After Spring Beef Production Tumbles, USDA Rolls Out COVID-19 Relief Aid for Producers

According to new USDA data, beef slaughtering capacity across America’s meatpacking plants fell 40% after COVID-19 outbreaks idled several facilities, including three in Nebraska.

Most have reopened, fueling hope that prices and availability will soon normalize for shoppers. But to some experts, the numbers tell the story of a hard and fast fall for many livestock producers' revenues, with a long road to recovery.

According to the USDA’s latest Livestock, Dairy, and Poultry outlook report, federal inspectors were overseeing more than 550 million pounds of beef production per week in late March. That number dove to roughly 350 million by early May.

Lee Shultz, an agricultural economist at Iowa State University who specializes in beef markets, was surprised to see projections fall 17 percent for the second quarter, which spans the worst of the pandemic's spring production shutdowns. He anticipated around a ten percent reduction.

“That's a significant impact that we're beginning to quantify now," he explained. "Those will be felt from producers for years.”

Ranchers' recent financial challenges do not end with hiccups in production scheduling. Even as plants have reopened to process livestock, Shultz said low cattle prices—which plummeted at the start of the pandemic—continue to plague producers’ bottom lines.

"For the cattle feedlots that would have intended to market cattle in April in May, they're facing severely lower prices ... some well below break-even margins," Shultz added.

Researchers at the USDA estimated those pricing issues will not let up any time soon. "Prices will remain low as the supply of market-ready cattle remains above the sector’s ability to process them, and the supply issue is expected to linger through 2021," the agency wrote.

But some federal aid is now available for producers who have lost income due to the crisis. President Trump recently announced $19 billion in federal aid for farmers, and presented details of the program on Tuesday.

"I tell you, you could go back to Abraham Lincoln; there's no president that's treated the farmers like Trump," he said.

The program covers a wide variety of crop and meat producers, and promises up to $250,000 in direct payments.

Producers who have suffered a "five-percent-or-greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities" are eligible for the program, which is funded through $6.5 billion in CARES act allocations and $9.5 billion from the Farm Service Agency.

$16 billion of the funds will go directly to producers, while $3 billion of the package will be used to purchase commodities from farmers.