Page 10 - MWC 9-10-20s

SHOCKS TO BEEF “The shift to more at-home The Midwest Cattleman · September 10, 2020 · P10
continued from page 3 consumption highlighted that GRANTS AVAILABLE FOR SMALL MEAT
not all meat is equal,” Ton-
sor said, noting that demand PROCESSORS
K-State Research and Exten- for ground beef products In response cessors can apply
sion. Those implications in- strengthened while demand to the coronavi- for a grant to fund
cluded restaurant and school for steaks and related cuts – rus pandemic, the expansion of cold
closures – two large outlets those normally sold to restau- Strengthening Peo- storage, equipment
for U.S. beef. As that hap- rants – weakened. ple and Revitalizing upgrades and up-
pened, demand for beef shift- Despite disruptions to beef Kansas Task Force dates or expansion
ed to grocery stores which exports, overall international has approved more of processing areas.
were allowed to stay open. trade has helped temper the than $130 million KLA made clear the
The actions disrupted the negative effects of the pan- in relief funding for economic need for assisting small proces-
long-established flow of the demic on the U.S. beef indus- development and connectivi- sors in discussions earlier this
beef supply chain. try, Tonsor said, warning that ty in the state. These federal- year with the Kansas Depart-
The second shock hap- a growing protectionism sen- ly provided dollars are being ment of Agriculture. Grant ap-
pened soon after when clus- timent in the United States awarded in the form of grants plications should be made for
ters of COVID-19 cases began will work against the market- to eligible businesses through capacity-related improvements
cropping up among employ- ing of beef exports. the Kansas Department of since March 1, 2020, through
ees in meat processing fa- As of June 1, Tonsor said Commerce. Two of these grant December 30, 2020. In ad-
cilities, forcing some to shut there were about 1 million programs may be of interest to dition, businesses with fewer
down temporarily to control head of cattle backed up in KLA members. than 500 employees are eligi-
the spread of the virus, said the supply chain because of The Securing Local Food ble to apply for Small Business
Tonsor, presenting his Beef packing plant closures and Systems grant program was Working Capital grants. Funds
Cattle Outlook at the recent marketing chain disruptions. created to support small meat can be used to pay working cap-
virtual 2020 K-State Risk & By Labor Day, however, he processing facilities, food pro- ital expenses such as payroll,
Profit Conference. believes much of the backlog cessors, food banks, local di- insurance, rent, mortgage pay-
That left market-ready will be processed. rect-to-consumer producers and ments, utilities, inventory and
cattle and other livestock in “We’re getting much more retail outlets to address supply more. Grants will be awarded
some areas with no market to current,” he said, but cau- chain disruptions as a result of on a rolling basis until funds
go to. The effect was a bottle- tioned, “these plants have the pandemic. The program is are depleted. For more infor-
neck, with a backlog of mar- been running quite hard. We based on the need to increase mation, see www.kansascom-
ket-ready animals growing can’t take labor availability capacity of local food systems. merce.gov/covidrelief/.
for a time, but fewer process- for granted. I don’t anticipate Specifically, small meat pro- KLA
ing facilities to handle them. another situation where we
Tonsor estimated that cattle have a 40% decline in produc- RED MEAT
and hog processing dropped tion like we did in April, but continued from page 3
by as much as 40% during the we could still have some dips.” produced in July, a
spring. He shared the most recent 2.6% increase over
As that bottleneck was live cattle price outlook re- 2019. The growth in
developing, so too were dis- leased by the Livestock Mar- beef production is
ruptions to export channels, keting Information Center attributable to cat-
which have become increas- which estimated the average tle dressed weights.
ingly important to the beef slaughter steer price for the In July, federally
industry in recent years. The third quarter this year at $99 inspected dressed intentions were expected to
worst of the “pinch point,” to $102 per hundredweight weights were 834 pounds, a decline 5% for the June-Au-
Tonsor said, was the last week (cwt), which would be down 3.5% (28 pound) increase from gust and September-Novem-
in April. 7.1% from a year ago. a year ago. The backlog of cat- ber quarters. The continued
Though some character- Fourth quarter prices are tle created by the pandemic strong pace of sow slaughter
ized that time as a developing expected to average $108 to has led to higher than normal would be supportive of the ex-
meat shortage, Tonsor said $112 per cwt, down 7.5% from dressed weights which has pected decline in sow farrow-
that’s not accurate: “There a year earlier, partly owing to bolstered beef production. ings for the next two quarters.
was no shortage of animals. heavier cattle and more beef Commercial pork produc- Commercial lamb and mut-
There was a disruption in the as a result of working through tion was nearly 2.4 billion ton production was 12.1 mil-
flow and at times the variety the backlog. The overall aver- pounds in July, an increase lion pounds for July increas-
of products that consumers age price for 2020 was esti- of 7.3% from last year. Com- ing 0.8% from a year ago.
could get. But for the calen- mated at $107 to $109, a de- mercial hog slaughter was Commercial sheep slaughter
dar year, we not only expect crease of 7.5% from 2019. over 11.2 million head for the was just over 195,000 head
beef production to be higher, LMIC projections for next month rising 6.1% from 2019. for the month, up 3.4% from
but also domestic beef con- year indicate an increase in Both pork production and hog 2019. The increase in slaugh-
sumption to be up.” prices, with first quarter 2021 slaughter were record levels ter was offset by a 1.5% de-
The third shock stemmed steer prices averaging $113 to for the month of July. Feder- cline in federally inspected
from the first two. When con- $118; second quarter averag- ally inspected hog weights re- dressed weights of 65 pounds
sumers knew they would be ing $116 to $122; third quar- mained above the prior year’s compared to 66 pounds last
staying at home and limited ter at $114 to $121 and fourth level with July at 211 pounds, year. Although slaughter
in their movements and also quarter at $117 to $125. Pric- up two pounds from last year. numbers were higher for the
learned of meat processing es for 2021 overall were esti- Sow slaughter continues to month, lower dressed weights
slowdowns, some bought up mated at $117-$120, which climb in 2020 with July at have led to a slowing in lamb
large quantities of beef and would be 9.7% higher than 279,000 head (up 9.8%) and and mutton production.
other food and goods, which 2020. year-to-date slaughter up Livestock Marketing
was characterized as a hoard- 11.6%. The June Hogs & Pigs Information Center
ing situation. report indicated farrowing