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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.
      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
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