Sequester to Hit Meat Markets Through USDA Furloughs

Updated: 02/28/2013 10:18 PM KSTP.com By: Naomi Pescovitz

$85 billion in across-the-board budget cuts are set to kick in Friday night. Two years ago, a congressional super committee failed to reach an agreement on $1.2 trillion in cuts over the next decade.

The White House is warning of cuts at airport security, schools, and defense contractors. President Obama and congressional leaders plan to meet Friday.

Some of those cuts could hit America's meat and poultry processors. The White House warns more than 6,000 plants could slow production or temporarily shut down because the USDA would be forced to furlough meat inspectors for up to 15 days through September 30th.

 

McDonald's Meats in Clear Lake carries USDA inspected products and has a USDA inspector on site daily. They would be able to operate during any furloughs because they also carry state-inspected products. However, about 60 percent of their business revolves around USDA meat.

"To anticipate the furlough we would have to be paying the inspectors overtime to be here because we would be producing over our regular hours... We'd have to stock up on a lot of inventory, we'd be sitting on a lot of inventory and then we would still run out so financially, I would have lost sales," said McDonald's Meats co-owner Jennifer Dierkes.

Some of the state's larger plants could also be at risk during furloughs, which could trickle down to processors that use their raw materials.

"It's very frustrating because you almost feel like you have no control over it. Because from a small standpoint, at the end of the day, everyone who is involved in making those decisions on the federal side is going to go home, and they will still get their pay check, and yet I'll be awake, or here producing things, trying to make sure that our business stays viable and that we still have stuff to sell our customers during those times," Dierkes said.

The USDA has warned that nationally, the cuts could cause $10 billion in production losses and $400 million in lost wages.