What a depressing week it’s been for cattle markets! I don’t think they have been this low since the turn of the century. I turned on my computer last Thursday morning to see the futures trading in expanded limit territory. April feeders were trading at $112.
Then I turn on Superior Livestock Auction to see what they are getting done. Regular 800-lb. steers were having a hard time bringing $100. The NHTC naturals were bringing $112. It’s amazing that this pandemic has gripped the world as it has and ripped the value out of the cattle business. In January, April feeder futures were trading at $150, then they slipped down to $107 mid-March. They recovered about $10 last week, then were down to $112 Thursday. The feeder cattle futures were a bit worthless.
If you don’t have to sell those cattle assets right now, don’t. Time is a cattle owner’s best friend. And while we’re on it and you’re currently calving, you might want to think about choosing your marketing program for your fall calves, specifically your production protocol. Do you want to sell them through Angus Link or do you want to go for the NHTC, Gap 4 natural markets? If you sell your fall calves on the big summer videos, you should have these things figured out soon. When you turn the bulls out, figure out your marketing attributes. This appears to be one of those years where just selling a commodity won’t do. Program cattle bring more money.
This virus is starting to hit a little closer to home every day. The food business is an essential business and we’re thankful. NCBA worked hard to keep inspectors in packing plants and truckers on the road but what about workers in packing plants? Two packing plants in Alberta, Canada closed because of coronavirus. JBS slowed production at its Souderton, PA plant.
Several hundred workers at the JBS USA meat processing plant in Greeley, CO called off work last week as a handful of cases of the coronavirus were confirmed among employees.
About 500 people called off in the morning and another 400 did not go to work in the evening, said Kim Cordova, president of the United Food and Commercial Workers Local 7, a union that represents about 3,000 JBS USA employees at the Greeley plant.
Cameron Bruett, a spokesman for JBS USA, said only 800 employees called off work Monday. He said that typical Monday absences have hovered around 500 since schools closed earlier this month but that yesterday saw an additional 300 people stay home.
The uptick in absences comes as at least six employees tested positive for the novel coronavirus, Cordova said. The union is investigating why the hundreds of employees decided to stay home Monday. That’s easy: They are scared, and don’t want to die.
The federal government has made their intentions clear. Stay at home for the next month. They learn more and more about this pandemic episode every day. The modern world has never seen anything like it, and nobody knows much. And you’re a hero in the medical business trying to treat everyone. The perplexing thing is that it’s affecting more people under 40 years old than the senior crowd.
But it is crucial for our industry to keep the pipeline full of beef. These packers made a lot of money last year and 2020 is getting off to a good start. It takes a lot of people to run these plants, and they work close together, especially on the fab line where they are shoulder to shoulder. The packing companies know they need to do something different to keep them safe, like plexiglass dividers on each cutting station. They need serious biosecurity and will have to slow line speeds as well.
Can you imaging what a 15 percent slowdown at our beef processing plant would do? Perhaps more than we’re seeing right now. Beef prices go higher and cattle prices go down. We just can’t let the beef supply lines slow down much.
This coronavirus episode is going to change a lot of things. The online delivery companies have received a big boost from shipping food stuffs. Could this force change in how we market cattle or sell beef? An event like this could change a lot of things like marketing. Perhaps this industry should make marketing changes in the wake of this corona crash. — PETE CROW
