COVID-19 Impacts on Cattle Markets

In this time of uncertainty, every market is feeling the impact of the COVID-19 pandemic. South Carolina cattle markets are being negatively impacted both in the cash and futures markets. The volume of cattle moving through South Carolina sale barns has been trending lower since the first of the year. USDA’s Livestock Market News reported that in January 11,216 head were marketed through sale barns statewide, the 2009–2019 average is 11,563 head.¹ In February, 8,519 head were reported, roughly 1,500 head short of the February 2009–2019 average.¹ In March, the trend continued as USDA reported 3,417 head were marketed, a 68% decline from the 10-year average of 10,737 head.¹ This has led everyone to re-evaluate their marketing strategies. Table 1 reflects changes from the previous week in overall slaughter and beef production.

Table 1. Cattle production week ending 04-04-2020.

Source: Livestock Marketing Information Center.²

During these unprecedented times, be sure to stay informed of changes and disruptions to your traditional market options. First, make sure you call ahead to your local sale barn to ensure that they are open and that you comply with any new rules or procedures that may be in effect. Many livestock auctions are limiting the number of people who can be present during the sale. They may also be limiting how you can get your check (e.g., only through the mail), and there may be procedural changes to their drop-off policies.

Traditional and seasonal market trends and fundamentals are almost nonexistent as every link in the beef supply chain has seen disruptions. Buyers may be limited in availability to bid on cattle or there may be no market for some animals. Auction markets are limiting the number of buyers to remain open during this pandemic. If an outbreak occurs with market personnel (workers, buyers, etc.) it could not only affect a single location but other auctions as well, since many people travel between barns.

One auction market owner stated, “Exports and restaurants need to open up to increase demand. Packers obviously don’t need our beef therefore, it is cheap. It can be hard to hold onto calves but at least we can hold our cows as long as we have grass. If you have grass do not sell your cattle.” It might be advantageous to delay marketing. Especially if there is available forage that these animals can utilize. Also, there are multiple market forces acting and reacting coupled with minimal data available to predict short-term market behavior.

Alternatives for Cattle Marketing

• Sell live animals direct to consumers. Be prepared to educate consumers about the volume of meat (and potential cuts) from a whole or side of beef. Encourage customers who are unable to utilize an entire order of freezer beef to go in together with family members, friends, or neighbors to purchase an entire animal. Take the live animal to a local, inspected processing facility, and the individual(s) who buy the animal can then discuss with the facility staff what types of cuts they would like.

• Sell your own meat products if you have an approved label with either state or federal inspection services as well as a relationship with an inspected processor. The processing will still need to be done at a federally- or state-inspected facility. Be sure to communicate with processors as reported wait times, aging, and fabrication are not practical for animals currently ready for harvest. The wait times at local processors may be longer than the amount of time you have available before you need to harvest the animal.

Farm Stress Management

We must not forget even in good times, farming and farming activities are stressful for the producer and their family. Under the circumstances that farmers have endured over the past five years in South Carolina and throughout the nation, especially with the present situation, most farmers, their families, and those who are involved within the farming sector are under significant stress. Prolonged stress affects the body physically, physiologically, and mentally. This can lead to several issues including but not limited to being more susceptible to illness, cardiac issues, forgetfulness, family issues, and in some very dark moments, thoughts of suicide. Remember that the farming, agricultural, and rural communities that you are a part of will come together to provide support and assistance when needed. Please check in with your family members, your neighbors, and others to see how they are doing. If you are noticing that you or someone else is under significant stress just remember, it is alright to lean on your community and seek professional assistance.

Supportive resources are available on the Clemson Extension Agribusiness Program website along with a list of phone numbers to quickly connect you with a specific contact. If you have questions related to agribusiness, farm management, or farm stress, please reach out to an Extension Agribusiness Team Member. These times are tough, but our farmers and ranchers are tougher. All of us must do our part to slow the spread of COVID-19 while also keeping our lives moving forward. This is an opportunity to focus on family and explore new opportunities for your operation.

References Cited

1. South Carolina Daily Livestock Reports. Columbia (SC): South Carolina Department of Agriculture. https://agriculture.sc.gov/divisions/consumer-protection/market-news/livestock-reports/.
2. Prices and Production. Lakewood (CO): Livestock Marketing Information Center. https://lmic.info/spreadsheet/prices-and-production.