All industries are being affected by the global pandemic, and ranch owners are no different. We have been paying particular attention to the impacts on cattle and sheep given our expertise in ranch marketing and consulting.
While it may seem counterintuitive (we are all still consuming meat, if not more than usual), there are certain factors that are having a harmful impact on our ranchers and farmers and the overall price of lamb and cattle.
Here are a few you might not have considered:
What are Some Factors Negatively Impacting Local Ranchers?
- Foreign Demand – Sheep Industry
- 70% of all lamb demand comes from foreign markets
- In the US, less than a pound of lamb is consumed per person per year
- Hospitality and Restaurant Demand
- Biggest domestic consumers of lamb and beef are restaurants and hotels (50% domestic sales of lamb)
- Easter is the busiest times for sheep industry but due to social distancing this surge never occurred
- Effect on Farmers and Ranchers:
- Farmers are having to freeze cuts of meat that has not been purchased which is leading to higher storage costs
- Due to lack of wool demand, quite a bit of wool is being discarded
Sheep Industry: The only facility that can test wool in the world resides in New Zealand. Due to travel restrictions, wool producers can not ship their wool to get tested in New Zealand, nor cleaned in China, nor processed at high end outdoor retail companies on the east coast.
During difficult hardships farmers typically can buy insurance for animals, but due to such a high demand across all commodity sectors, these options are not as readily currently available.
- Ranch owners and the agriculture industry in the US and countries throughout Europe rely heavily on a workforce that comes from abroad. In the US alone, 250,000 foreign workers participate in H-2A annually, a service that connects temporary ag workers to producers. Due to the travel restrictions ranchers and farmers are facing the following:
- Labor shortage during the crucial calving season
- Paying double for the same labor given the shortage and high deman
- Having to train locals who have lost their jobs in other industries only to lose these employees when they return to their old jobs.
- Many plants across the country are being shut down to COVID-19 outbreaks within packing plants and other facilities
How Are These Factors Affecting Price?
- Prices for fat lamb were at $1.45/$1.50 a pound before the pandemic and now are only seeing $1.25 a pound
- Producers are selling less given the lack of foreign and hospitality demand, and projecting income has fallen for sheep producers.
- Second largest US lamb packer, Mountain States Rosen, recently filed for bankruptcy which means producers will either have to go further to package their meat or pay higher storage costs.
- According to an article written in the Montana Standard, cattle prices have fallen as much as 30 percent
- A new study posted a projected total loss $13.6 billion across the cattle industry
- While demand for beef is still high, it is not raising cattle prices and it’s the packing plants making the profit.
- Many producers are blaming the futures markets for the increased volatility
- Demand will decrease as pandemic continues. Beef is a luxury good of animal protein and as paychecks dwindle, so will the demand for it.
What Are People Doing to Help?
Community Supported Agriculture (CSA)
- The pandemic has highlighted the issues with our supply chain infrastructure. People around the country want to know where their food comes from, and want to minimize the amount of people handling their food. They are looking for products to go directly to the consumer without the middleman.
- While there has been a decrease in restaurant demand, there has been an increase in consumers cooking at home.
Interested to see how you can support a local farm or ranch? Check out:
- To offset the decrease in demand from restaurants, the USDA plans to purchase milk, meat, and other protein sources from farmers.
- The initial phase will be a 15.5 billion purchase to support the nation’s food supply chain against the impacts of the outbreak.
- This bailout is spread across all commodity markets, some of which already have a government program in place. Cattle producers have always maintained their autonomy from the federal government so this bailout will be much needed in this sector.
Buy Directly From the Producer
MRG has created meaningful relationships with many local ranchers and farmers who take care and pride in their products. Reach out to us at email@example.com to see which producers are near you. We are happy to connect you with some great ranch owners and show you how to order! Below are a few we recommend:
- Flying Diamond Ranch: Kit Carson, CO
- Lasater Ranch: Matheson, CO
- Rusk Ranch: Westcliffe, CO
- Parker Pastures: Gunnison, CO
- Frost Livestock: Fountain, CO
- Hanna Ranch: Fountain, CO
- Colorado Craft: Akron, CO
- Primetime Beef: Westcliffe, CO
- Knott Ranch: Oak Creek, CO
- James Ranch: Durango, CO
- Sangres Best: Westcliffe, CO
- Homestead Meats: Delta, CO
- Skylines Farm of Idaho: Harvard, ID
- Silver Spring Ranch: Hailey, ID