Sequester-Driven Layoffs May Idle Meat Plants

A House agriculture subcommittee chairman acknowledged Wednesday that there's "a possibility" some meat plants could be idled if there's a mass layoff of USDA food inspectors under sequester cuts, although the lawmaker suggested a better solution would be rolling furloughs of some of the 8,500 meat inspectors.

"Well I don't know if they are going to be rolling or not - but it should," Rep. Michael Conaway (R-TX) told CNBC in an interview Wednesday. Conaway sits on the House Agriculture Committee and serves as Subcommittee Chairman of the General Farm Commodities and Risk Management.

Earlier this month, USDA Secretary Tom Vilsack made statements about the sequester impact and possible furloughs of all food safety inspectors, including federal workers responsible for inspections at meat, poultry and egg production.

Conaway conceded that meat plants would need to have inspectors on hand or be forced to shut down. "Well that's a possibility," he said of closings. "They (USDA) could use that technique."

If there are mass layoffs of food safety inspectors, plant closings could impact consumers and result in higher prices, according to Conaway. "If the supply is disrupted there are shortages in the just-in-time-delivery system that we've become accustomed to," he said. "Then scarcity of products will cause prices to go up."

Imported meats also would be impacted, according to Conaway. "We have inspectors around the world. They would be subject to the same kind of reduced resources available to do the inspection that domestic would as well."

Last week, Conaway wrote Secretary Vilsack to get details on how the agency plans to implement its sequester cuts. He asked Vilsack for a response by Feb. 25. When asked Wednesday whether he had heard back, Conaway responded: "No, I've not heard back anything from the Secretary."