US News quotes David Williams on impact of pandemic on meat business

The COVID-19 pandemic is causing meat shortages as processing factory workers get sick and supply chains reveal their fragility. US News & World Report quoted David Williams in One Clear Winner of the Processed Meat Shortage:

David Williams, president of Health Business Group, expects the bottleneck at beef packing facilities to last for some time because social distancing means they’ll have to operate at reduced capacity. That will be the norm until there is an effective treatment or vaccine, he says, and the reduced capacity could last for two years.

While processors can switch to less labor-intensive cuts of meat to simplify the process and increase their operating hours, demand for beef will drop along with people’s income because of the health crisis’ impact on the wider economy, he says…

Fast-food restaurants will struggle to increase prices, as people with diminished incomes will be looking for value, Williams says. But some customers who have been frequenting more expensive fast-casual restaurants, such as Panera, may begin to go to lower-end fast-food chains where they don’t have to enter the restaurant, potentially giving companies like McDonald’s Corp. (MCD) a bigger customer base.

Wendy’s (WEN) has been particularly affected because of its reliance on fresh beef compared with other chains that use frozen patties, Williams says.

May 26, 2020