Beef Buzz News
"Just in Time" Efficiency in Meat Processing a Weakness in Beef Pipeline During Pandemic
Wed, 09 Feb 2022 10:13:16 CST
The cattle U.S. beef industry has struggled for more than two years, set back first by the processing plant fire in Holcomb, Kan. and then by the COVID-19 pandemic months later. Don Close, a senior animal protein analyst at Rabo AgriFinance, breaks down how our beef supply chain weakened in the years leading up to this with Ron Hays, the senior reporter for the Oklahoma Farm Report.
"I think it is a longer-term situation," Close said. "For 20 to 25 years, we were focused on increasing the efficiency throughout the system. Through that efficiency, we were using the input to reduce the price of beef to consumers."
Looking at the backlog of cattle the industry dealt with in 2020 and 2021 in that long-term context, Close said the supply chain may have become too efficient.
"It may be time to take a step back and look (at the beef supply chain)," Close said. "Do we need to build more insurance into the system to avoid the risk of another round of empty store shelves?"
Close is not the only one keen on improving America's food supply chain. The Biden-Harris administration has put forth the Biden-Harris Action Plan for Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. The Plan includes $1 billion in American Rescue Plan funds for the expansion of independent processing capacity. Close is not convinced that that is the answer though.
"I have a tremendous amount of trepidation on if that is the (best) way to handle this," Close said. "I do not think the big four packers are the villain in this situation. If $1 billion goes to increasing slaughter capacity and at the same time, the cattle inventory report shows our cattle supplies are cyclically contracting, there will be a great deal of challenges for someone trying to enter the industry."
Close said beef demand isn't subsiding at all. In the Southern Plains, producers who can navigate the drought will be set up to take advantage of excellent beef demand.
Click on the LISTEN BAR below to hear more from Ron Hays and Don Close as they talk about growing pains within the U.S. beef cattle industry.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Our coverage on the Oklahoma Farm Report of the 2022 Cattle Industry Convention and the NCBA Tradeshow is sponsored by Performance Beef from Zoetis. Performance Beef simplifies feed, performance and health data collection, without double data entry or complicated software. Track feed, generate real-time closeout reports, create accurate invoices, record health data at the chute, in the pen or pasture; or analyze performance trends - all in one place with ease. Try the app for yourself by clicking here.
Listen to Ron's conversation with Don here.
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