Damage to the U.S. meat industry is piling up fast, from closed processing plants to producers with nowhere to send livestock, to retail customers paying higher prices. Now, market analysts are starting to weigh in.
CoBank analyst Will Sawyer said producer losses are topping anything seen in years.
“Beef and pork, especially, realizing losses well outside of the Tyson plant fire on beef, last August, or the Great Recession, for any of these sectors. So, the stress in the sectors, whether it’s beef, pork, or chicken, is most pronounced today, at the producer level.”
How much help will the $19 billion recently announced by USDA recently offer the livestock industry?
“Unfortunately, very little of that money will go to alleviate the losses of livestock producers, due to the caps of $125,000 per commodity, per entity. Many of the producers that we all know, are well outside of that range and well too large, for that to make too much of a difference.”
More than 150 Congressional lawmakers have written to the administration to find a better formula and more money to meet the scale of losses, likely in the tens-of-billions in meat and dairy. Sawyer said the president’s executive order last week will help processing plants stay open or reopen.
But, now, the issue is labor.
“But how quickly can we rebound? That’s where labor becomes the constraint. With unemployment benefits being as robust as they are today, and those benefits extending through the end of July, labor supply is going to be quite a constraint.”
And complicated by workers’ concerns for their safety despite new federal plant guidelines, which remain voluntary, and promises of testing and personal protective equipment. At least 5,000 workers have gotten sick, while 20 or more have died.
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