Beef Buzz News
KSU Livestock Market Economist Glynn Tonsor Explains Once In a Lifetime Shcok to Beef Industry is Partly to Blame For Market Disruption
Fri, 10 Apr 2020 09:52:51 CDT
A “once in a lifetime shock to the beef industry” is how Dr. Glynn Tonsor, Kansas State University livestock market economist, described the current market situation during a webinar Thursday night.
This week we’ve seen increased conversations about the disparity in price for boxed beef versus cash cattle. Congressmen and agriculture officials have written letters requesting the USDA to investigate any possible market manipulation.
Dr. Tonsor said the market system has been “shocked” by the rapid changes due to COVID-19.
We raise whole animals and we produce a lot of different products, Tonsor said. Some products head to the food service market and some to the retail. When one segment is shut off overnight, it creates notable challenges to repurpose those products, he said.
The problem at the wholesale market becomes clear when you look at the various parts of the carcass. Chuck and round cuts have increased in price 28-36 percent, as these lower valued products are easier to sell at the retail level. Meanwhile, other cuts, such as ribs, briskets, short plates and loins have all decreased as there is no food service market for these products.
Another part of the equation is the processing side, where Tonsor noted concern about plants reducing workforces and slowing down production.
He said the exact size and location of the plants, which are scattered across the country is a factor.
No individual plant represents more than 7 percent of the overall national capacity, he said.
The ability to absorb one plant is there, but the uncertainty is how many of those plants and how long, Tonsor said.
Click here to view the slides from Thursday night's webinar.
Click on the LISTEN BAR below to hear more comments from Dr. Glynn Tonsor’s webinar presentation.
The Beef buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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