BEEFING UP DEMAND
While prices might be up, backlog of animals waiting to be slaughtered means farmers are being paid less for cows
There weren’t any hamburgers available when Ricky Booth went to the Wendy’s near his family’s Doc Partin Ranch recently in Osceola County. “I know as a producer that the cattle are out there to fill that order,” Booth said. “It’s frustrating to know that they’re just sitting in feedlots or sitting in pastures not being processed, but I also understand that some of those processing facilities were closed because many of the workers got sick.”
The coronavirus pandemic has kept cows, chickens and pigs across the country from being slaughtered because of processing plants shuttered by the coronavirus, potentially hurting both consumers looking for burgers and Florida ranchers like Booth who may be forced to sell their cattle at a lower price.
However, President Donald Trump has signed an executive order directing the U.S. Department of Agriculture to keep production going, and the Florida cattle industry stresses it has plenty of animals.
“I think it’s a bit sensational to worry about a
nationwide long-term beef shortage,” said Dusty Holley, director of field services for the Florida Cattlemen’s Association. Some Wendy’s go ‘chicken-only’
An analysis from investment services company Stifel of 185 Wendy’s in 30 randomly selected markets indicated about 5% to 10% of the chain’s restaurants had gone to “chicken-only menus,” according to a May 4 report.
The report’s title plays off the chain’s popular marketing, reading: “Recent Shortages Have Some Asking, ‘Where’s the Beef?’”
“Unlike other major burger chains, Wendy’s uses ‘fresh, never frozen’ beef, which we believe gives it outsized exposure to recent disruptions,” the Stifel report states. “Consequently, restaurants may need to operate with more limited menus.”
Wendy’s said in a statement it is working to minimize the impact on customers.
“It is widely known that beef suppliers across North America are currently facing production challenges,” the company said. “We continue to supply hamburgers to all of our restaurants, with deliveries two or three times a week, which is consistent with normal delivery schedules.”
Not all restaurants are having issues. Darden Restaurants, the Orlando-based owner of more than 1,800 Olive Garden, LongHorn Steakhouse and other chain restaurants, is not experiencing any interruptions, spokesman Rich Jeffers said.
Executives from the Winter Park parent company of Ruth’s Chris Steak House have also been monitoring the volatility in the supply chain at the same time it works to bring its dining rooms back online. Ruth’s Hospitality Group has 86 company-owned restaurants to go along with 73 owned by franchisees.
“The good news is right now we’re not having issues as we reopen these restaurants,” CEO Cheryl Henry said on a Friday earnings call.
As for grocery stores, Lakeland-based Publix set a limit of two packages of chicken across its more than 1,240 locations on May 1. Before that restriction, stores have been able to limit items based on demand.
“Publix continues to work closely with our suppliers to be well-positioned with a variety of product for our customers to choose from,” spokeswoman Maria Brous said in an email. “While not every cut/variety of meat will be available every day, there will be options for our customers.”
At Costco Wholesale, which has three stores in the Orlando area, there is a three-item limit on beef, fish, pork and poultry.
“When you’re seeing say a shortage of meat on your grocery store shelf, it’s not because we have a shortage of cattle, it’s because we have a shortage of open and functioning processing facilities,” said Booth, who also serves on the Osceola County School Board and is running for a spot on the County Commission.
There also are concerns for cattle farmers like Booth about the restaurant industry, which has seen dining rooms shuttered because of the pandemic, and about how soaring unemployment will affect them.
“How many people that normally went to these mid-tier restaurants like an Outback, or a Chili’s or a LongHorn Steakhouse, how many of those kinds of middle-income folks are actually going to be cutting back on going out to eat?” Booth asked. “Again, if our restaurant traffic even stays low as compared to pre-pandemic numbers then that’s going to have a negative impact on the market as well.”
The drop in demand from restaurants already has hurt Florida farmers, who have been forced to leave crops in their fields unharvested. Publix has launched an initiative to purchase produce from farmers to donate to Feeding America food banks, buying more than 1 million pounds of fruits and vegetables and 100,000 gallons of milk as of May 6.
‘Tough times ahead’
Cattle at Doc Partin Ranch south of St. Cloud basked in the sunlight on a recent weekday. The ranch, like most Florida beef cattle producers, is in the business of selling calves to ranches in other states, Booth said.
Florida is at the start of the production chain, which has protected its ranchers from the immediate problems, said Holley, with the Cattlemen’s Association.
“It kind of takes a while for that system to kind of back up and reach us and really affect us in terms of a place for cattle to go,” Holley said.
Over four weeks in April, the number of cattle slaughtered nationally was down about 685,000 compared with the same period last year, according to USDA data provided by Chris Prevatt, a University of Florida Institute of Food and Agricultural Sciences agent who specializes in beef cattle economics.
“How do you get back up to normal levels in this pandemic?” Prevatt said. “How do you increase above normal levels to get those additional animals harvested that you’ve already missed?”
He was also concerned about coronavirus returning later in the year.
“That would cause the same disruptions in these meat-packing facilities,” Prevatt said.
The increased supply of cattle means meat producers don’t have to compete on price for the animals, Prevatt said.
For Doc Partin Ranch, that could mean the value of its calves goes down come late summer and early fall.
At the peak of the market in the last decade, a 550-pound male calf would go anywhere from $1,200 to $1,400, and in the past few years, that number has fallen to $700 to $900, according to Booth.
“People like us that are producing calves, there’s so much volatility and uncertainty in the markets that our price goes way down,” Booth said. “That’s our main source of income.”
While there have been reports that pigs are having to be euthanized, those in the cattle industry said that’s not been an issue for them.
“Most of the time cattle can be raised out on forage pastures,” Booth said. “Cattle can really be taken out of a feed yard situation.”
Holley added no one knows what the long-term economic situation will look like.
“The whole economy across the board, not just in agriculture, is hurting,” he said. “There’s going to be some tough times ahead to deal with and work through.”
He said ranchers would continue to “do our best to continue to provide the safest, most wholesome food supply we can for this country.”