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Beef Buzz News


Rabo AgriFinance's Don Close on Labor Shortages in Packing Industry

Mon, 01 Nov 2021 11:29:04 CDT

Rabo AgriFinance's Don Close on Labor Shortages in Packing Industry Cattle producers are struggling to find leverage when it comes to pricing live cattle. The backlog of cattle continue to throw the scales of supply and demand. Don Close, senior vice president for food and ag research, animal protein at Rabo AgriFinance told Radio Oklahoma Ag Network Director Ron Hays, this continues to be the case.

“Clearly, if we look at the little bit of improvement we have had in the cash market over the last three to four weeks, we are still working with our estimate for year-end highs in $130,” Close said. “We still are believing this market has got room to move.”

Slowing down the recovery process, which is getting live cattle supply to better match packer demand, is a labor shortage affecting processing and packing plants. Close said it has been a real challenge for processing and packing plants to find workers.

“Over the last six-to-eight months, I have had meetings with various packers, uniformly they have told me that pre-COVID the entry-level wage was $14.50 per hour,” Close said. “That wage is between $20 to $22.50 today.”

Although wages look as though they have plateaued, the packers Close spoke with assured him labor prices will keep rising. Until packers can attract a steady workforce, processing capacity cannot increase. Close said within the limited staff packers already deal with, absenteeism can be as high as 25% a day.

“Not only is (the problem) getting people, but it is having the confidence they will be at work when you do have them,” Close said. “The one complication to that is … the industry has been so dependent on 45,000 to 55,000 head on a Saturday to get that weekly kill accomplished, but the unspoken word of the retaliation from that limited labor force is that they are … going to get their two-day weekend, whether they take it on a Friday or most likely a Monday.”

Close said he believes the issue will stabilize over time. Talking longer-term, Close said the rate in which bringing automation online is expedited, which is the next step technology-wise.

Click on the LISTEN BAR below to hear more from Ron Hays and Don Close as they talk about labor shortages in the processing and packing industry.

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.


   


   

Listen to Ron's conversation with Don here.
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