International Issues With Us Beef Industry

• This commodity describes the initial impacts of COVID-nineteen on beef supply chains and beef product markets. An overview of major beefiness market segments of retail grocery, food service, and exports is provided, including a focus on basis beef markets.

• COVID-19 caused massive and unprecedented impacts on beef supply chains for nutrient service and retail grocery.

• The shutdown of food service and the corresponding surge in retail grocery demand provoked a first wave of product shortages due to bottlenecks and rigidities in food service and retail grocery supply chains.

• A second wave of impacts resulted from COVID-19-induced reductions in cattle slaughter and beef product. This resulted in additional product shortages in retail grocery.

• COVID-xix revealed both the efficiencies and rigidities of specialized food service and retail grocery supply.

• Dramatic and varied market price reactions beyond beef production markets helped rebalance markets and restore equilibrium.

Introduction

I of the many factors that make the U.S. cattle and beef industry an extremely complex set of markets is the disassembly of the beefiness animal into thousands of different products. These products are marketed in a vast array of final markets including retail grocery, nutrient service and exports (Clark, 2019). In the United States, nutrient expenditures prior to COVID-19 consisted of two, roughly equal market channels: food service, representing 54% of expenditures, and retail grocery, representing 46% of expenditures (USDA-ERS, 2020). The unprecedented impacts of COVID-19 revealed to producers, processors and consumers, efficiencies as well as vulnerabilities of beef industry supply chains. The COVID-xix impacts occurred in two different but overlapping waves beginning in mid-March 2020 with the bulk of impacts over by late-June. However, economical ripples continued for many weeks thereafter.

Beef packers provide the fauna harvest and the primary fabrication of beef carcasses into wholesale products. Typically, packers fabricate several hundred bones wholesale products, which are marketed as several one thousand products representing unique customer specifications. Subsequently, the majority of wholesale beef products move through a various and specialized set up of further processing activities that farther expand the set of products by several thousand additional products into largely split supply chains. Post-obit sections provide a brief overview of beef market sectors to improve sympathize the impacts of COVID-19 on beef markets.

Retail Grocery Sector

Retail grocery is responsible for a large amount of beefiness sales and grocery sales are generally recognized as the main driver of full beef sales. Retail grocery typically sells a core set up of products that is rather broad just also has considerable flexibility to adapt and feature different products when market place conditions are favorable. Many supermarkets no longer accept butchers or practise whatever meat cutting in the shop. Some contained stores and at least one regional grocery chain are exceptions to this. The bulk of supermarkets receive case-ready product from further processors, many of which are owned by major packing companies. Farther processing for retail grocery involves cutting, packaging, and labeling for retail, including ground beef retail packaging. Ground beef is discussed separately in more than particular beneath. Retail grocery increasingly may include premarinated, ready to melt "meal kits" or similar value-added products. Retail grocery uses almost entirely fresh beef products with beefiness features following a standard agenda in which advertizing and purchasing are planned several weeks to several months in advance.

Food Service Sector

Food service includes facilities sometimes referred to as HRI, pregnant hotels, restaurants, and institutions (hospitals, schools, etc.). Restaurants correspond a broad range of establishments including quick service restaurants (QSR or fast food), fast casual, cafeterias/buffets, casual dining, midlevel, and fine dining. Private restaurants or bondage typically take express and stock-still beef product needs that are very specific and quite rigid. Collectively, restaurants utilize a wide range of beef products from ground beef to Prime steaks. The majority of food service beef products originate from further processing facilities in which products are trimmed, sized for portions, tenderized, marinated or otherwise processed according to specifications. Food service further processing frequently produces additional beef products as primals and subprimals are further fabricated into multiple products including bench trim that is used for cooked ingredients in other processed products. Although most food service facilities employ fresh beefiness products, some restaurants may utilize frozen portion-control steaks or other products that can exist thawed on demand.

Ground Beef

Ground beef represents an estimated 45% of full U.South. beefiness consumption (Ishmael, 2020) and plays a atypical and uniquely important role in the U.South. beefiness manufacture in both retail grocery and food service sectors. Retail grocery establishments market large quantities of ground beef in a diverseness of forms and packaging. Ground beef for retail grocery is usually role of supply chains that specialize in case ready products and processing specifically for grocery. For retail grocery, basis beef is typically made from fresh domestic meat products, frequently sourced from muscles and trimmings from specific primals equally supermarkets often marketplace ground beefiness with carcass references such as ground chuck, ground circular, ground sirloin, etc.

Ground beefiness for food service is typically provided by specialized grinders that utilise a diverse set of inputs including fresh 50% (or similar) fatty trimmings, ^ane fresh lean trimmings or muscles from fed slaughter, fresh or frozen cow/bull lean trimmings, and frozen imported lean trimmings. Margins are razor sparse in food service, specially in QSRs that characteristic dollar menus, etc. and ground beef formulation is subject to intense cost scrutiny. Though there is some potential overlap in input sources for food service and retail grocery ground beef, the resources used for each tend to be largely dissever.

Exports

Beef exports oft originate with packers that produce consign products according to unique specifications that are typically different from domestic products; or from exporting companies that may do additional fabrication/processing for export. Growing exports in recent years and expanded need for specific products have significantly changed domestic markets. For example, diverse chuck products are popular in some Asian markets and have increased prices relative to other products and changed seasonal price patterns. Nutrient service grinders, that can and have used these chuck items in ground beef now find that these products are effectively priced out of the ground beefiness market. Virtually exports are frozen and products are typically staged in cold storage prior to shipment.

Imports

The U.s.a. has long been a major beefiness importing land, despite being the largest beef producing land and a major beef exporter. Beefiness imports are driven by the demand for lean trim to support ground beef production with over seventy% of imports estimated to be processing beef. It is estimated that imported lean trimmings accounts for over 25% of the full trim used for ground beefiness production in the United States. Imported beef too includes some musculus cuts from Canada and United mexican states. Beef trade with Canada includes some bilateral trade of like products that are economically motivated by due north–south transportation efficiencies (compared to east–west shipping in both countries). Beef imports from Mexico take grown dramatically in recent years and largely represent retail grocery and food service products targeted to Hispanic markets in the The states.

COVID-19 Impacts

Nutrient service shutdown

The kickoff wave of impacts, which began in mid-March, resulted from the most total shutdown of food service. Abruptly, food demand at retail grocery nearly doubled. The surge in retail grocery demand was further aggravated past panic buying as consumers attempted to stockpile food at home. Retail grocery demand quickly overwhelmed the retail grocery supply chain resulting in localized and temporary shortages in retail stores. Information technology is important to recognize that there was no actual shortage of product during the first month of the shutdown, only rather bottlenecks in the supply chains. Figure 1 shows beef production was to a higher place year before levels until April. It became quickly credible that nutrient service and retail grocery supply chains are very specialized and as a consequence somewhat inflexible. Food service processors are not equipped to packet and characterization products for case-set up retail sale; and in many cases, distribution systems are largely split.

Figure1.

Beef production, federally inspected weekly.

Figure1.

Beefiness production, federally inspected weekly.

The shutdown affected diverse beef products differently according to their primary use. Tabular array i shows that the initial impacts were price decreases for products heavily used in nutrient service, for example, tenderloin (IMPS 189A), ² brisket (IMPS 120A) and ribeye (IMPS 112A). Simultaneously, products used at retail, especially products that support retail ground beef, that is, chuck and round products (IMPS 114A, 116A, 168, 170) saw immediate price increases (Table 1). Over a period of weeks, adjustments somewhen allowed some nutrient service processors, distributors and retailers to conform to retail grocery need. Creative solutions included some restaurants, experiencing no, or profoundly reduced, pes traffic, selling raw product direct to consumers, either from existing inventories when the shutdown occurred, or because they notwithstanding had access to food service supply chains. QSR recovered somewhat quicker than total service restaurants considering of the availability of drive-thru service, which further reduced some of the retail grocery burden. Full service restaurants developed or emphasized take-out, curbside and commitment options, often with a limited menu. Adjustments to the express nutrient service aqueduct continued through April and May and, to some extent, for many weeks thereafter.

Table 1.

Wholesale beefiness cost changes, selected products

	Product	IMPS*	Shutdown impacts	Reduced production impacts
			% Toll alter 3/6/20–4/10/20	% Price modify 4/10/20–5/8/xx
1	Ribeye	112A	–17.one	+fourscore.9
ii	Chuck Clod	114A	+27.1	+150.7
iii	Chuck Whorl	116A	+39.1	+67.nine
4	Brisket	120A	–fifteen.5	+105.5
v	Inside Circular	168	+28.4	+106.2
6	Gooseneck Circular	170	+31.one	+ninety.vi
7	Loin Strip	180	+17.8	+50.7
8	Loin Top Butt	184	–two.i	+129.0
9	Tenderloin	189A	–42.0	+126.ii
10	Fresh 50s	Trim	–38.9	+720.0

	Product	IMPS*	Shutdown impacts	Reduced production impacts
			% Price modify 3/6/xx–4/10/20	% Price alter 4/10/xx–5/eight/20
1	Ribeye	112A	–17.1	+fourscore.nine
2	Chuck Clod	114A	+27.1	+150.7
3	Chuck Roll	116A	+39.ane	+67.9
four	Brisket	120A	–15.v	+105.5
five	Inside Circular	168	+28.iv	+106.2
6	Gooseneck Circular	170	+31.1	+xc.6
7	Loin Strip	180	+17.8	+50.7
8	Loin Summit Barrel	184	–2.one	+129.0
ix	Tenderloin	189A	–42.0	+126.2
ten	Fresh 50s	Trim	–38.9	+720.0

Information sources: USDA AMS LM_XB 459 and LM_XB 460, compiled past the Livestock Marketing Information Center.

*Institutional Meat Purchase Specifications.

Table ane.

Wholesale beefiness price changes, selected products

	Product	IMPS*	Shutdown impacts	Reduced product impacts
			% Toll change iii/6/twenty–iv/10/20	% Price change 4/x/20–5/eight/20
1	Ribeye	112A	–17.one	+lxxx.9
two	Chuck Clod	114A	+27.i	+150.7
three	Chuck Roll	116A	+39.i	+67.9
iv	Brisket	120A	–fifteen.five	+105.5
5	Inside Circular	168	+28.4	+106.ii
6	Gooseneck Round	170	+31.1	+xc.half dozen
7	Loin Strip	180	+17.eight	+50.seven
8	Loin Height Butt	184	–two.1	+129.0
9	Tenderloin	189A	–42.0	+126.2
10	Fresh 50s	Trim	–38.9	+720.0

	Product	IMPS*	Shutdown impacts	Reduced production impacts
			% Price change 3/half dozen/twenty–4/10/20	% Cost change 4/10/20–5/eight/20
ane	Ribeye	112A	–17.1	+80.9
two	Chuck Clod	114A	+27.1	+150.7
3	Chuck Roll	116A	+39.1	+67.9
iv	Brisket	120A	–fifteen.five	+105.5
5	Inside Round	168	+28.iv	+106.ii
6	Gooseneck Round	170	+31.1	+90.6
7	Loin Strip	180	+17.8	+50.7
eight	Loin Superlative Barrel	184	–two.1	+129.0
9	Tenderloin	189A	–42.0	+126.2
ten	Fresh 50s	Trim	–38.ix	+720.0

Information sources: USDA AMS LM_XB 459 and LM_XB 460, compiled by the Livestock Marketing Information Center.

*Institutional Meat Purchase Specifications.

The contrasting impacts in retail grocery and food service ground beef supply chains are demonstrated in Figure 2, which shows weekly prices for chucks (IMPS 113C) and fresh fifty% trimmings. In the first few weeks after the shutdown of food service, markets for ground beefiness sources showed diverging toll impacts. From early March to early on April, the price of beef chuck clods (IMPS 114A) and chuck rolls (IMPS116A) increased sharply, driven by sharply college retail grocery need for footing beef (Table 1). Simultaneously, the price of l% lean trimmings, used primarily for food service ground beefiness, decreased about 39%, to 18-yr lows. Later another 4 wk or then, arbitrage and adjustments re-established the normal price relationships between these beefiness product markets. Nearly beef wholesale markets increased to record levels in April and May (Table one) due to the supply disruptions in beefiness packing, although tenderloin (IMPS 189A) did non accomplish record high levels because the product is heavily dependent on food service demand (Tabular array 2), which remained severely reduced.

Figure two.

Food service vs. retail grocery ground beef demand.

Effigy 2.

Food service vs. retail grocery ground beef demand.

Table 2.

Wholesale beefiness prices (weekly), selected products ($/cwt)

Product	IMPS*	2020†		2019			2014–2018
		Max	Min	Ave	Max	Min	Ave	Max	Min
Ribeye	112A	1158.75‡c	588.47	815.x	949.78	713.49	748.50	1031.08	550.thirteen
Tenderloin	189A	1238.88	533.33||	1042.89	1428.98	920.38	1023.96	1273.21	827.36
Chuck Clod	114A	671.49‡a	190.75	224.xviii	248.34	205.58	231.14	324.12	177.13
Chuck Roll	116A	628.94‡a	251.00	282.93	359.03	252.05	287.82	367.37	229.52
Within Circular	168	650.35‡b	208.53	224.09	256.44	203.74	240.32	364.88	178.89
Fresh 50s	Trim	275.28‡a	28.49$	76.57	99.63	43.14	83.54	200.lxxx	32.20

Product	IMPS*	2020†		2019			2014–2018
		Max	Min	Ave	Max	Min	Ave	Max	Min
Ribeye	112A	1158.75‡c	588.47	815.ten	949.78	713.49	748.50	1031.08	550.13
Tenderloin	189A	1238.88	533.33||	1042.89	1428.98	920.38	1023.96	1273.21	827.36
Chuck Clod	114A	671.49‡a	190.75	224.18	248.34	205.58	231.fourteen	324.12	177.thirteen
Chuck Roll	116A	628.94‡a	251.00	282.93	359.03	252.05	287.82	367.37	229.52
Inside Round	168	650.35‡b	208.53	224.09	256.44	203.74	240.32	364.88	178.89
Fresh 50s	Trim	275.28‡a	28.49$	76.57	99.63	43.fourteen	83.54	200.fourscore	32.xx

Data sources: USDA AMS LM_XB 459 and LM_XB 460, compiled by the Livestock Marketing Information Center.

*Institutional Meat Purchase Specifications.

^†Year-to-engagement through October 2, 2020.

^‡Tape high (data series), a = week ending May viii, 2020; b = week catastrophe May 15, 2020; c = calendar week catastrophe May 22, 2020.

^||Record low (data serial), calendar week ending April 10, 2020.

^$Depression since Nov 2002, week ending April iii, 2020.

Tabular array 2.

Wholesale beef prices (weekly), selected products ($/cwt)

Production	IMPS*	2020†		2019			2014–2018
		Max	Min	Ave	Max	Min	Ave	Max	Min
Ribeye	112A	1158.75‡c	588.47	815.10	949.78	713.49	748.50	1031.08	550.thirteen
Tenderloin	189A	1238.88	533.33||	1042.89	1428.98	920.38	1023.96	1273.21	827.36
Chuck Clod	114A	671.49‡a	190.75	224.18	248.34	205.58	231.14	324.12	177.thirteen
Chuck Roll	116A	628.94‡a	251.00	282.93	359.03	252.05	287.82	367.37	229.52
Inside Circular	168	650.35‡b	208.53	224.09	256.44	203.74	240.32	364.88	178.89
Fresh 50s	Trim	275.28‡a	28.49$	76.57	99.63	43.14	83.54	200.80	32.20

Production	IMPS*	2020†		2019			2014–2018
		Max	Min	Ave	Max	Min	Ave	Max	Min
Ribeye	112A	1158.75‡c	588.47	815.10	949.78	713.49	748.50	1031.08	550.13
Tenderloin	189A	1238.88	533.33||	1042.89	1428.98	920.38	1023.96	1273.21	827.36
Chuck Clod	114A	671.49‡a	190.75	224.18	248.34	205.58	231.xiv	324.12	177.13
Chuck Curl	116A	628.94‡a	251.00	282.93	359.03	252.05	287.82	367.37	229.52
Inside Round	168	650.35‡b	208.53	224.09	256.44	203.74	240.32	364.88	178.89
Fresh 50s	Trim	275.28‡a	28.49$	76.57	99.63	43.14	83.54	200.80	32.20

Data sources: USDA AMS LM_XB 459 and LM_XB 460, compiled past the Livestock Marketing Information Center.

*Institutional Meat Purchase Specifications.

^†Yr-to-date through October two, 2020.

^‡Record high (data series), a = week ending May 8, 2020; b = calendar week ending May xv, 2020; c = week ending May 22, 2020.

^||Record low (data series), calendar week ending April x, 2020.

^$Depression since November 2002, calendar week catastrophe Apr 3, 2020.

Packing constitute disruptions

The second wave began in April when COVID-19 affected the labor strength of harvest and processing installations and severely reduced output. Never earlier take and then many packing and processing plants been affected simultaneously by reductions in capacity. Some harvesting plants completely shut down for upwardly to 2 wk and others curtailed output due to labor force reductions. Cattle slaughter decreased weekly through the month of April, reaching a pinnacle reduction of 34.8% down year over year the end of April, and and then slowly recovered through May. Full beefiness production over a ix-wk catamenia of these effects was down 17.9% compared to the same period i yr earlier (Figure one). This reduction in beef production resulted in existent, though temporary, shortages of product that looked to many consumers like more of the same conditions as the initial shutdown in March and early on April. The beef supply disruptions were exaggerated past the continuing limitations in the nutrient service sector and the added need continued to stress the retail grocery supply concatenation. Over several weeks, boosted adjustments were made to assist nutrient service supply chains support retail grocery including more bulk packaging and, in some cases, temporary exemptions from some labeling requirements.

Retail beef prices, which reverberate retail grocery prices (equally opposed to nutrient service), responded as expected but with some difference in timing. The monthly retail all-fresh beef cost ^three increased modestly in April before spiking higher in May and June. The May all-fresh price jumped to $704.50/cwt, upwardly 18.seven% over the January and February average pre-COVID level of $593.60/cwt and 19.three% higher year over yr. The all-fresh retail price peaked in June at $738.20/cwt, up 26.2% compared to June 2019 levels. Retail beefiness prices decreased in July and August, albeit more slowly than wholesale beef prices, and remained higher year over year in August. An important market function is to employ college prices to ration need when supplies are limited and thus avoid shortages. In this situation, the dramatic rise in retail beef prices helped to ration limited beef supplies in the March to May period but the magnitude of the shock and supply disruptions overwhelmed rising prices and led to temporary, desultory production shortages in retail grocery.

The impact on and perception of consumers to these two waves of impacts was like due to the lack of production in grocery stores in both cases. The reality of those impacts was very different—1 due to bottlenecks and rigidities in the supply chain and the other the result of bodily reductions in production availability. The combined impacts of the shutdown and packing plant disruptions were unprecedented volatility in beef product markets. Table 2 shows numerous and varied impacts on selected beef product markets. For example, the shutdown of food service caused beefiness tenderloin (IMPS 189A) to drib to record low levels in April, reaching a weekly low that was down 49% from the 2019 average level (Tabular array 2). Many wholesale beef prices reached record loftier levels in May because of the supply shortages. Some products, such equally the chuck clod (IMPS 114A) and inside circular (IMPS 168) briefly reached levels nearly iii times the boilerplate 2019 cost for those products (Table 2). Mayhap most dramatic was the price of fresh 50s trim, which dropped to an 18-yr low in early Apr earlier jumping to a record high 5 wk later. The May price elevation for fresh 50s trim was over three.5 times higher than the average price level in 2019 (Table two).

The focus of this article is on beef products and supply chains from packers downstream. However, upstream cattle product is broadly part of the beef supply chain and cattle markets were significantly affected by the packing plant disruptions in April and May and beyond. The reductions in packing constitute operations effectively cleaved beef product markets from cattle markets for several weeks. During this period, beef product markets generally moved in contrary directions from fed cattle markets. The lack of packing chapters created beef shortages that led to firsthand and dramatic cost spikes for beef products while that same lack of packing capacity created an immediate excess supply of fed cattle relative to packer demand and led to lower fed cattle prices. Many concerns were voiced about the disconnect between fed cattle markets and boxed beef cutout prices when at that place was, in fact, an unavoidable temporary concrete disconnect that caused prices to move in opposite directions above and below the packing level of the industry. Although this was an extremely unusual situation, the market reactions at all levels were exactly what is expected and helped support a remarkably rapid recovery in beef product markets.

Continuing impacts

The initial impacts of the food service shutdown and packing establish disruptions were largely by by the end of June. Beef production returned to yr earlier levels by mid-June (Figure 1). However, ripple effects, both physical and economical, connected for many weeks thereafter. By the finish of June, the majority of wholesale beefiness production prices had returned to prior levels with typical relationships between beefiness product prices mostly reestablished. Equally noted to a higher place, retail beef prices jumped higher with some delay and reverted more slowly to lower levels as is typical of retail price adjustments.

Major impacts on fed cattle markets extended well beyond June. Reduced cattle slaughter in April and May resulted in a large backlog of fed cattle that took many weeks over the summer and fall to piece of work through. No cattle were depopulated and delayed feedlot marketings resulted in backlog supplies of fed cattle that pushed fed cattle toll lower into July before recovering into the autumn. Delayed fed cattle slaughter resulted in heavier carcass weights, higher quality grading percentages and other lingering impacts on beefiness supplies and product mixes.

Beef exports likewise dropped sharply in May and June before recovering in July and by August exceeded year earlier levels. Beef imports spiked higher with a delay, jumping sharply in July and remaining well above yr before levels in August. Beef imports increased in the summer in response to strong ground beef need from the recovery of QSR restaurants. Big supplies of fat trimmings resulting from heavy carcass weight in domestic fed cattle and stimulated additional lean demand.

The Function of Common cold Storage

The beefiness production disruptions and product shortages resulting from COVID-19 provoked questions nearly the availability and apply of beefiness in common cold storage to supplement fresh beef supplies. Most beefiness marketed in food service and retail grocery is fresh and moves to final consumption in a thing of a few days to a few weeks at most. Cold storage inventories are frozen stocks of products held more than than thirty d and does not typically consist of a consummate fix of beef products. Beef in cold storage includes products staging for export, which are generally frozen and imported beef products (also frozen) until they are used. Cold storage beef supplies typically increase in the fall and winter and include supplies of domestic lean trimmings resulting from seasonally higher cow culling in the fall of the year. These lean trimmings are used to back up ground beef production for seasonal grilling need the post-obit summertime. Occasionally, unique market place situations outcome in commercial firms putting other products into common cold storage. This is not a regular or preferred practice equally common cold storage adds cost and frozen beefiness is often marketed at a discount to the fresh product.

In 2020, beef in cold storage increased counter-seasonally in March before declining seasonally in April and May, likely as a effect of the sharp loss of food service demand. Cold storage was not available to starting time retail grocery production shortages considering information technology consists of the wrong set of products and because the quantity of cold storage belongings is modest. Monthly beefiness cold storage inventories averaged 458 million pounds in 2019. This represents less than one wk of beefiness production, which averaged over 513 million pounds per calendar week in 2019. This means that fifty-fifty if all cold storage beef was pulled out at once, it would correspond less than ane wk of beefiness supply and, as noted previously, would not friction match the mix of products needed in nutrient service and retail grocery markets.

Recovery and permanent impacts?

As noted previously, the majority of the initial COVID-19 shocks were resolved past the end of June. Certainly, at that place were continuing impacts after June and additional recovery will occur for many months. Ripple effects on beef quality, product mixes, beef exports and imports, and feedlot dynamics will extend beyond 2020. Moreover, at the time of writing in Oct 2020, the public health crisis and the macroeconomic impacts of COVID-nineteen in the United states of america and globally were standing and could pb to new or renewed impacts going forward. Nutrient service is still significantly macerated with a slow recovery that will last many more than months. Clearly, recovery is a moving target every bit 2020 moves into the quaternary quarter.

Many questions take been raised most likely permanent or very long-lasting effects of COVID-19 on food industries, beef supply chains, and the cattle industry. Given the on-going nature of the situation, information technology is premature to say anything definitive well-nigh permanent impacts. In that location are clear indications of several changes that volition touch food industries; including the likely loss of food service establishments (which may rebuild or be replaced over fourth dimension); changes in travel, especially business travel in a world of Zoom meetings; a larger role for take-out, drive-thru, and home delivery food service; and the extent to which domicile food preparation results in a long-term reduction in food service demand. Just time will provide the perspective to understand the types of changes and long-term impacts on food industries.

COVID-19 besides exposed rigidities and lack of agility of beefiness supply chains to respond to this type of stupor. Questions accept been raised about the likelihood of fundamental changes to increase the resilience of beef supply bondage. Certainly, it seems likely that individual firms may assess some business practices and make some changes. Firms may consider a wider range of procurement practices, such as contracts and other means to enhance both supply reliability and manage cost hazard. Many firms may devote additional resource to management planning with such things every bit supply chain mapping and other activities that will help identify supply chain redundancies and contingency plans to reduce the impact of future supply shocks. Withal, the current structure of food service and retail grocery supply chains evolved in response to efficiencies and economic returns to specialized facilities and take contributed to reducing the cost of food in the United States. Less specialized multifunction facilities that operate simultaneously in nutrient service and retail grocery chains would be less efficient and more costly. Marginal changes in management and operational flexibility to increment the tactical agility of firms are more likely than massive reinvestment in new beefiness supply chain infrastructure.

Summary

COVID-nineteen has revealed both strengths and weaknesses in beef supply chains. Information technology has besides revealed much most market economics. Under normal, stable marketplace conditions, markets coordinate resource and product allocation with such efficiency and subtly as to be largely unrecognized. Only in the confront of abrupt and unexpected shocks are the reactions of markets to rebalance and restore equilibrium revealed. Freely operating markets react with dramatic, sometimes surprising, and disruptive responses to massive and unprecedented stupor such equally COVID-19. Consumers, producers, companies, and policymakers all learned much about how beef supply bondage and the market-based economy works as a consequence of COVID-nineteen.

Virtually the Author

Derrell Peel is the Charles Breedlove professor of agribusiness in the Department of Agricultural Economics. He has served as the extension livestock marketing specialist since he came to Oklahoma State University in 1989. He has BS and MS degrees from Montana State University and a PhD from the Academy of Illinois. His main program areas at Oklahoma Land University include livestock market place outlook and marketing/adventure management education for livestock producers.

Derrell also works in the area of international livestock and meat trade with a particular focus on United mexican states and Canada and the N American livestock and meat industry. He lived in United mexican states on sabbatical in 2001 and has developed an extensive knowledge of the Mexican cattle and beefiness manufacture and the economics of cattle and beef trade betwixt the United States and Mexico.

Footnotes

1

Fabrication of feedlot finished (fed) steer and heifer carcasses produces fatty trimmings, which are mixed with additional lean to produce ground beef. Beefiness packers may produce and sell a range of trimmings products with varying lean percentages simply the most common are fresh fifty% lean trimmings (50s).

3

The all-fresh retail beef cost is a composite retail grocery price series provided by the Economic Research Service (USDA-ERS) that includes a diverseness of Option and other class beef products to better reflect retail beefiness purchases. The data is available at https://www.ers.usda.gov/data-products/meat-price-spreads/.

Literature Cited

Clark

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2019

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Disaggregating breed demand: data limitations and manufacture perspectives

[unpublished MS thesis].

Department of Agricultural Economics, Oklahoma State University

.

© Peel

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.

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