COUNTY AG NEWS
How COVID-19 is affecting the meat industry
On May 10, the USDA announced the reopening of 14 meatpacking plants across the country, including four beef plants, seven pork plants and one poultry facility.
The COVID-19 crisis has shown that the food supply is not immune from problems when the supply chain is broken. Today you see stores around the country with empty shelves. The meat supply is also affected. Today we have a large share of the nation’s meat processing concentrated in a few large processing facilities. When these facilities shut down for whatever reason it has a huge effect on meat supply.
In recent years all smaller processors were almost lost that once served local areas. In the meat industry, as in most of production agriculture, farmers’ forward contract to deliver a product at a future date for a set price. Now, farmers who have contracts to deliver fat cattle to processing facilities have nowhere to go with these cattle when the processors shut down. Feedlots are filled up with fat cattle, cattle producers need to move young cattle off of their farms into feedlots but are now unable to do so. Farm income in the cattle business has suffered the same fate as other areas of agriculture. Animal production is geared for a market animal of a certain weight. When those animals cannot be marketed these animals continue to increase in size and weight. This results in animals; cattle, pigs, poultry, that are fat and overweight. Not the animals that processors really want.
Prices received for finished cattle are now significantly lower than just a few months ago. Prices for young cattle have held up fairly well at this point due to the fact that summer is here and many of the young cattle will be put on pasture over the summer months.
Producers would like to move more fed cattle directly to consumers but the challenge now is that the smaller local processing facilities that are open are booked all the way out into 2021.
Consumers can get some bargains by purchasing direct from the farmer but the problem is finding a processor.
In recent years there has been a movement toward consumers wanting to know where their food comes from and how it is produced and processed. This pandemic may amplify this movement.
Smaller processors are seeing such an increase in sales that many of them are limiting the amount that the customer may purchase. The customer will likely see shortages of some cuts or types of meat and there likely will be increased prices as well.