What does COVID-19 mean for consumers as farmers grapple with plant closures

Photo by Catrina Rawson

The novel coronavirus outbreak has disrupted the nation’s food supply chain, resulting in increased prices for panicked shoppers and major losses for Illinois farmers. The usual rules of supply and demand between farmers and consumers have been disrupted by a problem with processing plants and slaughterhouses.

Meat processing plants are considered critical infrastructure and have remained open. But with several commercial packing plants in Illinois closed or working at a reduced capacity, thousands of cattle and pigs are waiting to be processed. Small-scale regional processors are still operating, but most are booked well into fall.

COVID-19 cases within the workforce have forced plants to close to follow Centers for Disease Control recommendations for cleaning and inspections. Some staff are simply not reporting out of fear of getting sick.

The beef cattle industry nationwide is projected to lose $13.6 billion due to COVID-19. Those who can find a buyer are taking losses of $146 to $216, with reports as high as $700.

Livestock managers can use different feeding strategies to hold animals at a certain weight or slow gain until processing plants are ready.

However, producers may not be prepared for the extra costs of holding and feeding market-ready animals. At southern Illinois’ Dixon Springs Agricultural Center, recent dry falls and cool, wet springs reduced the quality of local hay.

As food budgets shrink, consumers are buying less expensive cuts, such as hamburger, resulting in less profit for producers.

“There’s not a place to market our calves, so we continue to hold them with grass and hay and get them to weights a little heavier than usual,” said Cass-Morgan County Farm Bureau Board Director Dale Hadden of Jacksonville. Hadden is looking to September to sell most of his 280-head herd.

“If this doesn’t turn around, that’s going to have a huge impact on how I generate any income,” he said.

U.S. dairy consumption includes 60% of butter going to restaurants. Sales of food service dairy products plummeted when schools and restaurants closed.

The Illinois pork industry contributes an estimated $13.8 billion to the state’s economy, according to the Illinois Pork Producers Association. As of April 28, pork processing plants were working at a 60% capacity, said Toni Dunker, price risk manager with Advance Trading, Quincy. Holding market-ready swine also means there are fewer places to raise piglets, reducing the future supply, Dunker said.

With 6 million laying hens, Illinois is considered a small commercial egg producer. Wholesale egg prices jumped from 94 cents to $3.01 a dozen from March to April. Consumer demand for eggs skyrocketed, and grocery stores limited purchases.

There has also been a disruption in the supply of cartons. Demand was so high, and with only two or three companies that make these cartons, they couldn’t keep up.

Egg plants have not experienced shutdowns as have pork and beef processers because the plants are highly automated with fewer workers. Given the shortage of dozen-sized cartons, eggs are stockpiled at plants on 30-count flats usually sold to restaurants. Now, some eggs may be sold in generic, unlabeled cartons.

Illinois does not have any commercial poultry processing plants, so chickens and turkeys are trucked to Iowa or Indiana. Illinois farmers contract to raise 5 million turkeys annually and have scaled back poults by 15%.

As for what’s next, beef and pork suppliers have a backlog of frozen product making its way onto shelves, but there may not be as much variety as previously. Some stores are limiting meat and egg purchases to prevent stockpiling.

Illinois ranks third in the nation for farmers’ markets. Most markets are opening this month with new regulations in place. Shoppers can find locally produced meat or buy a side of beef directly from a local butcher.

“It gives us a nice market to move some of our animals,” said Hadden, whose direct sales already doubled this year.

Travis Meteer serves as a University of Illinois Extension commercial agriculture educator; Teresa Steckler serves as a U of I Extension commercial agriculture educator; and Ken Koelkebeck serves as a U of I animal sciences professor.