CALF_News_August_September_2020

18 CALF News • August | September 2020 • www.calfnews.net The State of Our Industry COVER STORY Feeders Get 'Market Flu' During COVID By Heather Smith Thomas Contributing Editor T he livestock industry is facing uncertain times and feedlots have been struggling with marketing issues. Warren Rusche, South Dakota State University Extension beef feedlot management associate, says the biggest issue is that many packing plants closed or slowed their processing in April, due to the coronavirus.“This made it more challenging to get cattle sold – or sold at a decent price.” By mid-June, however, packing plants were mostly up to speed again and slaughter capacity close to where it was earlier in the year. “Wholesale beef prices dropped, and the live cattle market has been all over the place but mostly down,” Rusche says. “In the next few months, the big concern is marketing; we don’t know what the market will look like as we work through the backlog. “Another question is, how many cattle we actually need to work through? Depending on who you ask, these num- bers are a ways off. “The good news is that we are at least to the point where if you have a pen of cattle that needs to go, there’s a little less concern about finding a place for them,” he adds.“There’s more opportunity to move them, and it’s not getting worse.” Derrell Peel, Oklahoma State Uni- versity Extension livestock marketing specialist, says the biggest thing right now is trying to recover from packing plant slowdowns/shutdowns. “The coronavirus hit their work force so hard that, through the entire month of April, we lost packing capacity and could not slaughter animals that needed to be slaughtered,” Peel explains.“It reached the worst point the last week of April, and since then, we’ve been in recovery mode.” Some parts of the country have fewer packers so cattle producers and feedlots in those regions are very vulnerable. The plant in Pasco, Wash., is the only one in the Northwest and it was shut down for several days.“The whole country suffered from lack of processing ability,” he says. “Slaughter capacity is back on line, close to full capacity, but in the mean- time, cattle that didn’t get slaughtered accumulated in feedlots. We still have serious backlog; several hundred thou- sand cattle still waiting to be processed. It will take time to work through this,” Peel says. “Even at full capacity, we have animals already scheduled to be processed, and now we have additional animals; it will be a slow process working through the backlog. Late June is typically the sea- sonal peak for slaughter. Once we’re past that, there won’t be as much normally scheduled slaughter through summer and we should start to catch up,” he says. “It’s a buyer’s market right now, which will keep some price pressure on the fed cattle market until we can get current again. This will likely take most of the summer, perhaps into September-October." Peel contends that if feedlots aren’t current, they’ll catch up by September or October since March/April place- ments were down significantly due to COVID-19. “Placements were 23 percent down from last year in March, and 22 percent down in April, creating a big hole in flow of cattle coming through the ranks in feedlots,” he says. “Feeder cattle marketing increased during May. The next cattle-on-feed report will probably show May place- ments fairly large, picking up some of the cattle that didn’t get placed in March/ April,” he says. Peel predicts marketings and place- ments may be almost back to where they