24 CALF News • April | May 2022 • How Do We Handle the Next Black Swan? COVID Caused Beef Business Thinkers to Do a Lot of Rethinking COVER STORY I By Burt Rutherford Contributing Editor f the beef business has learned anything during the past two years, it’s that old business practices must be made new again. Take, for example, the beef supply chain from the packing plant to the consumer. Pre-COVID, it was a supply chain that would have made Henry Ford proud. Packers harvested cattle and shipped boxed primals out the back door. Wholesalers and retailers processed the primals and subprimals into consumer-ready cuts. This just-in-time production model worked well, providing end users with the freshest product they could get. ness models. “If we think forward and we think [about] what changes need to occur in the industry to prevent the occurrence of empty shelves from happening again, we need to look at a post-harvest scenario that transitions the market from a just-in-time delivery system to a just-in-case delivery system. “We have identified four major issues, which are well known, that are driving fundamental change in the beef supply chain from a just-in-time delivery model to a just-in-case approach over the next three to five years,” according to Close. Those four are:  Automation in packing plants to increase the efficiency of their labor force.  Packaging that extends shelf life, is more durable for grocery delivery and meets sustainability expectations.  Government and investor-led sustainability demands, which may require more documentation and verification methods throughout the supply chain.  The transportation system’s technology and infrastructure overhaul that reduces carbon emissions and the risk for backlogs. Automation When the words “automation” and “packing plants” are used in the same sentence, the first thought is robotics. And that’s very much a possibility, Close said. But not yet. “What we are seeing is a lot of implementation of technology. We see a lot of implementation of cameras, monitors and creating a lot of big data that shows the efficiency of a machine,” he said. “So we’re talking movement of boxes through the plant. We’re talking storage. We’re talking billing, assembly of orders.” So what Close expects to see initially is the addition of a lot of software that enables the existing workforce to work more efficiently. “Over time, could that lead to robotics? Yeah. We’re just not there today.” Packaging Today, beef is packaged two ways. From the packer to the wholesaler, it’s in Cryovac bags in a box. That, Close said, is very good packaging. “But if we go from there to the retail counter, we’re talking the conventional foam tray with cellophane.” That packaging is designed to let oxygen through to keep the bright red color. “That foam tray and cellophane is designed to last hours, not days,” he said. Now, think of the explosion of meal kits and the growth of home delivery. In some metro areas, grocery retailers promise delivery in 10 minutes. Then consider the international trade and what future packaging may be needed there. “Each of these avenue streams to consumers oftentimes need very different packaging with varying levels of durability to withstand shipping, extended shelf life.” Even antibacterial packaging. “The takeaway is the very consumer who has needs for a different type of packaging is often the very same consumer who is raising hell because of the amount of package waste and sustainability and how we save the planet. How do we serve both ends of that consumer?” Close asked. Sustainability “That leads into the whole sustainability from with a whole ‘nother set of issues that will require more third-party verification, more certification, more inspection. That will add cost to the system,” he said, and further widen the farm-to-wholesale and farm-to-retail price spreads. Continued on page 27  Don Close, RaboResearch Then came the fire at the Tyson plant in Holcomb, Kan., and COVID. “The burden of the marketplace fell on producers, just the perishability of a steer and the inability to get them harvested on a timely basis,” said Don Close, senior analystanimal protein with RaboResearch. Indeed, at the height of COVID cases in 2020, fed and feeder cattle backed up severely while packing plants, crippled or shut down because of a lack of employees, caused severe shortages in retail meat cases. That caused the thinkers in the beef business to do a lot of thinking and rethinking about existing busi-