Cargill, Tyson Don’t Expect Immediate Inspector Furloughs

Tyson Foods Inc. (TSN) and Cargill Inc., two of the largest U.S. meat processors, don’t expect potential furloughs of meat inspectors due to federal budget cuts to occur before at least April.

Tyson, the largest U.S. processor of chicken and beef, doesn’t expect an immediate impact, Gary Mickelson, a spokesman for the Springdale, Arkansas-company, said in an e-mail yesterday. Cargill doesn’t anticipate any changes until at least April, Mike Martin, a spokesman, said in an e-mail.

The U.S. Department of Agriculture was considering furloughing inspectors for 15 days as part of automatic federal budget cuts that were set to take effect yesterday, the National Chicken Council said in a Feb. 11 letter with other trade groups. Meat, poultry and egg processors are prohibited from operating without the presence of federal inspectors, which may halt production at some plants.

“We are hopeful USDA will formulate a common sense plan that will not interrupt the production of food for Americans and consumers around the world who enjoy U.S. meat products,” Martin said in an e-mail yesterday.

A 15-day furlough may cost the industry more than $10 billion in production losses and workers may lose more than $400 million in wages, Agriculture Secretary Tom Vilsack said in a Feb. 5 letter to Senator Barbara Mikulski, chairwoman of the appropriations committee.

Essential Workers

Closely held Cargill is waiting for USDA to determine its plan, Martin said. Tyson will develop contingency plans after getting more details from the USDA, Mickelson said. Food inspectors were “deemed essential” during previous budgetary impasses, Tom Super, a spokesman for the National Chicken Council, said in an e-mail.

A furlough of food inspectors “would affect all retail and food-service companies,” Mike Siemienas, a spokesman for Supervalu Inc., a grocery-store chain owner, said in a telephone interview Feb. 26. Sanderson Farms Inc., the third-largest U.S. chicken processor, said in a filing it would have to shut plants if inspectors were removed.

The USDA is responsible for the safety of meat, eggs and poultry products with about 8,400 personnel inspecting the nation’s 6,300 slaughterhouses and processing plants. The U.S. Food and Drug Administration handles other products that account for about 80 percent of the U.S. food supply.

Cargill is tied with JBS SA as the second-largest U.S. beef processor.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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