Meat supply chain runs into problems
Kinks could mean grocery shortages, trouble for state’s ranchers
Rancher Janie Vanwinkle has a gnawing feeling that when she’s ready to sign a deal this summer to sell her calves, she could see the price she gets drop by as much as 50%. Lee Leachman is looking at discounting the bulls he sells for breeding by about 20%.
Denver chef Bo Porytko, who runs Misfit Snackbar in Denver, went looking for beef at the Restaurant Depot last week and found mostly empty shelves at the warehouse.
“It was like people were immediately doing the toilet paper thing,” Porytko said.
From the start of the beef supply chain to the end, COVID-19 has created kinks that, if not straightened out, could lead to limited selection in grocery stores, higher prices for restaurants and consumers and some Colorado ranchers shutting their gates for good.
The biggest obstacle is in the middle, where the cattle are sent to feedlots for about 150 days and then to slaughter. Big plants in Colorado and across the country that typically process thousands of cattle a day have gone through temporary closures or greatly scaled back as the novel coronavirus swept through the workforce. Thousands of workers nationwide have been stricken, and at least 20 have died.
Seven workers at the JBS plant in Greeley have died from the coronavirus. The Cargill meatpacking plant in Fort Morgan reduced operations in April after an employee died from COVID-19 and others became sick.
“The first thing that has to happen is we have to get the workers healthy and make sure that they’re safe,” Vanwinkle said. “But I am telling you, I have big concerns about the future of ranching in Colorado and other places as well.”
In the past couple of years, the Vanwinkles got $1.55 to $1.60 per pound for their calves, or about $1,000 for a 6- to 8-month-old animal delivered to the feedlot. This year, Vanwinkle fears the per-calf selling price could drop by half.
Feedlots are filling with cattle waiting to be processed while meatpacking plants run at reduced levels because of virus outbreaks.
Beef plants across the country on average are running at about 65% of capacity, said Keith Belk, head of the Department of Animal Sciences at Colorado State University. He said there are signs the companies are getting a handle on ways to protect workers and will start increasing production.
“That said, I don’t see them coming back to full capacity for a long time,” said Belk, who is worried about the fallout for the feedlot owners and associated businesses, such as trucking companies and veterinarians.
As the plants further separate work spaces to stop the spread of the coronavirus, they can’t bring in all of their employees, he added. And some people aren’t at work because they’re ill or considered at risk for getting ill, Belk said.
President Donald Trump signed an executive order in late April to keep meat processing plants open by declaring them “critical infrastructure.”
Consumers are likely to find it harder to find certain kinds of cuts of meat at certain points, and that will vary by region, Belk said.
“When you have a supply chain shock like this, it’s going to have a huge impact. People in the industry are saying the last time there was anything like this in the United States was World War II,” Belk said.
Kate Greenberg, the Colorado agriculture commissioner, doesn’t anticipate widespread beef shortages in the state. Colorado ranks fourth in the nation for fresh and frozen beef exports and for the number of cattle processed, annually producing about 2.85 million cattle valued at $3 billion. In Colorado, there are millions of pounds of meat in cold storage, she said.
However, Greenberg noted that stores are starting to limit the amount of meat people can buy.
Weaknesses in system
A King Soopers spokeswoman said the chain has temporary limits on the number of packages of fresh ground beef, poultry and pork customers can buy.
“But from all we can tell from all the work we’ve been doing and conversations we’ve been having with partners across the country, it is very much parallel to the toilet paper deal,” Greenberg said. “People see weaknesses and vulnerabilities in the system. They feel a sense of anxiety that they need to buy much of that product, and then you see empty shelves, which is a reinforcing cycle.”
Shoppers likely will see higher prices in the stores, but the U.S. Department of Agriculture recently said the increases should be slight, from 1% to 2%. A pound of lean ground beef averaged just less than