A recent USDA report on cattle market reactions, both to a devastating plant fire a year ago and the now four-month-old coronavirus pandemic, shows general action to get markets back to normal in fairly quick fashion — even if the price jump in grocery stores earlier this year could be considered extreme.
Lyon County Extension ag agent Brian Rees explains:
The report deals with market conditions, fed cattle prices, boxed beef prices and spread from the Holcomb fire at a Tyson production facility almost a year ago to now. Right after the August 2019 fire at Holcomb, harvesting of fed cattle actually was above pre-fire levels as Tyson apparently sent a lot of cattle originally destined for Holcomb to other plants. Boxed beef prices did spike for a couple of weeks after the fire before trending closer to normal.
COVID-19 had supply disruptions of its own as large numbers of workers got sick and many plants had declining production as a result. Some plants were forced to close briefly as well, while consumers started stockpiling beef — with both steps significantly driving up prices. Production increased quickly, but beef shortages remained for some time because packers couldn’t pivot rapidly enough from food service to retail grocers in order to meet consumer demand. Disruptions peaked in late April and declined through May.
The report that came out last week was also important for what it did not cover — namely, whether the so-called “Big Four” packing businesses of Cargill, JBS, National Beef and Tyson have illegally manipulated markets for maximum profits at a time when local producers are either seeing losses or bare minimum profits. The USDA has not said when that report will be released.
Off that topic, Rees says hay tonnage is down considerably. Hay yields are about half the normal average, largely due to recent dry conditions. Hay quality is high but may deteriorate later this summer. Rees says this can be a serious issue for producers, depending on how many cattle they have.
You can view the USDA report by clicking here.
