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From Livestock Auctions To Packing Plants, COVID-19 Has A Big Impact On Beef

The pandemic has created a lot of uncertainty in the beef market. Prices for things like bulk burger are up. But other types of meat have taken a hit.
Ken Whytock
Flickr Creative Commons
The pandemic has created a lot of uncertainty in the beef market. Prices for things like bulk burger are up. But other types of meat have taken a hit.

Jake Billington has worked at the livestock auction at the Twin Falls Livestock Commission in southern Idaho for 28 years.

“Ever since I was old enough to walk and talk, I’ve been around it and been in it, been doing something around there,” Billington said.

Amid the COVID-19 crisis, livestock auctions like his are staying open to help maintain the food supply chain. They’re considered essential like hospitals and groceries stories and gas stations.

That doesn’t mean these auctions will keep operating like normal. In rural communities they’re often social gathering places, but now many have limits. Sellers are asked to just drop off cows and leave. And as for spectators, “We have limited it down to just serious buyers only. You know, one person per family,” Billington said.

These measures are being taken across the industry, according to Chelsea Good, vice president of government and industry affairs for the Livestock Marketing Association. The trade group is encouraging these precautions, but it’s also working to keep the beef moving.

“We’ve worked with both our federal officials, but then also our states and local communities to help get them that critical food supply designation and allow them to continue operating in this important time,” Good said.

These auctions are vital to rural communities nationwide, Good said. And while some ranchers might be able to market cows online, she said it’s important to have multiple bidders in the room. That’s what drives prices up so ranchers can make a profit.

“Candidly, that’s what livestock auctions are all about. We’ve got an auctioneer, we’ve got a competition and bidding, we’re working for that producer,” she said.

And some of those producers could use a boost right now. The pandemic has created a lot of market uncertainty. Prices for things like bulk burger you’d buy at Costco made historic gains as people rushed to the store to stock up. But other types of meat have taken a hit.

“Beef primarily is a product you consume a lot of in restaurants, and given that a lot of restaurants are shut down, that certainly dims the outlook for demand for those products,” said Eric Belasco, an associate professor of agricultural economics at Montana State University.

He said beef can also be a bellwether for the economy overall.

“When we’re in a recession, we see reduced demand for those products,” Belasco said. “So if you look at the futures market, look at the longer-term projections on prices, those are also going down.”

Beyond markets, the supply chain could face another challenge: meat-packing plants. The facilities that turn a cow into burger or steaks have been consolidated over the years. There are fewer of them, and they handle a lot more meat. There are also a lot more people in a single facility who can get sick and pass illnesses like COVID-19 along to other workers and potentially shutter a plant.

“It is critical that we keep those isolated from any outbreak,” Belasco said. “That’s a huge area of uncertainty because you can imagine some of the larger packing plants, if they were to shut down, you’d see a remarkable impact on the market for beef.”

If a packing plant closes, a lot of meat can’t be bought and processed. And that hurts everybody, from ranchers to auction houses to distributors to consumers. If big ones close, “then we would see prices increase,” Belasco said. “We’d also see a lower supply. So we might see less beef on the shelves and we would see it at a higher price.”

Packing plants have reported some cases of COVID-19 and some workers sent home.

But the good news is, federal inspectors will still be around inspecting the meat. And according to the CDC, there has been no evidence that food or food packaging can pass along the virus. Find reporter Madelyn Beck on Twitter  @MadelynBeck8

Copyright 2020 Boise State Public Radio

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana, and KRCC and KUNC in Colorado. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting .

Do you have questions about COVID-19? How has this crisis affected you? Our reporters would love to hear from you. You can submit your question or share your story here .

Copyright 2020 Boise State Public Radio News. To see more, visit Boise State Public Radio News.

Madelyn Beck is Boise State Public Radio's regional reporter with the Mountain West News Bureau.
Madelyn Beck is Boise State Public Radio's regional reporter with the Mountain West News Bureau. She's from Montana but has reported everywhere from North Dakota to Alaska to Washington, D.C. Her last few positions included covering energy resources in Wyoming and reporting on agriculture/rural life issues in Illinois.
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