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RBC | In the last few weeks no market has been exempt from the “COVID Effect,” including agriculture. Major market fluctuations and unrest coupled with questions about how to conduct business have left many agricultural producers concerned about their future.
Since the pandemic panic hit, the price of live feeder cattle initially dropped $7-20/cwt (a hundredweight is equal to 100 lbs.), but has since regained approximately $4/cwt in the few days. Auctions have reported a significant decrease in the number of cattle brought to auction. However, as grocery stores struggled to restock their coolers the price of box meat (meat that has been fully processed and is ready for retail) has climbed dramatically, fetching as much as $32-50/cwt more than a mere two weeks ago. The drastic difference in prices has caused a number of producers to raise concerns about the disparity between corporate packing companies and ranchers.
For most ranchers spring also brings calving and bull season, when ranchers make long-reaching decisions about their productions by purchasing bulls. As the COVID-19 crisis hit many began watching the bull sales wondering if they could help predict the future of the cattle markets. While many sales have encouraged online bidding, the prices for bulls have stayed stable. On March 19 the Department of Homeland Security designated agriculture a ‘critical infrastructure’, exempting the entire chain of food and agriculture production from current and future restrictions. The declaration from the federal government was advisory in nature, rather than a mandate, however Colorado Governor Jared Polis also listed food and agriculture supply chains as a critical business in his March 23 order to reduce employees by 50 percent. Following Governor Polis’s “Stay At Home” Order issued last Thursday, Colorado Cattlemen’s Association began offering a letter to members confirming their status as agricultural producers, should they need it while traveling around on agricultural business.
Food and agriculture supply chains are considered ‘critical infrastructure’ and will continue to operate during the governor’s stay at home order.
The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act which was signed by President Trump on Tuesday includes $9.5 billion earmarked for the USDA to provide stimulus for livestock operations, including dairy farmers, as well as crop producers. The specifics of what types of programs these funds may be funneled into have not yet been announced.
If the recent weeks have taught agricultural producers anything it’s to hang on, because next week may not look anything like this week.
By Jen Hill | Special to the Herald Times