Demand for beef is strong, it’s just a matter of getting it to the consumer, according to Iowa State University Extension Economist Chad Hart.
While the beef industry has suffered in the wake of the
COVID-19 pandemic, Hart said he’s seeing some positive signs.
The price for live cattle was up last week, reflecting the demand for beef here and internationally, he said.
“The potential for a rebound is here as I’m looking at the reopening of the restaurants and food service industry and as we start to provide protection of the workers at the processing plant and get those running at some base level of capacity. That will provide some support for the market,” he said.
While prices last week aren’t what they were three months ago, Hart said “hopefully we’ve found the bottom and are working our way back up.”
Pork and poultry producers have been facing the same dilemma as processing facilities have been shut down or reduced capacity across the country.
“The virus took advantage of the structure of our meat processing. What made our meat processing facilities so efficient is we had these big processing plants where a lot of people could work on a lot of animals in a short amount of time in a small place. That’s exactly what the virus was looking for,” Hart said.
Packing plants also will take a hit as their operations slow and as adjustments are made to keep workers safe.
“They’ll be incurring some additional costs as they try to reconstitute themselves so they can process while still dealing with the virus,” he said.
Like other ag commodities, the cattle market is at the mercy of the virus, Hart said.
“If we can keep the virus sort of under control, open our economy and re-establish our processing, then hopefully we have found the low and we’ll continue to build up. It depends on our ability to keep the virus at manageable levels. If we reopen too quick and see a spike, we could see additional closures and shut downs,” he said.
Hart is confident producers will do what’s necessary to survive.
“The folks who raise cattle have always been an independent breed. What the cattle producer is always good at doing is figuring out ways to weather the storm,” he said.
He said some will hold the growth of their cattle until processors can catch back up and some will market their animals directly through local locker plants.
“The cattle industry remains independent and resilient. Folks have weathered financial crisis before and they know how to get by at least for a while,” Hart said.
“The beef industry has been at record production for the past two or three years. When looking beyond COVID-19, I see a fairly strong domestic demand and tremendous growth internationally. I look for that to continue once we get beyond COVID-19. When you look at U. S. beef it’s considered top quality. When it comes to the global beef supply, we’re seeing strong international growth in our product.”