The impact of COVID-19 has toppled the markets in the last two months. The suspension of packing plant operations and rising employee absenteeism due to the corona-virus outbreak has exacerbated an existing harvest facility capacity challenge due to a labor shortage in rural America.
Dr. Dermot Hayes, an economist with Iowa State University, and Dr. Steve Meyer, a pork industry economist with Kerns & Associates, estimate that hog farmers will lose nearly $37 per hog, or almost $5 billion collectively, for each hog marketed for the rest of the year. Prior to the COVID-19 crisis, and after two challenging years, hog farmers were generally expecting a profitable year, with industry analysts forecasting earnings of approximately $10 per hog on average for 2020.
Cattle markets are also facing tough times. A study released yesterday estimates cattle industry losses as a result of the COVID-19 pandemic will reach $13.6 billion. The study shows cow-calf producers will see the largest impact, with COVID-19-related losses totaling an estimated $3.7 billion, or $111.91 per head for each mature breeding animal in the United States. Stocker/backgrounder segment losses were estimated at $159.98 per head, for a total economic impact of $2.5 billion in 2020, while feeding sector losses were estimated at $3.0 billion or $205.96 per head.
“This study confirms that cattle producers have suffered massive economic damage as a result of the COVID-19 outbreak and those losses will continue to mount for years to come, driving many producers to the brink of collapse and beyond if relief funds aren’t made available soon,” said National Cattlemen’s Beef Association CEO Colin Woodall.
Woodall pointed out that relief funds that were meant to provide aid directly to cattle producers were divided among multiple commodities, many of which already have government programs in place to support production. However, cattle producers have always maintained their independence from government programs, and most operate today without the safety net others enjoy.
The hog sector is also seeking some relief funds. At a press briefing yesterday, the National Pork Producers Council (NPPC) outlined the crisis as described by producers and the immediate relief they are requesting from the administration and Congress. In their outlined plan, NPPC has requested over $1 billion in pork purchases by the USDA to clear out a backed-up meat supply, supplementing agency food bank programs facing increased demand due to rising unemployment. “We remain committed to supplying Americans with high-quality U.S. pork, but face a dire situation that threatens the livelihoods of thousands of farm families,” said NPPC President Howard “A.V.” Roth. “We are taking on water fast. Immediate action is imperative, or a lot of hog farms will go under.”
NPPC is also seeking a legislative fix to emergency loan programs that have left farmers behind. NPPC urges Congress to increase the cap on qualifying businesses to those that employee up to 1,500 and to make agricultural businesses eligible for the Economic Injury Disaster Loan program.
Northern Ag Network – 2020