KEARNEY — The string of hardships endured recently by beef producers sounds like an end-of-the-world scenario: floods, fire and a pandemic.
The first floods came in March 2019, sweeping away cattle and covering many farm fields and grasslands with river water or sand. Localized flooding in parts of south-central Nebraska reoccurred in July, while other areas saw floodwater hang around the rest of the year.
Next came an August 2019 fire that damaged and temporarily shut down a Tyson beef processing plant at Holcomb, Kan.
That resulted in later feedlot placements and beef carcass weights 30 pounds higher than last year, said Darr Feedlot co-owner Craig Uden of Johnson Lake, who was 2017-18 National Cattlemen’s Beef Association president.
There still was a good February 2020 beef market, Uden said. Then came March and the COVID-19 pandemic.
Cattle prices that had been shaky at times, then dropped 25 percent. “It’s down as low as I can remember. There was panic in the market,” he said, which already was dealing with a lot of inventory.
Nebraska Cattlemen and other ag groups are urging the U.S. Department of Agriculture and Congress to investigate and monitor beef market manipulation concerns.
In a March 19 letter to Nebraska’s congressional delegation, Nebraska Cattlemen President Ken Herz of Lawrence wrote, “Because of the rapidly increasing spread between boxed beef prices and live cattle prices over the past week, our first priority is to demand USDA increase monitoring of price action and buyer behavior at the feedlot-packer interface and take swift action if undue price manipulation is discovered.”
Uden said that in recent weeks, beef markets have “jumped all over the place.”
“We’ve moved a lot of cattle the last two to three weeks. This week (March 23-28) could be the highest slaughter rate since 2000,” Uden said.
Half of beef sales usually are split equally between retail markets and food service businesses. With food services — hotels, restaurants, schools — closed or greatly diminished because of COVID-19, the positive sector has been retail.
“You’re moving a lot of ground beef, roasts and the middle cuts of steaks,” Uden said. “The top-end products (more often sold in restaurants) are still in the cooler.”
When Nebraska Farm Bureau President Steve Nelson of Axtell was asked if he’s concerned that meat processing plants might close because of COVID-19, he said some plants soon will implement employee screening, if they aren’t already doing so.
Temperatures will be taken as employees enter the plant and maybe again at other times of the day. Nelson added that food processors already have “a lot of biosecurity as part of everyday operations.”
The many unknowns linked to the pandemic’s length and severity include future beef demand.
“What happens to all the middle cuts, the steaks, some roasts and specialty cuts, that move (sales) into the summer?” Uden said. “... We’ve seen better prices this week, but what happens the next two weeks and after that?”
“We were looking for a very big year in trade,” he added, “and then this happens. It hit some of our key partners, South Korea and Japan, and they have handled this pretty well. But now they’ve canceled the Olympics (in Japan) and that put some dampers on demand for summer.”
The “what-happens-to-demand” question will continue.
A $2 trillion federal stimulus package was approved last week to help Americans survive lost income as business owners and laid-off workers, but Uden said people still will have less money to spend.
Beef sales are much more dependent on U.S. markets than grains. So while there is potential to sell more beef because of new trade agreements with Canada, Mexico and Japan, and a first phase deal to restore some ag exports to China, Uden said better prices will depend on demand closer to home.
“It’s rough right now because we don’t know if we’ll reopen (U.S. businesses) in two weeks or two months,” he added.
May is Beef Month so that may encourage more beef purchases.
“People can stay home and grill out more,” Uden said.