US meat industry at risk of shutting down for weeks

Feb. 12, 2013

The U.S. meat industry may be forced to shut down for weeks as a result of the spending cuts planned to take effect on March 1, the White House has warned.

The U.S. meat industry may be forced to shut down for weeks as a result of the spending cuts planned to take effect on March 1, the White House has warned. The spending cuts are likely to keep meat and poultry inspectors out of manufacturing facilities for at least two weeks, according to a report from Reuters.

If production has not been inspected, U.S. meat processors and packers are not allowed to shop their production and sell it. The lack of the Agriculture Department's inspection seal will keep the whole production of beef, pork, lamb and poultry within the plants where it has been processed. Representatives of the industry are concerned that the effect on their business might be devastating.

The move will have a much broader effect on the entire U.S. economy and the meat industry will not be the only one affected. The impending spending cuts — which are expected to be put in place because of the so-called "fiscal cliff" — were delayed from Jan. 1 to March 1. However, as the date comes closer it is still unclear whether President Barack Obama and congressional Republicans will be able to overcome their differences and find a solution to the problem.

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If this does not happen, the USDA's Food Safety and Inspection Service will end up furloughing its employees, the Obama administration said in a statement. In that case, as much as $10 billion in production might be lost by the meat industry over these two weeks. Consumers are also bound to experience the impact, as meat supply is likely to come short of demand and prices might rise as a result, the New York Daily News warned.

According to Tom Vilsack, U.S. agriculture secretary, there is nothing to be done when Congress wants spending cuts everywhere. At the meat safety agency, workers' pay accounts for the the biggest expense so this is what should be restricted in the first place. He explained that the USDA spends about $1 billion each year on meat safety, employing 8,400 inspectors at 6,290 slaughter and processing plants across the United States.

However, inspectors still doubt that the measure will be implemented. Livestock inspectors in Chicago are skeptical that the White House would take the risk. Trader Joseph Ocrant also shared the opinion that the USDA inspectors will not be furloughed, because the "flak" would be hard to imagine. The American Meat Institute has called for the USDA to ensure meat plants are kept in operation and said that it should instead be looking for ways to reduce spending so that the targeted saving could be achieved without putting the existence of the industry at risk.

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