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Economics

COVID And Cattle: The Pandemic's Continued Influence On The Beef Market

Panic buying has slowed down considerably since this spring, but one thing still lingering is higher demand for meat that's easier for people to cook themselves.

"Ground beef, hamburger, to some degree roasts - things people know how to prepare at home and are, you know, pretty comfortable with," said Chelsea Good of the Livestock Marketing Association.

That's not as true for higher-end cuts of beef. With more of those on the market, Good said that translates into lower costs and some discounts at grocery stores. But actually getting the meat to the store is still a bit of an issue - especially for some of those nicer, local cuts.

The problem is processing. Workers at some of the large meat plants were hit hard by COVID-19. That slowed those facilities down, causing many ranchers to turn to smaller butchering facilities. Now, even as some larger plants pick up speed, the smaller ones are still swamped.

Good said it's even affecting hunters looking to get deer processed.

"They called their local meat lockers and got quite a surprise in terms of the wait time," she said. "You know, at this point, it's well into 2021. I've heard of some that are backed up well into even 2022."

Exacerbating things further is the existing trend of ranchers starting to sell directly to consumers, which has only become more common during the pandemic.

Lorianne Lau is one Idaho rancher using that method. She's been selling direct-to-consumer there and in Utah for 16 years, but when she called her butcher back in May, he was already booked clear through April 2021.

"We've just been following up with him trying to say, 'You know, if you can sneak any in, we'd sure love to.' And he's like, 'You and everybody and their uncle,'" she said.

Lau said her sales have picked up during the pandemic because people were concerned about the meat supply chain and wanted to buy directly from ranchers.

Lau is also the president of the Caribou County Farm Bureau in southeast Idaho, and she wants it to be easier for small operations to butcher cattle.

"There are state-inspected systems in states like Utah and Wyoming, but they have to follow the federal model, which comes with a whole lot of gobbledygook," she said.

That gobbledygook includes getting a USDA inspector and providing access to facilities like bathrooms for them. And that's just easier for large operations with economies of scale. According to the most recent numbers, only four companies control 80% of the beef processing market. And those major companies are under investigation for price-fixing during the pandemic.

Lau wants to ensure both meat safety and access for small operations.

"Perhaps there is nothing better than the federal model, but perhaps there is," she said, noting that a new system would still take some time. "In two or three years, we could invent this new model … something that would be equally protective, but not as onerous as the existing systems."

But not everyone wants to sell beef direct-to-consumer or operate a small butcher shop with tight margins. There's still a massive demand for the larger-scale, lower-cost operations to supply stores. And the ranchers in that business took a hit this year.

Eric Belasco is an associate professor of agricultural economics at Montana State University. He says live cattle prices dipped about 11% between mid-February and mid-December. One culprit - yet again - is processing.

"Really, a lot of the pressure seems to be on the processing side," Belasco said. "That's where the live cattle market is, the one that has just seen a huge drop in prices that just has not recovered."

He said while a bottleneck in processing plants could contribute to the price decline, there is some good news.

"The volatility is down," Belasco said, meaning that ranchers can budget for next year. "And prices are down, but they weren't quite where they were back in April. So I think if we were back there, we could have imagined a scenario where it was a lot worse. But it's certainly not ideal."

Belasco said this year also shows how resilient the industry can be. For the last several months, you could still buy beef in the store, even as COVID-19 outbreaks spread through major packing plants around the nation.

But of course, that highlights another change activists are calling for in the packing industry: more safety for workers. Tens of thousands have gotten sick in meat-packing plants, and hundreds have died, all trying to keep that meat moving.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.

Copyright 2021 Boise State Public Radio News. To see more, visit Boise State Public Radio News.