butcher shop

In relatively tiny plants or local butcher shops, small-scale production makes social distancing easier and companies can more readily enforce sanitary precautions. Many of them are thriving on the new demand for their products and processing.

While many regular American grocers are running out of meat, specialty food producers have plentiful supplies — for those who can afford it.

Production of luxe varieties like heritage pork, grass-fed beef and Amish-raised chicken are expanding at a time when coronavirus outbreaks at large processing plants have wiped out about 40% of conventional U.S. beef and pork capacity in recent weeks.

“There’s definitely an opportunity there for niche markets to emerge as a bigger component” of what consumers are buying, said McGuireWoods Consulting Senior Vice President Ryan Bernstein, who also operates a family farm in North Dakota.

But for lower-income families, there will be a “two-fold problem. There are issues on price and availability. And of course, if you have a lower income, you are more sensitive to price changes,” he said.

The U.S. meat crisis is highlighting a variety of social divides. Plant workers represent some of the populations facing a disproportionate hit from the health crisis and its economic fallout. They often come from low-income families and can’t afford to call in sick, and about 44% of them are Hispanic and a quarter are African Americans, a demographic seeing a devastating toll both physically and financially.

Meanwhile, consumers dealing with increasing unemployment and income loss are facing the tough choice of paying more for meat or going without. Prices for conventional meat have surged since early April, but it’s still not as expensive as specialty varieties.

Organic ground beef, for example, sells at a premium of 87% at $6.99 a pound, U.S. government data as of May 4 show. Organic boneless skinless chicken breasts at $7.10 a pound are 164% more expensive than their conventional counterparts at $2.69.

Things can get even pricier for options like grass-fed beef, which can fetch $9 to $12 a pound for hamburger.

The virus has had limited impact on the output of specialty meats for some of the same reasons those products are more expensive. The plants aren’t run on huge economies-of-scale, where hundreds of workers process thousands of animals each day.

Instead, livestock are raised on organic feed and pastures and then processed in relatively tiny plants or local butcher shops. It’s small-scale production, which means social distancing is easier and companies can more readily enforce sanitary precautions. Even if one plant goes down, it only accounts for a small fraction of supply, and the larger chain isn’t broken.

Take the case of Local Foods in Chicago. The wholesaler and distributor specializes in products grown on Midwest family farms, selling to restaurants and retailers, while operating its own storefront and butcher shop. Co-founder Dave Rand says that thanks to the company’s reliance on smaller producers, his customers aren’t seeing the same shortages that are plaguing big grocery chains.

“We don’t source any of our meat from any of those larger players, so in one sense we’ve been relatively insulated from the effects of the commodity industry having to shut their plants down or reduce processing days,” said Rand, who’s also the chief operations officer.

At least 30 American meat workers have died of coronavirus and more than 10,000 have been infected or exposed, according to the United Food and Commercial Workers International Union. At least 30 plants have closed at some point in the past two months, the union said May 8. The bulk of those closures came at large plants.

Concerns for workers are adding to a recent movement from consumers who want to buy food they consider more sustainable. Demand is now exploding for specialty farmers like Jake’s Country Meats in Cassopolis, Michigan, which produces heritage Berkshire/Duroc pigs and 100% grass-fed Scottish Highland cows.

“I’ve never seen anything like it,” said Nate Robinson, a sixth-generation farmer. He and his wife Lou Ann Robinson own Jake’s Country Meats, which is named after their son. Orders have about doubled from this time last year, with retail demand more than making up for losses related to restaurant closures.

Consumers are buying more specialty meat because “people are asking, ‘What am I eating? Where did that come from? How was it handled?’” he said.

Still, Robinson isn’t immune to the disruptions facing conventional producers. One of the small slaughter plants he works with is shutting temporarily because of the pandemic. That means he’ll likely keep cows on grass for a few months longer until they can be processed, and he may not have any grass-fed beef to sell until September.

But what makes Robinson’s situation different from the big producers is that the plant shutdown and his loss of production is unlikely to create a huge bottleneck in the larger supply chain.

In conventional meat production, processing is highly consolidated, with about 50 plants accounting for 98% of beef processing, according to Cassandra Fish, a livestock market analyst. Large producers have such a hold on output that it leaves few remedies when even a few facilities slow, leaving farmers with decreased options for selling their animals and sparking the possibility of shortages. Wholesale beef has more than doubled since early April, reaching a record high, because of a handful of plant closures.

In specialty meat, it’s a different story. Small, regional meat processors abound, said Rebecca Thistlethwaite, director of the Niche Meat Processor Assistance Network, which has around 1,500 small producer and processor members.

Members of the processing group are “incredibly busy right now, and many of them are thriving on the new demand for their products and processing,” she said.