Farmers seek solutions as beef, pork pipelines slow

Tuesday, April 28, 2020
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Editor's note: Gov. Kim Reynolds said Wednesday, April 29, she expects to be in contact with Vice President Mike Pence to discuss specifics regarding an April 28 executive order signed by President Trump. The order directed the Secretary of Agriculture to ensure that meat and poultry processors continue operations under guidelines from the CDC and OSHA. This story has also been edited to make an estimate on the number of cattle in northwest Iowa more clear.

With recent outbreaks of COVID-19 causing production cutbacks at several Midwest meat packing plants, Iowa producers have fewer options for cattle and hogs that reach market size.

Dave Stender, swine specialist with Iowa State University Extension and Outreach, explained the pork industry's flow depends on waves of mature animals being taken to market when they reach a certain size.

"If they get too big, the processing line can't handle them," Stender said. "Then you've got to go to a plant that handles bigger animals."

Beth Doran, beef specialist with ISU Extension and Outreach, said beef production isn't on quite as rigid a schedule as pork, but she said any closure of a beef packing plant can cause a domino effect, and she feels recent closures have caused a processing bottleneck.

"Some are shut down indefinitely, some a week or so for deep-cleaning, some running a reduced number of shifts," Doran said. "All of this is related to their workforce numbers due to COVID-19 illness."

Doran said beef farmers typically have two options if they are unable to get their cows to market — sell them or hold them.

"The risk of (holding) is determining if the plant can take them and/or how soon the market will recover," Doran said. "With more days on-feed, the carcasses become bigger and fatter, and there are packer discounts for carcasses weighing more than 1,050 pounds and also for fatter carcasses."

The viral outbreaks came as the Iowa pork industry was ramping up production to sell to China, according to Stender, but without packing plants to process the pigs, producers are being left with a hefty headcount.

"That's the sad part," Stender said. "We were in expansion mode, so it's kind of a double-whammy now. China's still buying a lot of pork, only now we can't get it to them."

CLOSURES, CUTBACKS AND NUMBERS

A large portion of northwest Iowa pork producers typically sent their hogs to a Smithfield Foods plant in Sioux Falls, South Dakota. The company announced at the beginning of April the Sioux Falls plant would be closed and cleaned due to concerns over COVID-19. On April 12, the company decided to keep the plant closed until further notice. Smithfield said the facility is one of the largest pork processors in the country, employing around 3,700 people, producing 18 million servings of food each day and making up about 5 percent of the nation's pork production. Iowa is the nation's top pork producer, according to Gov. Kim Reynolds, supplying around 25 million hogs each year for a third of U.S. production.

Stender estimated about a quarter of the Sioux Falls plant's hogs come from Iowa — with about half coming from South Dakota, and the other quarter from Minnesota. He noted that means a little over 1 percent of the country's hogs are both produced in Iowa and processed in Sioux Falls. Stender said northwest Iowa produces about 10 percent of the nation's hogs, and Duran said the 17 northwest Iowa counties she serves are home to more than 1 million cows – 86,300 beef cows and 64,100 dairy cows.

"It's an engine," Stender said of the state's agricultural industry. "Manufacturing, mining and agriculture are foundational, wealth-creating industries. You start losing them, and all the rest of the jobs that build off of those will follow. It's important economically. Otherwise, we'll all go back to subsistence farming. If the farmers aren't successful, we'll go back to 90 percent of us growing food again."

And some processors have begun to see the supply run dry as of late.

Nathan Forbes, owner of Forbes Meat Processing, said his company has seen about a 60 percent drop in its meat supply. The company doesn't provide butchering services, but it does supply a handful of local restaurants in addition to the company's locations in Harris and Spirit Lake. Forbes expected a shipment of meat early this week, but beyond that he said they aren't sure when the next one will come.

"We're going to be hurting for sure with nothing to sell, and the meat we do get is going to be really expensive," Forbes said.

Stender said the large processing plants often coordinate with one another to keep production steady when issues arise but, with positive cases of COVID-19 popping up at plants in Waterloo, Tama and Columbus Junction, many producers are selling their sows to halt breeding and prevent further losses. Even some of the smaller local facilities are temporarily closing out of an abundance of caution. Redwood Farms Meat Processing in Estherville announced April 20 it would suspend operations indefinitely after a single employee tested positive for COVID-19.

"The situation is we've got more pigs than we have places to harvest the pigs right now," Stender said.

SHIFT IN THE MARKETS

Doran feels a mid-March spike in boxed beef prices — like that sought by Forbes — was due to consumers panic buying dry goods and food as the viral outbreaks spread. Gov. Reynolds ordered dine-in restaurants to close during the pandemic as part of a mid-March declaration. Doran said the restaurant trade ended up directing its suddenly excess supply to grocers if possible — though she noted size, cut and thickness vary between grocery store meats and restaurant supplies.

"This extra meat increased the supply of beef, which quickly filled retail demand at the grocer level," Doran said "This meant that distributors did not need to purchase as much beef. This was reflected temporarily in cattle prices. Packers still had a supply of cattle standing in the feedlots, but not as much demand for beef going out of the plant."

But while the processing plants are seeing a downturn in production, some local lockers are experiencing an uptick. Chris Kraft, president and owner of Ruthven Locker, said this time of year is typically a lull for his business. Not so this month. The locker has locations in both Ruthven and Spirit Lake, and Kraft's crew is butchering 13 cows and 10-12 hogs per week — about double their typical April production.

"I'm looking at trying to hire at least two or three more guys," Kraft said. "I can butcher every day and still cut up every day. That's how busy we are. We're just trying to keep up."

The U.S. Department of Agriculture announced Saturday it is launching a National Incident Coordination Center to support producers whose animals can't be sent to market because of COVID-19 related closures. The USDA's Animal and Plant Health Inspection Service is expected to help identify alternative markets and, if need be, "advise and assist on depopulation and disposal methods."

Gov. Reynolds said earlier this month some farmers may have to resort to euthanizing their animals if the industry can't move animals fast enough, which she said would be potentially devastating for the food supply chain and future costs. Stender said, while pork producers sometimes need to euthanize their hogs to stop the spread of disease or end physical suffering, it can take an emotional toll on farmers.

"Their livelihood is keeping pigs alive," Stender said. "You're investing your life in this and then lose them at the end. I just can't imagine, but you can't let them get too big either. It's a rock and a hard place. Hopefully we don't have to get to widespread euthanasia."

And with such a need potentially on the horizon, there comes the possibility of home butchering. Kraft said a number of producers butcher their own animals from time to time. He said it's not necessarily a risky decision, so long as the meat is stored quickly — some producers have their own walk-in coolers to stow the meat immediately, Kraft said. If not, the meat may become unsafe for consumption. In addition, he said home butchering saves the meat from winding up in a rendering truck to be used as byproduct or another secondary purpose.

The issue of euthanasia isn't weighing as heavily on the beef market, according to Duran. She said beef farmers are more likely selling heavy cattle at a loss, not refilling empty pens until markets improve or adjusting the cattle's diet to slow their growth until they are sold. The Iowa Beef Center is offering a webinar Wednesday on adjusted diets for cattle, and Stender said ISU researchers recently offered a similar solution for pork producers. He said the pork research is relatively new and looks at adjusting factors like the amount of fiber in a hog's diet.

"They're used to getting carbs from corn, so they grow fast on corn," Stender said. "If you pull out the carbs and put fiber in, that's by far the best situation."

Stender said material on the new diet research is posted on the Iowa Pork Industry Center's website, and he expects more data will be available in the weeks to come.

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