers, and consumers about a nationwide awakening to where our food comes from and how easily the American dinner plate can crash to the floor.

You’ll hear in-depth conversations on “In the Moment” alongside reporting from SDPB’s Seth Tupper, Jackie Hendry, Lee Strubinger, and Melissa Hamersma-Sievers. We’ll talk about the history of the conflict between ranchers and packers. We’ll hear about an awakening for the welfare and protection of factory workers. We’ll explore calls for federal action and meet innovative and resourceful South Dakotans finding ways to rethink where their meat comes from.

It’s a conversation that could have implications for decades to come. Or it could fade away, and we could end up no better off than we were before the pandemic.

Tune in to “In the Moment” the first week of June for daily coverage. (“In the Moment is live on SDPB Radio from 11 a.m. CST / 10 a.m. MST to 1 p.m. CST / 12 p.m .MST. You can also listen online at listen.sdpb.org.) Watch “South Dakota Focus,” hosted by Stephanie Rissler on Thursday, June 11 on SDPB-TV1 at 8 p.m. CST / 7 p.m. MST. Find all the coverage online at sdpb.org/foodsupply.

This is a story SDPB has covered since the beginning. Here are excerpts from and links to recent “In the Moment” conversations.

Liz Marty May, South Dakota rancher (May 27)

Liz May: I think the easiest way for the consumer to understand it is we have four major packers in the United States that control 85 percent of the beef processing. I might add that two of those are foreign owned. When you don’t have any competition in the marketplace this is what happens. This also happened back in August, if you remember the Holcomb fire in Kansas that started in one of the plants. I think it burned 1200 square feet, and it absolutely took that cattle market and tipped it upside down. It is so, so fragile. We’ve seen this and have been warning about this for years and years and years.

South Dakota producers Shane Odegaard and Jim Petrick (April 14)

Shane Odegaard: The pork production in our facilities today are designed on a continuous flow basis. And so for every pig that goes to market, there's one being born. With this hiccup, me not being able to market pigs, I've got a barn right now that's got roughly 900 head in it that need to go to market, that are at market weight. And I’ve also got pigs that are born that will need that barn for a home here in two weeks or less. And so if there's any hiccup in the flow, I am running up against a problem right now that I don't know what to do with these pigs. I mean, if I can't sell them, we're going to have to make some really, really hard decisions here on the farm.

Lori Walsh: What are the options?

Jim Petrick: It's really a double edged sword because consumers are going to feel it from the standpoint of less product being available in the supermarkets. But for the producers it's even going to be more challenging because, like Shane said, at some point in time, I hope we don't get to that fork in the road, but maybe at some point in time, we'll have to euthanize baby pigs or something just because there won't be a barn to put them in that's available.

Nancy Reynoza, Que Pasa Sioux Falls (April 20)

Nancy Reynoza: A lot of (Smithfield employees) did report (safety violations) to their union. And a lot of them have started, like I said, they called a lot of people in the community that they know that they feel comfortable with telling their story because they didn't want their name to be put out there. They still love their jobs, they still need their jobs, and all they were wanting from us is can you do something to make sure that we're protected while we're working?

And so they started to call a lot of different people that work in the community to help the immigrant community. And that's when we formed the South Dakota Dream Coalition, so that we could together get all of these text messages and the messages we were getting, and phone calls we were getting, put them all in one place where we can actually try to do something with that and let the community know this is what's happening, this is what the employees are saying.

Kooper Caraway, president, Sioux Falls AFL-CIO (May 7)

Kooper Caraway: I believe as soon as the plant has the ability to be fully operational it’s going to be fully operational. It’s very likely these lines are going to be moving faster than they were before they shut down. The CEOs have done a good job of creating a narrative of scarcity and of a need to get things out on the shelves very rapidly and quickly. I think that once they have the ability, the lines are going to be running faster than they were before when they were shut down.

U.S. Senator Mike Rounds (May 28)

Senator Rounds: I don’t think we can go back to business as usual. We need consumers to recognize that this is in their better interest to know where their food comes from, how secure it is, and the availability of it in the times of another national emergency. Packer concentration is a legitimate concern for our producers in South Dakota. More than 80 percent of the market is controlled by four packers. Two of those packers are controlled by international or non-U.S. organizations. They’re bringing in beef from other countries such as Brazil. Part of it is that they own a lot of that beef when they bring it in. So the packer concentration is one part of it — the vertical integration where it is controlled by the packers to begin with so if the prices start to go up on beef in the United States, they simply bring in more of their own beef and drop the price back down again as they refuse to participate in that cash market at your local barns. That’s part of the issue here.

For me it’s the reason why back in March I sent a letter to the Justice Department saying enough is enough. Look, the market is broken. You need to do an investigation as to whether or not these packers are in violation of the anti-trust laws that have been in place. I was joined at that time by three different senators on the same letter. Now we’ve got over 18 senators that have joined together on another letter since then asking for the same thing. The president has now joined on asking for this investigation, whether or not the packers have been involved in anti-trust activity.

Furthermore, my first letter said if they have not been involved in it, if the laws have not been violated, then there’s something wrong with the laws. We have to go back in and fix the laws because the market is broken. If we don’t fix it, we’re going to have producers who are going to go broke. And what we lose then is the ability to produce our own food in the United States, and we will be reliant on food coming in from outside sources. We can’t let that happen. That has got to be recognized.

Eliza Blue, author, “Accidental Rancher” (May 20)

Eliza Blue: There are some real issues and fragility in our current system. Those of us working in this field have been experiencing this for a while but it hadn’t yet trickled out to the greater population, so it wasn’t as obvious. First of all there are some great organizations that already exist that are doing great work like Dakota Resources and Dakota Rural Action. I just hope they continue to gain traction. If this is a topic you are interested in, those are great organizations to look into.

Similarly, there are already a lot of people working to promote farmers’ markets and doing direct marketing of products created in South Dakota and making it so there is a local supply chain as well. I hope those movements will continue to spread. Raising awareness is an important first step.

There are a lot of people needing to be fed. The supply chain is going to be longer than just you showing up in someone’s yard and they hand you some meat or vegetables. But I hope there will be more diversity and more options for consumers, and that because there will be more options, that will lead to resilience.

Taneeza Islam, South Dakota Dream Coalition (May 21)

Taneeza Islam: In South Dakota, 70 percent of COVID positive cases have ravaged immigrant, refugee, and communities of color. Seventy percent of COVID positive cases in South Dakota. And so it is a very different story based on who you are. I’ve seen comments, even from elected officials, saying it’s not impacting us in South Dakota like it is everywhere else. Well I would argue it’s impacting communities of color severely in South Dakota. And so it’s really important to understand that and to understand the trauma that our communities of color are facing because of this and the lack of assistance and awareness and action that’s taking place from elected officials to assist these particular communities here.

Lori Walsh is the host and senior producer of In the Moment.