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Serving: MN
Coronavirus
Hereford cattle grazing Paula Mohr
PANDEMIC CUT: COVID-19 interrupted the beef supply chain and caused beef prices to drop around 35% for Minnesota beef producers.

COVID-19 takes cut out of beef prices

The beef industry is in a challenging position as grilling season gets started.

As the calendar flips through summer months, Americans are lighting the charcoal or firing up gas grills as part of their meal preparation process.

Grilling season is prime time for beef as people enjoy the warmer weather. But, as is the case with many sectors of the economy, the coronavirus has thrown some cold water on the beef industry’s fire.

Beef packing plants around the country reduced their level of processing due to worker safety concerns with COVID-19. While all of those facilities are up and running, Karin Schaefer, Minnesota Beef Council’s former executive director (Schaefer is the new Minnesota Farm Bureau executive director effective June 1), says production is still well-below normal levels.

“When coronavirus hit, we had challenges right off the bat from our packing plants, all the way back to our livestock markets,” Schaefer says. “Auction barns paused because there weren’t buyers and we saw that trickle down into the cow-calf sector where calves just weren’t getting moved into the next phase of production because there wasn’t any movement on the upper end.”

Beef packers were running at about 80% capacity in early June, which is an improvement. But for many cattle farmers, serious damage has been done.

Mike LanduytHEALTHY WORKFORCE: As packing plants gradually come back to full capacity, Mike Landuyt, Minnesota Cattlemen president, says it is important the plant employees return to safe working environments.

“Like other industries, it [coronavirus] was really hard on our market,” says Mike Landuyt, Minnesota State Cattlemen’s Association president and Walnut Grove farmer. “We saw over 35% decline in our prices just because of this.”

Landuyt says he knows fellow farmers who have lost $300 to nearly $500 per cow.

Chain reaction

Schaefer says Minnesota is the 10th leading cattle producing state in the country. Minnesota cattle farms are a mix of feedyards, which feed calves until they reach market size, and cow-calf operations that produce the calves those feeders need. With fewer cattle going to market, the demand for calves was reduced, creating an unwanted trickle-down effect.

“We’re seeing the holdup for cow-calf operators,” Landuyt says. “They’ve not been able to move their cattle. If we don’t have pen space in the feedyard, there’s no place for their cattle to go. They made their feed last summer based on how long they expected to have their cattle, now farmers are starting to run out of feed, and they have to come up with alternative ways to feed them.”

Unlike the pork industry, which has seen some farmers forced to euthanize animals because of processing plant shutdowns, that unthinkable step has not been taken in the cattle industry.

“So far, everybody has been able to find a spot to tuck them and not have to do anything too drastic,” Landuyt says.

The nation’s food supply chain is a sophisticated process that links growers, processors, distributors and retailers in a delicate dance to keep product moving as efficiently as possible. Hiccups anywhere in the path affects the other portions of the supply chain.

“I don’t think a lot of people realize just how intricate our supply system is, just how timed out everything is and how much thought goes into what happens each day,” Landuyt says. “Which hogs, turkeys, chickens, cattle go where is all plotted out, sometimes years in advance, especially on the cattle side. The cattle that are being bred this year won’t calve until next year and won’t hit the market until the year after that. Decisions being made now are several-year decisions, so you don’t just change that overnight.”

While Minnesota has substantial cattle production, the state has limited packing capacity. Most of the state’s cattle are processed in other states.

“That’s one of the obstacles we have. We don’t have a lot of control over the packing capacity. What’s governed by states and governors in other states we have no control over that, but it does impact us,” Schaefer says. “This showcases the dynamics of our food supply and that it’s nationwide. What happens in one plant, even if Minnesota farmers aren’t selling to that plant, will affect all the other packers and it will affect cattle prices, too.”

Schaefer and Landuyt agree that it’s important for the beef industry to have plants up and running at full capacity while maintaining a safe work environment for employees. Schaefer says packing plants are prioritizing employee COVID-19 testing “so I think that’s going to be really helpful to make sure that those who have been cleared to go back to work feel safe.”

On the shelf

Consumers have likely noticed changes in beef availability at the retail level. Some spot shortages have occurred, and Schaefer says not every beef cut has been available every day.

While prices for cattle producers have gone down, prices consumers pay have gone up because of the value of primal meat cuts coming from the processors. Overall, Schaefer stresses, there is not a shortage of beef.

“Beef is coming to those grocery stores on a weekly basis, and on top of that, we know that our production capacity is increasing every day, so hopefully we’ll be digging ourselves out of this hiccup in production that we’ve had,” Schaefer says. “Finding ways to get back to a stable production level while keeping employees safe is going to be the number one factor in moving everything down the line and making it function as close to normal as possible.”

“We have the cattle out here in the country to get to the plant,” Landuyt says, “but we need those important people in the middle to keep everything rolling.”

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