By Craig W. Anderson
The COVID pandemic hit the U.S. meat packing plants, reducing their beef-processing capacity that affected ranchers, supplies, prices and consumers.
“There wasn’t a problem with the number of cows available to provide beef in the food chain, it was a logistics thing,” said SJFB President David Strecker. “There was nowhere to go when the cows were ready.”
The problem arose because beef processing plants depend on humans making the cuts because robotics haven’t achieved the sophistication necessary to effectively carve the carcasses due to the animal’s frame and muscling.
Also, meatpacking crews usually work side by side on the “disassembly lines” and this led to 15,200 confirmed COVID cases in meatpacking plants nationwide in June, according to the U.S. Centers for Disease Control and Prevention. Thus, the nation’s major meat-packing plants were slowed to a crawl and logistically the food chain was significantly interrupted.
Adding to the angst was that one of the main purchasers of beef, the restaurant industry, were “up in the air as they were all shuttered by the various mandates limiting people crowding into any indoor venue,” Strecker said. “People still wanted beef but it was challenging getting meat products. With restaurants not doing business and schools out, the supply chain wasn’t able to complete the field-to-table program.”
With entire counties, states, nations and the world on COVID protocol, consumers still wanted beef products but there was little or no product available.
Tina Saitone, a U.C. Davis Cooperative Extension specialist in livestock and rangeland economics, said during a recent webinar, “California ranchers, who primarily run cow-calf and stocker operations, rely heavily on rangeland and pastures to feed their cattle. But with one-third of California facing drought conditions, lack of feed has hurt their ability to hold cattle longer, particularly when feeder prices collapsed” due to COVID-related impacts.
Many elements contributed to cattle rancher’s problems during the ongoing pandemic, including declining prices to beef producers, said Kenny Watkins, Linden area cattle rancher and diversified farmer. “Lots of regulations, minimum wage and the 40-hour work week, the pandemic, restaurants not buying meat, small local packers gone and small cattle operations also gone, all contributed to the lack of the ability for cattle ranchers to make a profit.”
He said many small cattle ranchers have quit the industry “and that affects the feed guys and others associated with beef cattle.” Watkins noted that “more taxes have combined with ever-increasing regulations and low on-hoof prices to create a difficult environment with so many things working against us.”
“Packers control the market,” Watkins said. “Producers have no control of prices and we can’t raise prices when we run up against the price wall. It’s frustrating because many ranchers aren’t able to harvest their beef and still keep going. There is lots of beef but we just can’t get them through the system.”
Widespread processing plant shutdowns in May led to a 40% reduction in processing capacity, according to Saitone, and an oversupply of cattle on the market that couldn’t be processed because of plant closures. “There was no incentive for processors to increase the price they were paying for cattle,” Saitone said.
The producers took another hit. “After the product leaves the producer is where the slowdown and price problems happen,” said Watkins.
“With restaurants gone, the main purchaser of our product was gone,” said Watkins, noting that processors couldn’t provide the meat needed by food service due to the additional labor required to cut the meat.
The creation of regulations hasn’t stopped during the pandemic and, said Watkins, that was the final straw for many small local packers who packed up and left the industry.
“Ranch slaughtering’s all backlogged,” Watkins said. “Once we were able to go to Alpine Meats with beef, that needed processing and it would be hanging the same day and we could pick it up. That’s all gone now.”
Saitone said if a widespread recession is caused by the pandemic “a concern for producers is how lower household income levels have historically reduced demand for beef, leading to longer-term impacts for the beef sector.”
“The minimum wage is scheduled to go up again,” Watkins said. “There are reasons in the legislation that allow for those increases to be postponed, and the legislators could reschedule the minimum wage increase, but they’re gutless and they won’t. Gov. Newsome says they’ll go as scheduled which is exactly the wrong thing to do during this COVID and economic pandemic.”