In the time of COVID-19, the industry has become accustomed to cancelled events and meetings. However, as the agriculture industry often shows its perseverance through difficult times, organizations have adapted and overcome meeting restrictions by holding virtual events instead.
National Cattlemen’s Beef Association (NCBA) is one of the many associations to do so, holding a virtual “Winter Reboot” convention in late February in place of its annual convention and trade show. However, do not despair, as NCBA plans to get back to regularly scheduled in-person business at the annual Cattle Industry Convention and NCBA Trade Show, now to be held Aug. 10-12, 2021 in Nashville, TN.
Winter Reboot
NCBA staff put forth their best efforts to hold an engaging and educational event, and their hard work was rewarded with a successful virtual convention. NCBA members from across the nation were able to tune in and listen to various meetings and sessions—giving those who may not have been able to attend an in-person event the opportunity to be involved.
The two-day event spanning between Feb. 23-24 was full of updates from NCBA as well as educational lectures from event sponsors and industry stakeholders. On Day 1, NCBA staff shared on-the-ground updates from Washington, D.C., including what to expect with the new administration and 117th Congress. NCBA leaders Colin Woodall and Ethan Lane gave an update on the state of the industry, sharing their confidences of NCBA’s ability to operate as a bipartisan liaison between D.C. and the cattle and beef industry.
Day 2 began with a comprehensive CattleFax outlook over global proteins and grain, as well as a weather and drought outlook.
Each day of the virtual convention was chock-full of educational sessions for both the experienced and entry-level rancher, giving a sneak-peek into what to expect during the full convention and Cattlemen’s College to be held later this year.
Always one to strike a balance between business and party, NCBA also held a “honky tonk” happy hour at the end of the convention, where attendees were able to preview some of the things in store at the Nashville event, and enjoy a virtual musical performance.
To register for the August 2021 “Tune in to Tennessee” convention, visit www.convention.ncba.org.
What to expect in D.C.
NCBA CEO Colin Woodall and Vice President of Government Affairs Ethan Lane gave a comprehensive overview over what Washington, D.C. will look like with a new administration and Congress. One of their biggest emphases was NCBA’s ability to work on both sides of the aisle. Lane said moderates in Congress are really the ones with control in D.C., so it’s important to expand relationships with them.
“Agriculture is bipartisan,” Lane said. “This is about feeding the country and healthy rural communities—there is no place for partisan warfare.”
Woodall added that President Joe Biden’s past experience as a vice president and senator has given him experience on how to build coalitions and negotiate.
“This will be important to keep the AOCs of the world at bay,” Woodall said, referring to Rep. Alexandria Ocasio-Cortez (D-NY-14).
The two leaders also discussed Rep. David Scott’s (D-GA-13) appointment as chairman of the House Agriculture Committee. Woodall said Scott has been a “tremendous friend” to the industry and has always looked out for beef producers. He thinks Scott’s friendliness to the industry will carry into his role as chairman, which will allow NCBA to have a better relationship with the Congressional Black Caucus.
“We are going to have coalition friends we haven’t had in the past,” Woodall said.
Woodall and Lane also reviewed the impacts of having Sen. Cory Booker (D-NJ) on the Senate Agriculture Committee.
“We know he is an outspoken vegan who wants to put animal ag out of business,” Lane said. “He’s going to play a role we may not have seen on the committee before.”
However, he also noted Sen. Deb Fischer (R-NE) has begun working with Booker. Although the two “don’t see eye to eye,” Fischer wants to get him out in Nebraska on the ground to understand where he may be wrong in his beliefs about agriculture.
And, “At the end of the day, he’s only one vote,” Lane said.
Woodall and Lane also stressed the importance for producers to take thorough records and photos to document losses from recent winter storms. This will quicken the process for receiving government aid through USDA disaster programs.
Regarding Coronavirus Food Assistance Program 3 (CFAP3) payments, Lane said it will be 30-40 days following USDA Secretary Tom Vilsack’s appointment at the earliest before producers can expect aid. That is about the time it took for USDA to conduct a rulemaking for the first round of CFAP payments. Lane said producers should expect the program to include something for every class of cattle on inventory from last spring.
Lane also spoke on the status of NCBA’s voluntary approach to achieve price discovery and encourage cash trade.
“We will analyze the best data from our land-grant universities to tell us how much negotiated and cash trade is occurring, where it’s occurring and whether, week over week, it is happening in a way that gives us a sense as to whether we have the robust trade we need, to have price discovery,” he said. “Once the first-quarter data is in, the group [NCBA’s Cattle Markets Working Group] will look to see if any triggers were tripped in different regions. This will inform how we move forward.”
CattleFax outlooks
Randy Blach, CEO of CattleFax, said in his Wednesday morning presentation that beef demand is the highest it has been in 30 years, with sales volumes up 10 percent and retail volume up 18 percent, or nearly $6 billion. Blach attributes it to more consumers eating at home, making up for the closures in the foodservice industry. He commended the ability of packing plants to recover after both the Holcomb, KS, fire and COVID-19 to meet the demand, and to increase production on Saturdays.
Blach stated in the next 24 months, the unemployment rate will lower as more people get vaccinated, but the rate of inflation and the cost of goods will increase. Cattlefax anticipates the GDP will gain around 6 percent depending on the rate of vaccination and how fast the economy opens around the world post-COVID-19. Blach stated that the government data suggests agricultural loan repayment defaults are at their lowest levels since 2014. The outlook for the agricultural economy is a higher demand for proteins, grains and energy over the next three to four years.
Mike Murphy, CattleFax vice president of research and risk management, said USDA lowered the number of acres planted to corn from 97 million acres to 92 million acres, and the dry summer of 2020 lowered the yield by 6 bushels per acre, which had an impact on the supply of corn. Murphy noted the demand sector was increased for the export market by 600 million bushels. As a result, commodity prices for corn have increased since spring 2020. Murphy said with the large numbers of cattle on feed, the industry will continue to see a lot of usage of corn.
As the economy recovers post COVID-19, Murphy anticipates the supply of corn will continue to decrease, as there will be more demand for ethanol and China has committed to purchasing 2.6 billion bushels as part of the Phase One trade agreement. China is also purchasing a large number of soybeans, leading to a tightening supply of both commodities, and it will be difficult to predict the amount of corn and soybeans that will be planted this year. Adding to the uncertainty is the anticipated lower soybean harvest production numbers in South America due to La Niсa.
Kevin Good, CattleFax vice president of industry relations and analysis, stated beef production numbers were higher in the last couple years due to higher weights and the utilization of dairy heifers. However, the cattle inventory numbers were lower in 2019-2020 by 1.2 million head and CattleFax anticipates the inventory numbers to decline by 200,000 for 2021 and another 350,000 in 2022.
Good stated that production numbers are anticipated to be mixed with beef increasing by 1.7 percent to 4.7 million pounds and pork down 1.5 percent to 420 million pounds in 2021. He said trade will be an important issue for the coming year and suggested there will be year-over-year gains in the export market, and the strength of Asian currencies over the U.S. dollar makes exports more affordable.
Beef demand
Purdue University Agricultural Economics Department Head Dr. Jayson Lusk was the event keynote speaker, and he analyzed the impacts of COVID-19 on beef demand. Lusk will also be a keynote speaker during the August event, where he plans to assess the future outlook of beef demand, including impacts of plant-based alternatives and lab-grown fake meat.
In his virtual presentation, Lusk discussed the impacts on the supply chain from COVID-19, which caused wholesale beef prices to skyrocket. Lusk emphasized that even throughout the turbulent shocks over the past year and the initial increase in beef prices, demand for beef still remains quite strong.
He also noted, “If we can get some of the restrictions that are in place because of the coronavirus out of the way, we may see a huge increase in consumer spending.” Consumers are eager to travel and go out to eat, which will likely further boost demand in the upcoming months.
During a Beltway Briefing during Day 1, Kent Bacus, NCBA senior director of international trade and market access, also spoke on beef demand and the U.S. trade front. He noted U.S. beef demand has never been higher, and the U.S. has secured trade victories in the past few years to capitalize on strong demand from other countries.
Asian markets in particular have had a strong demand for U.S. beef. Developing a market in Korea has been in the works for several years, and China is an ongoing work-in-progress to address non-tariff and tariff barriers. China is typically a $10 billion market for meat and poultry, but total import value stretched to $28 billion last year, Bacus said.
He added that the U.S. is going to focus on securing greater access with the United Kingdom and African countries. — Anna Miller and Charles Wallace, WLJ editors
