If you’ve tried to do any shopping lately, you’ve probably noticed a distinct shortage of… everything. Want to redo your kitchen cabinetry or buy a front door? Good luck, those things are all on back order. Need a headstone for a recently departed loved one? There’s a shortage of materials there, so expect a delay. Do you want to buy your kid a pack of baseball cards? Better go online, because you probably won’t find them at a retail store. Over the summer, I’ve seen various restaurants have to limit their menus because of shortages in brisket, chicken and potatoes. I was at a ballgame and couldn’t buy a funnel cake because of a national shortage. A funnel cake!
The COVID pandemic has knocked the system of supply and demand completely out of whack. Things that used to be readily available are now permanently in-demand. As meat industry professionals, you’ve undoubtedly seen this for yourself if you’ve tried to buy your usual spice blends, packaging materials or new equipment. Raw materials are no exception. Meat plants can only produce as much as the number of employees allow them to produce. If there are fewer workers, there will be less product for further processors.
Last week, there was a fire at one of the major beef processing plants in the country. The damage wasn’t done to the actual slaughter/processing area, and production was slowed by just a day or two. But imagine what could have happened if the plant was shut down for months. Considering how few major beef slaughter plants there are in the country, the shutdown of one for an extended time could send beef prices skyrocketing.
Business owners have known for years about the dangers of relying too much on another company, be it a vendor or customer. If you tie your company’s survival too closely to another, you could be in deep trouble if that other company goes out of business or in a new direction. This is a good time for you to re-examine your supply chain. If a majority of your products go to one large customer or one large industry, look to diversify your customer base. Last year, we wrote about many meat companies that had to pivot quickly when the foodservice industry suddenly shut down. Those companies found spots in the online direct-to-consumer model. Others who couldn’t adapt quickly had to cut employees or go out of business.
If you get your raw materials from one supplier, think about what you might do if that supplier can’t supply you anymore. If you depend on a company to produce your hams or chicken breasts, do you know of alternate processors in case of an emergency? If the industry has learned anything over the last year, it’s that the meat supply chain that has worked for decades isn’t invulnerable to outside forces. Companies that shore up their supply chain now won’t have to panic when turbulence hits the industry again.
Sam Gazdziak
gazdziaks@bnpmedia.com
