CCTV Transcripts

CCTV Script 08/05/20

— This is the script of CNBC's news report for China's CCTV on May 8, 2020, Friday.

A new report we got from CoBank, a major member of the U.S. farm credit system, predicts that U.S. pork and beef prices could rise 20 percent in the coming months. Economists from CoBank say that would be an unprecedented increase. In the past 20 years, U.S. pork prices rose more than 10% only twice, and never increased more than 20%.

The report also says meat shortages and rising prices in the United States are almost certain after a 35 percent drop in pork and beef production. By the end of April, the price of fresh meat in the United States had risen 8.1 percent, according to Nielsen, a market-research firm. American consumers need to bear more of the economic burden.

As of April 25, U.S. consumers spent 43 percent more on meat at supermarkets than they did a year earlier because of changes in spending habits during the outbreak.

JAYSON LUSK 

AGRICULTURE ECONOMIST, PURDUE UNIVERSITY 

A lot of problems we are seeing at this moment relate to the structure of the industry, i think it's useful to think this as an hourglass shape, there are lots of livestock producers, but all of these animals have to flow to a small number of a very large packing facilities.

Because of the illness of workers in those plants we weren't able to produce as much meat as we are customized to, we are down about 40% of meat in our processing compared to the same time last year.

The meat shortage is also putting Americans at a disadvantage, according to several media reports,

Wendy's, an American fast-food chain, no longer has burgers on its online menu, its burgers usually made with fresh beef. In recent days, major supermarket chains, including Costco and Kroger, have also announced restrictions on meat purchases. The CEO of Kroger told CNBC that they are doing everything they can in a variety of ways to try to ensure the availability of meat.

Rodney McMullen 

Kroger CEO 

"We're working with all of our meat suppliers, figuring out how to get products that were diverted to restaurants before to get diverted to our stores. We're working with new suppliers. And it's one of those things where on a daily basis, our teams are working 24/7 finding products and getting it there for our customers."

The US President Donald trump has signed an executive order authorizing us meat processors to remain open during an outbreak using the Defence Production Act in response to a meat shortage, but the move has faced huge controversy.

This week Smithfield, the nation's largest pork processor, reopened its plant at Sioux falls, South Dakota, after a three-week shutdown. On Tuesday, a federal judge in Missouri dismissed a lawsuit by a workers' rights group that accused Smithfield of failing to adequately protect its employees from coronavirus. The judge also said the federal government, not the courts, should oversee workers' working conditions after President trump signed an executive order requiring meat processing plants to stay open.

If these meat companies can ensure that their workers return to work in a healthy and orderly manner, the shortage of meat in the United States will be alleviated. If a group outbreak occurs again, it can lead to more complex consequences. But meat processing is only one part. The outbreak, labor shortages and changes in the supply chain all affect meat prices. The future direction of prices will still be largely dependent on the development of the outbreak. We will keep an eye on this issue.