Cattle Industry Facing Billions In Losses Due To COVID-19

Steve Wooten, President of the Colorado Cattemen's Association. (Photo: YouTube)

During the COVID-19 pandemic, grocery store shelves have not exactly been as full as they normally are.

Many items that are usually in plentiful supply are less readily available.

Colorado cattle ranchers are working hard to keep the supply up and processing plants are trying to keep the supply chain intact and flowing.

All of that is easier said than done these days.

"The demand for beef has been incredibly strong," Steve Wooten, President of the Colorado Cattlemen's Association, told Mike Rice of KOA NewsRadio on Sunday, April 19. "Where we're getting a little concerned is our food supply delivery system. We noticed the plant in Greeley [JBS] shut down and is projected to maybe open by the 24th [of April] and the Cargill plant in Fort Morgan is shortening its work schedule, too, to allow for social distancing for employees. But that slows the process down when you do that."

Wooten, a cattle rancher in southeastern Colorado, said currently, the general state of and outlook for the cattle industry are serious and the ramifications of the COVID-19 crisis are readily apparent.

"We're beginning to get a little concerned if COVID becomes a major impact, not just in beef but in other protein and other produce sources, that our food supply may slow down."

The JBS meat packing plant in Greeley temporarily closed on April 13 due to COVID-19 outbreak among employees. The earliest the plant would reopen is April 24.

Wooten says the disruption is already noticeable.

"As current as the supply chain is now, it is impactful almost upon closing," Wooten said. "We had moved so much product with people being in their homes and isolated that they stocked up. They put meat into their freezer and got prepared. We have to refill everything from the plant to the warehousing and then to the grocery stores and their warehousing. We've got to fill that backlog and that impact is ongoing. That plant [JBS] being shut down for that number of days, it's going to have an effect."

While no one has dealt with a pandemic in recent times, Wooten says the cattle ranchers of Colorado are getting through this as best they can.

"Cattle producers are a resilient group of people," he said. "We deal with weather conflicts, with market conflicts, so we're really accustomed to facing challenges."

And Wooten said one of the challenges right now is markets. He noted an Oklahoma State University study, done at the request of the National Cattlemen's Beef Association, estimates the beef industry nationwide is facing a $13.6 million dollar loss due to COIVD-19.

"The cow-calf sector, the producer sector that grows the baby calves and sends them on up the supply chain, we're 57-59 percent of that loss," said Wooten, who himself operates in the cow-calf sector. "We're going to account for over seven billion dollars [in] losses in the cow-calf sector, which is the majority of Colorado."

"Those [losses] are hurting us," Wooten admitted. "We have a lot of concern about what type of markets we're going to be looking at as we bring these calves to market in the fall. Folks that have cattle in the feedlots right now, as those cattle come ready to process, the market for those cattle is very much in the red and a pretty significant loss to the business."

Wooten noted that consumer prices for beef have gone up some during the crisis but despite the tough market situation facing cattle producers, he does not anticipate a sharp increase the coming months.

"I think the price structure for the consumer is going to remain relatively the same. The cattle are going to move, even if a business operates at a loss for a year. The supply chain is going to fill back up, the cattle are going to be growing and be processed. The fact that we depleted our reserves of frozen-ready meat to go to the grocery stores means we're in a supply crunch so the consumer will see an increase, probably in all protein aspects, pork, poultry and beef."

"If we don't have long-term shutdown of plants, I would not be concerned in the long-term that, as people get healthy, we return to summer, the virus recedes, we'll be able to be up and fully operating and the supply will get back to full before we get to fall," Wooten said.

While that scenario is ideal for consumers, it leaves producers like Wooten likely taking a financial hit this year.

He says that's simply part of the cattle business.

"Because of the nature of the industry and the structure of the financing in agriculture, we can weather that loss."

Go HERE more on the Colorado Cattlemen's Association.

The full conversation with Steve is below.

4-19-20 Steve Wooten on KOA NewsRadio

From the Colorado Cattlemen's Association:

For Immediate Release

April 13, 2020

Colorado Beef Industry Responds to Greeley,Colorado’s JBS Beef Packing Plant 

Temporary Closure Due to COVID-19

April 13, 2020 - Today, JBS USA announced the temporary closure of the Greeley beef production facility until April 24, 2020, in response to Coronavirus 2019 (COVID-19). JBS took this step in close coordination with the Weld County Department of Public Health and Environment and the Colorado Department of Public Health and Environment.

“While beef producers are committed to providing safe and abundant beef for families throughout Colorado, the nation, and the world, our first concern is ensuring the health and safety of Coloradans in stopping the spread of COVID-19. We were saddened to hear of the passing of two workers from the plant and our thoughts are with their families,” stated Colorado Cattlemen’s Association (CCA) President Steve Wooten of Kim,Colorado.

The United States Department of Agriculture (USDA) and the Food and Drug Administration (FDA) have repeatedly stated that food products are safe. Colorado Beef Council (CBC) Chair Sallie Miller of Briggsdale, Colorado emphasizes, “The entire beef industry continues to provide consumers with a diversity of products they expect and is dedicated to working together to ensure food safety remains its top priority.”  

Consumers can be confident that adequate supplies of beef are available in their grocery store of choice. “While consumers have recently experienced some products being sold out in stores, this was a result of a peak in consumer demand and supply chain disruptions,” said Mike Veeman,ColoradoLivestock Association (CLA) President.

Our organizations are concerned about the business environment surrounding COVID-19, especially that of all beef production sectors from the cow/calf producer to the processing plant. However, we remain resolute in our commitment to do our part to end this pandemic, while providing a safe and nutritious beef eating experience.

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