We use our latest NLP tool, the Coronavirus Tracker, to investigate the state of the industry with an analysis around recent announcements that have caused concern as COVID-19 has imposed challenges to the operation of processing facilities.
One function of the Amenity NLP Coronavirus Tracker is to allow users to quantify the frequency of mentions and gauge real-time trends in the narrative surrounding a targeted subject or industry. For example, the Coronavirus Tracker has generated increased extraction activity in the meat and poultry processing business of late. Recent announcements in the industry have sparked some cause for concern, as COVID-19 has imposed challenges to the operation of processing facilities.
As we used to Amenity NLP Platform to investigate the state of the industry, we found the most notable information to have come from an open letter from the Chairman of the Board of Tyson Foods on April 26:
Tyson Foods in the US is warning that ‘millions of pounds of meat’ will disappear from the supply chain as the pandemic pushes food processing plants to close, leading to product shortages in grocery stores across the country. ‘The food supply chain is breaking,’ wrote board chairman John Tyson in a full-page advertisement published Sunday in The New York Times, Washington Post and Arkansas Democrat-Gazette.
This concern was repeated frequently in the ensuing days:
The (Washington) Post reported Monday that 31 Smithfield, Tyson and JBS plants have had outbreaks, forcing 15 plants to close and causing a 25% cut in beef and pork production.
From the standpoint of the health of the meat processing companies, they do have some flexibility to pivot away from food service distribution channels (restaurants) and toward retail (the grocery story). There is uncertainty regarding the degree to which this is possible, although we suspect that sales are being aggressively diverted toward the healthier end markets.
More generally, it is difficult to fathom how the aggregate supply-demand picture for beef, pork and poultry could not tighten. We wonder how long these facilities will be down, and if there will be any meaningful impact on meat prices. Opinions on this topic abound. Like everything with the Coronavirus, this is a fluid situation that is worth watching.
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Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.
This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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