IOWA FARM BUREAU ANALYSIS SHOWS FARMER AND CONSUMER IMPACT DURING LOWEST PORK AND BEEF PROCESSING NUMBERS IN A DECADE
Weekly Pork Production Down 44 Percent, Cattle Down 38 Percent for Week Ending May 2, 2020
WEST DES MOINES, Iowa – May 7, 2020 – Iowa farmers and rural communities face mounting challenges and uncertainty as disruptions to meat processing plants impacted by COVID-19 have created a bottleneck in the supply chain with major negative impacts for both farmers and consumers.
While some meat processing plants have partially reopened, the impacts to the nation’s leading pork producing state amidst the supply chain disruption are significant. The week ending May 2 saw the lowest weekly hog slaughter in the past decade (2011-2020), and cattle slaughter also faced a decade low for a non-holiday week. Prior to the COVID-19 global pandemic, consumer demand and pork and beef production levels were at all-time highs, with Iowa farmers responsible for nearly one-third of U.S. pork production and a top-10 beef producing state.
“Looking back just two months ago to March 1, 2020, market hog inventories were at their record high for that time,” said Sam Funk, IFBF director of ag analytics and senior economist. “U.S. and Iowa pork farmers went into this pandemic producing at record levels to meet consumer needs, but the shortened capacity to harvest pigs due to COVID-19 resulted in an excess supply of pigs, despite a very strong demand for pork protein from U.S. and global consumers.”
The IFBF analysis shows that from the week ending March 21 to the week ending May 2, the weekly hog slaughter decreased by more than 44 percent or nearly 1.3 million head. The bottleneck in the supply chain coupled with a growing number of market ready hogs has depressed prices to the point where many pork farmers face significant losses in 2020 and beyond continuing an eight-year economic downtown for Iowa farmers.
“The plight facing pork farmers today is shared by cattle farmers, another industry producing at decade high levels in March 2020 before the pandemic disrupted the supply chain,” said Funk. “Just as we observed with pork, the COVID-19 induced slow-downs and suspensions of processing facilities dropped decade high cattle production to a weekly low for all non-holiday weeks during the past decade.”
Looking back to the week ending May 2, 2020, harvesting of cattle had decreased by 260,000 head from the week ending March 28. Scale back in meat processing has forced some grocers, retailers and fast-food chains to restrict or limit consumers’ purchases given the supply chain disruptions.
“While consumers may see short-term impacts at the grocery store when it comes to the meat selection and quantities available for purchase, it’s important to note the challenges Iowa farmers face are immense and likely to extend throughout this year and into the next. The data in the study clearly underscore the need to get the supply chain moving again in a way that protects workers and provides a lifeline to farmers,” Funk said.
“With each passing day, tens of thousands of animals are unable to be processed due to the bottleneck in the supply chain caused by the COVID-19 pandemic, impacting consumers and devastating farmers. Farmers are doing a great job filling the animal protein needs of consumers in the U.S. and around the world. The reduced capacity to process market animals is now forcing extremely difficult and heart-wrenching decisions for farmers. The public health pandemic that is COVID-19 is hurting most of the world’s population – and significantly impacting farmers who are providing the food, fuel and fiber we all depend on the deepest in terms of economic costs and livelihoods. Some people are out of work. Farmers are working and investing more every day to feed their livestock and plant crops, and the market prices they face threaten their ability to continue to produce the products on which we depend.”