Beef Cattle Considerations Amid COVID-19
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As we have seen over the past two months, the COVID-19 pandemic has had a very large impact on the volatility of beef cattle prices. Many beef producers are wondering if they should sell now or hold on for higher prices. There is no clear answer to this dilemma. In short, the decision to hold or sell depends on the operation, cash flow needs, marketing options, and other factors.
The US beef industry is controlled in large part (85%) by four major packers. These packers include Tyson Foods, Cargill, JBS and National Beef. Some of the volatility of beef prices can be attributed to health concerns and impacts among the labor force utilized by these packers, but also demand of foodservice beef. Beef is an unsubsidized commodity and we rely on competitive markets to maintain prices.
So, what should we do as beef producers in this market? Unlike many other agriculture commodity markets, the beef market has a greater ability to manage market disruptions. Some beef producers must sell due to cash flow needs, others can hold on to the current calf crop for several months. The larger producers must look to increase efficiency in feed rationing until cattle are sold, this can be done by
changing the net energy of feed or utilizing more pasture. These producers are encouraged to keep a check on market prices and sell as soon as prices rebound, to keep weight maintenance costs as low as possible. For Cow-Calf operations and Stockers, utilizing as much grass as possible will be essential for 2020. Rotational grazing and utilization of summer annuals can greatly enhance forage productivity and weight maintenance efficiency.
Finally, the National Cattlemen’s Beef Association advises that it may be beneficial to step back the potency of the implant program for cattle or consider skipping the terminal implant for cattle at the growth stage when they would normally receive it in order to limit the rate of gain and reduce the negative impact in quality grade if a lower energy holding ration is fed to cattle within 100 days of harvest.
I have compiled a list of resources containing information on cattle care and management during the cattle market disruptions associated with the COVID-19 pandemic. I can send you a complete list via email. These resources can help you decide your best marketing strategy amid this pandemic. For a list of these resources or to discuss your beef cattle operation, feel free to email me at firstname.lastname@example.org
Mitch Williams is the Agriculture Agent – Field Crops, Livestock and Pesticide Coordinator for North Carolina Cooperative Extension in Lee County.