Pandemic slows down beef supply line

As is it has done with most aspects of life, the COVID-19 pandemic has disrupted the supply chain between the producers who raise cattle and the consumers who enjoy beef products.
Producers in southwest Minnesota said the pandemic has had little impact on their day-to-day operations. They’re feeding their cattle and preparing them for sale as usual. The problems and uncertainty begin once the cattle are ready to leave the farm.
“There is absolutely no meat shortage in this country,” said Jay Bakken, president of the Rock- Nobles Cattlemen’s Association who raises cattle west of Luverne. “What we have is a processing problem.”
Bakken said the pandemic has had two primary effects on the beef industry.
The first problem for the industry came when Minnesota Gov. Tim Walz closed restaurants and schools back in March in an effort to prevent the spread of COVID-19. Bakken said over 50 percent of beef goes to food service, which includes restaurants and schools. When those consumers were removed, Bakken said it took a huge chunk out of the demand for beef. At the same time there was a large surge in demand for beef in grocery stores that the packaging plants could not keep up with.
Bakken said that’s because the supply chain was not set up to have one segment of beef consumer (food service) suddenly drop to zero percent and another (grocery stores) rise to 100 percent. Packaging and processing facilities and distribution lines were not able to immediately redirect all of the product to grocery stores.
“It’s hard to switch gears that fast,” Bakken said.
He said that issue was eventually resolved, but then the second problem arose. COVID-19 outbreaks started to appear in packaging plants. Some plants were closed and production in others slowed down as workers became sick and the plants took measures to prevent outbreaks and keep employees safe.
Producers said the packaging plant closures or slow downs are limiting the amount of beef products available to grocery stores.
“Basically, it’s creating a shortage effect,” said Jon Caraway, who raises registered Red Angus cattle north of Lake Benton and is president of the Southwest Cattlemen’s Association, which includes Lincoln and Lyon counties.
Producers said that could lead to higher prices at the grocery stores, at least in the short term until packaging plants are back up and running. Bakken said that any increase in prices will not likely help producers because it will be the result of the packaging plants raising the prices to slow down demand. As a beef producer, he’s concerned that slowing of demand could eventually be detrimental to beef producers.
Producers are hoping that packaging plants reopen quickly and the matter is resolved, but Bakken said it could take a while.
“I think it’s going to be a slower process than we’d like,” he said.
Meanwhile, beef and other meat producers are limited or have no where to go with their animals for processing. Bakken said he’s not had any market ready animals since the pandemic began, but he will this month and in mid-July.
“It hasn’t affected me yet, but I can see it right down the road,” he said.
Beef producers said the slow down at the packaging plants won’t likely have as significant of an effect on the beef industry as it has on the pork industry due to the nature of the animals, the facilities they’re kept in and other factors. Ultimately, cattle could get too large to process, but it would take longer than it does for pigs.
Justin Louwagie, who custom feeds cattle north of Green Valley and is secretary of the Southwest Cattlemen’s Association, said if cattle grow to large, the owner might receive less for the animals, but they will still likely be able to sell them. For that reason, Bakken said he doesn’t think beef producers will be forced to euthanize any animals unless the packaging plant issues are not resolved for quite some time.
“We’ve got more flexibility,” he said.
The pandemic is affecting different producers in different ways depending on their operation.
Louwagie said the owner of the cattle he raises has had trouble selling them lately. The owner is also not bringing as many cattle to Louwagie. Typically, he has about 370 cattle on site, but he said in early May that he had only 200. He said some of those would typically have already been sent to market.
Caraway sells breeding stock, so he’s not dealing with packaging plants. He said he hasn’t been affected by the pandemic yet, but that if attendance at cattle auctions is down as a result of the pandemic and social distancing guidelines, there will be fewer bids and he’ll likely receive lower prices for his cattle. And if producers can’t sell their cattle, they might not be buying stock from people like him.

 

What's the beef?

With prices paid to cattlemen for their cattle continuing to fall and the price of beef at the grocery stores continuing to climb, many a consumer is questioning those higher prices and wondering what is causing them.
Now, with the closure of several beef packing plants, those consumers might think they have an answer. But, local cattlemen say, that is not the whole story behind the high prices for beef nor the reason beef prices climbed even before the COVID-19 pandemic.
Steve Steele, a cattleman from Jefferson County, Iowa, said it was the beef packers who were causing consumers to pay more at the store, while he and other cattlemen received less for their cattle.
“The packers’ price paid for my cattle continues to decline and I know other cattlemen are getting less for their cattle as well,” Steele said.
That’s a sentiment shared by a Minnesota cattleman, Kevin Rossow of Jackson County, as well. Rossow raises nearly 200 head on his place near Lakefield.
On April 15, U.S. Agriculture Secretary Sonny Perdue said the U.S. Department of Agriculture wants to fund coronavirus payments to farmers. Perdue spoke of the U.S. food supply being safe and readily available then. But he didn’t address the issue of pricing and the beef markets at the time.
Since then, several major packing plants — both for beef and pork — have had large outbreaks of the coronavirus among their thousands of employees resulting in the closure of many of those processing plants.
This, too, will affect the price consumers will pay for beef and pork at the grocery store, but that also leaves those raising cattle with few if any places to take their cattle for processing.
Perdue has said in order to help farmers, the U.S. Department of Agriculture intends to make direct payments to farmers as part of a $15 billion effort to help protect the food supply.
“We want to have direct payments to farmers but, more importantly, we want to purchase as much of the milk or other protein products, ham and pork products and more than can be utilized now for our food banks and possibly even international humanitarian aid,” he added.
But what about the beef?
Minnesota-based environmental and food writer Claire Kelloway reported March 25 on the continuing spike in meat prices at the supermarkets while noting cattle prices fell for ranchers and farmers. Her report stated wholesale beef prices have jumped to record levels partly because shoppers tend to stockpile meat in a typical fashion related to a national disaster — in this case, the coronavirus pandemic.
However, according to Kelloway’s report, that is not helping cattle producers, as cattle prices have continued to fall since January. In fact, prices paid to cattlemen for their cattle in early 2020 had already fallen 11 percent, putting many farmers and ranchers on the brink of collapse while the price of beef during that same timeframe climbed by more than 20 percent to the consumer.
Minnesota’s cattle industry alone is a $2 billion business, according to the Minnesota Department of Agriculture, with well more than 2 million cattle in the state’s cow-calf operations. And today, one out of every three farming operations includes cattle.
The U.S. Department of Agriculture is currently investigating beef pricing and Perdue recently approved an expansion of his department’s investigation into the cause of the discrepancies between boxed beef and live beef prices. President Trump’s administration unveiled its now $19 billion coronavirus aid package for farmers on April 17, which includes purchasing food for poor Americans and $16 billion in direct payments to the farmers.
As of April 20, the futures market for cattle were up for the second week in a row after a seven-week decline.
That has given some hope to cattlemen like Rossow and Steele, but the possibility of coronavirus outbreaks taking down even more packing plants still looms large, leaving the local cattlemen, like the pork producers, with little or no place to sell their animals.
That may soon leave consumers truly asking, “Where’s the beef?”

 

Rodger Olivier carries on the trade he learned from his father

Rodger Olivier has been shearing sheep for nearly 40 years.
“I learned sheep shearing from my dad back in 1981,” Olivier said.
He was 13 then and his father, Rodney, owned a sheep shearing business called A & O Shearing with another man in Stickney, S.D. Once he learned to shear, Olivier continued all through his school years.
“It was a way to earn money when I was in high school and I’ve always been a livestock person, particularly sheep,” he said.
It was his interest in sheep that eventually brought Olivier to Pipestone in 1987 to study sheep production management at Southwestern Technical Institute (now Minnesota West). After college, Olivier worked part-time jobs while he built up his sheep shearing business. He eventually sheared sheep full-time, shearing between 18,000 and 20,000 sheep a year.
In 1991 he traveled to Belle Fourche, S.D. to work on a five-man shearing trailer.
“Shearing out there is quite different from here,” Olivier said. “There are very few barns. Mostly we would drive the trailer out on the prairie to a corral holding from 500 to 5,000 sheep. We would back up to the corral, set up our trailer and start shearing. Mostly our electricity came from a generator supplied by the rancher.”
At one ranch, he recalled that the generator kept blowing fuses because it was too small for the job.
“We had used up all the fuses and were wondering what we were going to do when all of a sudden, ‘bang,’ the rancher fired off a round from his 30-30 rifle, took the empty shell and put it in the empty fuse slot, and we sheared the rest of the day with no problem,” Olivier said.
Olivier married his wife Trava in 1992. At that time, he participated in sheep shearing contests in the upper Midwest and won some awards including the Minnesota state shearing contest in 1998.
That was the last contest he ever competed in. It was also the year they adopted their sons, Tylor and Alex. It was also at about that time that he switched to shearing part-time and found another full-time job that kept him home with his family more.
Olivier has worked full-time for Pipestone Grain for about 20 years and still shears about 3,500 to 4,000 sheep a year, using Saturdays and vacation time from work. Olivier said he shears sheep nearly every week, except from August to October after the lambs are sent off to market.
Olivier does his shearing at the customer’s farm. His customers are mostly around Pipestone and Sioux Falls and as far west as his home town of Stickney. He has some customers with one sheep and some with 1,000. Olivier said shearers in the area are independent contractors and work together for larger projects.
“I’ve sheared with a lot of guys and had a lot of fun,” Olivier said.
He said there is an art to shearing and that shearers follow a pattern so that the fleece comes off in one piece.
“If you do it right, it comes off like a blanket,” Olivier said.
He said shearing is a physically demanding job that involves footwork and hand work as the shearer holds the sheep while shearing. He’s been told that an hour of shearing is equivalent to running a 5k in terms of physical exertion. It’s especially taxing when starting out and the body is not yet used to the demands of the work.
“You have aches and pains in places you didn’t know you had,” Olivier said.
Once he’s done shearing, Olivier takes the wool to a buyer. The buyer pays the farmer based on the weight and quality of the wool.
Finer wool is used for high quality garments, lower quality for gloves or blankets, he said. The high quality wool can bring as much as $.50 a pound, while the lower goes for around $.10 a pound. Olivier said Rambouillet  sheep produce the highest quality wool and meat breeds that have black faces produce poorer quality because it is coarser and has black fibers in it that don’t take dye.
Olivier said sheep shearing is a shrinking business. There are fewer sheep around than there used to be therefore fewer shearers, he said. One of the people he’s sheared with for many years is retiring and another is in his 70s and cutting back.
Olivier and his family have a small hobby flock of about 40 sheep of their own at their farm north of Pipestone that they raise for meat and wool. At one point about 12 to 15 years ago they had around 250 ewes. They reduced the size of their flock to be able to focus more of their energy on their children, Olivier said.
Now, one of his two daughters, Chloe, 13, has expressed an interest in learning to shear this summer. He plans to pass the trade on to her as his father did to him nearly four decades ago.
“My two brothers and my two sons did not want to learn how so I’m excited to have someone who wants to learn,” Olivier said. “There are very few young people learning this trade.”
 

Christopher helping to carry on a nearly
40-year family tradition

Corey Christopher is helping to carry on a nearly 40-year family tradition.
Christopher, of Christopher Show Lambs of Jackson, is one of the organizers of the Top of the Nation Lamb Show, which his father, the late Vernon Christopher, helped found in the early 1980s.
“My father and Duane Larson started the show in Jackson back in the early 1980s, and it’s been around ever since,” he said. “We’ve never missed a year.”
The summertime show annually draws upwards of 75 youth exhibitors from across the Upper Midwest to Jackson. It’s a jackpot show, with 100 percent of entry fees paid out in premiums. The rest of the cost of hosting the show is covered by generous local sponsors.
“Year in and year out, our sponsors just do a great job of supporting us,” Christopher said.
Show organizers attempt to sprinkle in a few new and exciting twists every so often to keep attendees coming back, Christopher said.
“We’ve had a comeback class, which was specifically for Jackson County born-and-bred lambs, and we do have a peewee show, which is a novice show that usually features a whole bunch of young kids out giving showing a try,” he said.
In terms of timing, organizers have tried both early summer and midsummer, Christopher said, and both seem to have their upsides.
“When we have it toward the end of June, we generally attract higher numbers of participants and from a wider area,” he said. “When we have it later – and especially now with it being held during the Jackson County Fair – we attract more local participants.”
The show has long been a sanctioned show, though it has outlasted many of the sanctioning bodies. At present, it is sanctioned by the Heartland Youth Show Lamb Circuit.
“It’s amazing the show has been going all these years,” Christopher said, “and we just hope to keep it going into the future.”
This year’s show begins at 2:30 p.m. Saturday, Aug. 1, at the Jackson County Fairgrounds in Jackson.