Disruption, quandaries for beef industry during pandemic

Amid the pandemic, cattle producers are being forced to weigh the revenue of selling cattle at lower-than-normal prices at the sale auction vs. how much the cattle would cost the operation by keeping it until prices rise again.

Effects of the pandemic have hit beef producers hard. Many have been forced to change the way they feed and market their cattle, and trying to figure out how to keep their businesses going, given the negative market situation.

“We didn’t anticipate the interruption in the supply chain,” said Kelly Heath, director of the University of Nebraska-Lincoln Institutional Animal Care Program, with the COVID-19 related closures of many packing plants.

Nebraska producers also didn’t anticipate the loss of a distiller’s grain, an inexpensive feed source that producers have grown to depend on, said Travis Mulliniks, the UNL range cow production specialist based at the West Central Research and Extension Center in North Platte. Ethanol plants have idled because the demand for the fuel additive plummeted along with the price of gasoline. Distillers grain is a byproduct of ethanol production.

Maybe things will work out for the better soon, Heath said, and packing plants will return to full capacity. When that happens, hopefully prices will get better: Higher for producers and lower for consumers. Maybe the demand for ethanol will improve also, and the supply of distiller’s grain will return.

In the meantime, some producers are trying to figure out what to do with cattle that are at market weight, but the price they can get at the sale barn has fallen well below the profit point. If they hold onto the cattle, waiting for the market to improve, that adds expense and risk to their operations.

Producers have to figure the cost of continuing to feed and maintain market-size animals, said Dr. Brian Vander Ley, a veterinary epidemiologist for UNL stationed at Clay Center. In addition, if cattle become excessively heavy, they are at greater risk for heat-related illnesses. They also are more likely to be injured on their way to market. On top of that, when they get to the sale barn they may demand a lower price compared with cattle at the ideal weight.

“There are a couple of ways” to limit weight gain in market-ready cattle, said Dr. Galen Erickson, a UNL professor of ruminant nutrition, but “none of them are great.”

“You can increase the forage,” in their diet, and limit protein intake, “but forages are expensive per unit of feed value” and “they’ll still gain some” weight anyway.

Another option is to limit total feed amount, Erickson said, but “that [only] works fine if you have room for all the cattle to feed at once,” which is often not the case. Cattle who need the feed the least may get to the bunker ahead of the others. As a result, you end up “fully feeding the first group and not feeding the others at all.”

The distiller’s grain shortage is another problem, and “it’s hard to mitigate that,” said Mulliniks.

Distiller’s grain is high in protein. There are other sources of protein, such as soybeans, alfalfa hay and corn gluten, but a number of factors come into play. They include cost per ton, local availability and trucking costs.

A complicating factor is that “protein is not just protein,” Mulliniks said. Different protein sources are composed of different combinations of amino acids and they are not all utilized in the same way in the cow’s digestive system. Therefore, feed formulation requires careful consideration of the animal’s needs, based on life stage and performance goals.

This year’s challenges, Vander Ley said, may prompt some long-term changes in the way cattle are raised and fed. However, what long-term adjustments are appropriate “is the billion-dollar question,” and warrants careful consideration. Otherwise, “unintended consequences of changes are likely.”

The whole situation is complicated, Erickson said, and university specialists are available to help producers consider options. “Now is the time for professional help,” rather than just trying to figure everything out, he said. At the same time, “Our producers are innovative,” Heath said, and working with them may result in “solutions that we haven’t even thought of.”