March 5 (Bloomberg) -- Furloughs of inspectors at meatpacking plants under mandated U.S. budget cuts will take “several months” to implement as workers have to be notified ahead of time, Agriculture Secretary Tom Vilsack said.
The U.S. Department of Agriculture is sending out notices to union representatives this week that furloughs are possible, Vilsack said today at a hearing of the House Agriculture Committee. Meatpacking plants can’t operate without a USDA inspector present, so keeping facilities open will be a challenge, he said.
“We will do everything we can to minimize the disruption,” he said. “We are looking at a several-month period before furloughs can be implemented.”
About $85 billion in federal spending cuts for this fiscal year began taking effect March 1 under so-called sequestration, a budget mechanism stemming from failed deficit-reduction negotiations. Democratic and Republican leaders have indicated they would revisit the reductions after they pass legislation needed to keep the government running beyond March 27. A Senate plan to avert sequestration partly by ending about $5 billion in annual farm subsidies failed to receive a vote last week.
Slaughterhouses operated by Tyson Foods Inc. and Smithfield Foods Inc. may shut for as many as 15 days after meat inspectors are sent home without pay, and weather forecasts important to farmers could be compromised by idled meteorologists at the National Weather Service, the government has said. Tyson and Cargill Inc., two of the largest U.S. meat processors, said last week they don’t expect furloughs of meat inspectors to occur before at least April.
Vilsack said that the latest calculations of what the USDA needs to save indicate “the furlough days may be in the neighborhood of 11 to 12 days” and that the mandated days off without pay will be staggered.
Predictions that meatpacking plants will need to close as inspectors are furloughed are roiling commodity prices, committee Chairman Frank Lucas, an Oklahoma Republican, told Vilsack, questioning whether the disruptions predicted by the administration of President Barack Obama will be as dire as portrayed.
“Members of this committee have heard from constituents that these statements about the interruption of production have affected prices, caused concern among financial markets, and alarmed buyers and sellers in the retail and food-service community,” Lucas said.
Meat, poultry and egg processors are prohibited from operating without the presence of federal inspectors. 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, Vilsack said in a Feb. 5 letter to Senate Appropriations Committee Chairwoman Barbara Mikulski.
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.
Each year, contaminated food kills about 3,000 people and sends another 128,000 to hospitals, according to the U.S. Centers for Disease Control and Prevention.
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