Ethan Lane, vice president of government affairs, National Cattlemen’s Beef Association, held a conference call for media March 18. He noted the team has been “focused exclusively” over the past week on the unfolding COVID-19 situation, specifically its impact on the United States cattle industry.
“From the beginning of this situation and moving forward to today, our continued top priority remains ongoing operation of the full beef supply chain,” Lane said. “Our role in that is essential to ensuring the grocery store shelf stay full of beef for American consumers.”
The White House and others have said the unfolding pandemic situation shows how important food security is to the U.S.
“In order to achieve that goal, we need to ensure that we have regulatory certainty throughout the value chain to continue operations,” Lane said. “Not just from the end of the of the supply chain, from the packing plant to the retail sector, but all the way through that value chain the feedlot, on back to cow-calf.”
This also must include transportation inputs and other moving pieces of the equation that allow the product to get from gate to plate. Lane and others have been engaging with decision makers throughout the federal government to assure producers they will be able to operate in this environment.
“We’re pleased that we have heard a lot of positive feedback from the administration, in order to ensure that that value chain that supply chain stays operational,” Lane said.
Lane was pleased to hear the U.S. Department of Agriculture is taking steps to ensure inspectors from Food Safety and Inspection Service, Animal and Plant Health Inspection Service, Agriculture Marketing Service, and others will be able to continue their important work, ensuring that that supply chain is moving.
“We are continuing to work with them as they develop their pandemic response plans or update their pandemic response plans,” Lane said. “In order to make decisions as far as how they’ll deal with staffing should it come to a point where they start having positive cases in those in those workforces we’re continuing to have those conversations this afternoon, and looking for updates from them as they as they formulate those plans.”
Similarly, NCBA is working with the Department of Transportation.
“We are pleased to hear that they recently announced an hours of service emergency waiver for commercial trucks, including those delivering food products,” Lane said. “This announcement is helpful for us and we want to make sure that that is extended to include the drive time that is necessary throughout the livestock supply chain.”
That is one of those issues to ensure U.S. beef producers can continue to be operational during this time.
“To make sure that we get resources where they need to be to keep that food supply moving,” Lane said.
Markets
NCBA is also monitoring the markets.
“Obviously we’ve seen quite a bit of price fluctuation across all of the U.S. financial markets,” he said. “This is this is not an issue that is exclusive to the U.S. cattle markets, but our producers have been hit extremely hard on the live cattle side in this equation.”
He said NCBA will continue to stay engaged in what the markets are doing to ensure the group can help producers stay viable during this crisis.
“We have sent a letter encapsulating the needs of our industry in our ongoing situation to the White House to Vice President (Mike) Pence,” Lane said. “That letter goes into the issues I’ve just covered here as far as where our focus remains to protect that supply chain.”
NCBA included in the letter its concern for the ability of 22,000 western producers to be able to turn cattle out on federal western lands, as the grazing season starts very soon.
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NCBA officials are also monitoring the unfolding status on Capitol Hill as they pass the “coronavirus 2” stimulus package and move onto what they understand to be a third package. They sent sentiments to the White House, outlining the needs beef producers are going to have as far as financial coverage goes as the crisis moves on.
“In our opinion, and in our request to the administration, we have asked that they look for additional avenues for flexibility in order to reduce the burden on our producers for existing loans and interest requirements,” Lane said. “As well as access to new funds and capital at low or no interest rates to ensure that they have the operating resources necessary to sustain their operations during this during this disruption.”
Concerns
Lane is concerned about debate on Capitol Hill and is watching various proposals that have come up in discussions.
“We’re spending a lot of our time at the moment analyzing those proposals and gauging whether or not they’ve got a viable chance at this kind of package,” he said. “Obviously when we get the numbers like are being debated here, these tend to be quick, pretty weighty packages and our focus is going to remain on ensuring that agriculture and the cattle industry in general are taken care of and protected in any package that may move forward.”
Lane was questioned as to whether there have been any discussions regarding the H2A visas.
“Labor was an issue before this came up,” Lane said. “Labor is always challenging in the agriculture community on the market side.”
NCBA is hearing from producers across the country the spread between box prices and live cattle prices don’t reflect the reality on the ground.
“We’re seeing a lot of increase in price in the box,” he said. “Besides we’re seeing those pictures on the news that have cleaned out store shelves.”
Beef is a commodity that is in high demand at the moment, and the prices on the boards on the live cattle side are not reflective of that, Lane said.
“That is an issue that we’re continuing to monitor,” he said. “There’s been an ongoing issue with adequate price discovery on that cash side to give us an accurate picture of what’s going on in the marketplace and certainly we’re seeing that play out.”
Lane said NCBA has engaged packers in conversations the past few days, talking about the disparity and asking them to make sure they’re bidding aggressively in the cash market.
“And making sure that they’re putting those bids off of what we’re seeing on that cut out price,” Lane said.
Markets continue to be concerning, especially with the closure of the Canadian border to visitors. Lane was asked if they had any concern about export markets being hampered by the global pandemic.
“Our understanding is that there will not be a disruption to cross border trade in our industry as a result of that,” Lane said. “We’ve spent some time today, checking in with our trading partners in other parts of the world as well. We’re not foreseeing any, any issues on that front at this point.”
NCBA will continue to monitor the cross-border trade, as they are with live marketing options for cattle. Sale barns and livestock auctions are concerned with the gathering restrictions cap. Lane said it’s no more than 10 in Washington, D.C., and 50 or 25 in some states.
“We’ve seen different numbers from the federal government and from different states and regional governments and, as you know, what we’re continuing to hear is that that’s federal government, that White House designation of food security as being exempted from that should apply to our ability to do business in our supply chain as well,” he said.
The livestock sale markets and the Livestock Marketing Association are taking steps to minimize human contact to whatever degree they can.
“We obviously stay in close contact with them as we do with all of our partners throughout the industry,” Lane said. “I know that’s an issue they’re focusing on today—specifically wanting to make sure that they don’t see a disruption there but from all from all indications, the exemptions that we’re seeing for those kind of gathering restrictions would fit pretty squarely in our industry.”
Lane said it’s essential for these live markets to stay open if people want to sell their cattle.
“We don’t believe that that would be prudent at this time,” he said. “We need the market to continue to operate. We just need to make sure that it’s operating in a way that’s reflective of what’s happening on the ground.”
Lane couldn’t offer any large-scale projection number as far as losses, as it’s still pretty early to have any predictions.
“I would continue to assert that we’re seeing pretty robust demand for our product,” Lane said. “Sales are high. We’re seeing store shelves cleaned out, so I mean the American consumer is clearly looking for beef to fill their freezers. We want to make sure that we’re there to provide it for them.”
Kylene Scott can be reached at 620-227-1804 or [email protected].
