pork | Field 2 Field

May 6, 2020May 6, 2020

Bison ranching industry struggling through COVID-19

Bison ranching. The first thing that may come to mind is hundreds of Bison thundering down the prairie a long time ago. Did you know we raise bison on farms across the country? In fact, the U.S. has bison production in every state in the union. While it’s been a growing industry for many years, the impact of COVID-19 on raising Bison has been anything but positive.

“We’re a small segment of agriculture,” says Dave Carter, the Executive Director of the National Bison Association. “However, we’ve been growing for the last 15 years and turning into a strong and steady business. Most producers have been pretty profitable over that stretch.”

Here’s an interesting conversation about raising bison in the United States. It’s from a YouTube channel called Off-Farm Income

Bison is marketed in two locations, similar to the other major protein segments in U.S. agriculture. Those markets include the restaurant/foodservice sector and the retail sector. Carter said because bison processors tend to be smaller than their counterparts that process beef and pork, they often specialize in one market or the other.

“When COVID-19 hit and restaurants shut down, those processors serving the foodservice customers really took a hit,” he said. “Some have had to lay off up to 60 percent of their employees almost overnight. Those folks who saw restaurants shut down were suddenly scrambling and trying to adapt as retail demand went up.

Bison ranching — Dave Carter is the Executive Director of the National Bison Association. (Photo from the Business Journals)

“Herein lies the problem,” Carter added. “Most of the higher-end cuts like steaks go into the restaurant and foodservice sector. On the retail side, customers are going into stores to buy ground bison. When the higher-end cuts like tenderloins at $24 a pound aren’t selling while people are buying ground bison at $9 a pound, it has a significant financial impact.”

The prices that processors have paid to ranchers over the past month have dropped around 40 cents a pound, a significant price cut for a large animal like bison. Prices have been around $3.70 a pound. He admits while other livestock sectors would love to see that price, it’s still a significant drop for bison producers in just one month’s time.

The ranchers in the finishing segment of the bison industry are the ones being hit hardest because they’ve got animals that are ready to go and are having to hold onto them longer. Processors aren’t working as quickly as they normally would due to layoffs and illness. Animals that stay longer on the farm tend to gain more weight than is optimum and it adds more expense to the bottom line.

One of the biggest challenges the industry faces is getting enough feed because of what’s going on in the ethanol industry. “Distiller’s grains have been a big part of our feeding formula in bison ranching,” Carter said. “Because of the crisis in the ethanol industry, the price of distiller’s grains is going up significantly and the availability is going down.

“That means we now have ranchers who will get less for their animals when they deliver them to their processor,” he added, “but their feed costs are going up at the same time.”

He is thankful that none of the bison processing plants in the country have had to shut down entirely because of the outbreak. Unfortunately, a high number of workers have tested positive for COVID-19 and that’s made other employees hesitant to come to work. But Carter says those bison processors are doing a “great job” of caring for their workers through social distancing, through testing, and by providing Personal Protective Equipment,

Livestock producers in the pork sector have had to make the horrible decision to euthanize some of their animals as they don’t have anywhere to send their hogs for processing. Carter says the bison industry isn’t at the point yet.

“We still have enough supply chain capacity that our ranchers haven’t had to make that decision,” he said. “One reason for that is, unlike our friends in the cattle industry, we don’t have fall calving. Most of our calves are born between April and June, which meant they were weaned and already sent to other ranchers for finishing between November and February of last year.

“That means producers were already done selling their previous calf crop before COVID-19 showed up,” Carter added. “A lot of the ranchers that are feeding bison will probably turn some of their animals back out to pasture and let them graze on grass, so they don’t have the extra feed expense. We can hold them longer than a lot of other livestock, so we aren’t in danger of having to euthanize them in the near future.”

December 28, 2019December 28, 2019

Meat Sector Looking for 2020 Rebound

Here’s the complete podcast with Mike Zuzolo. You can play it here or download it by clicking on the three dots on the right side of the player.

“Meat, the redder, the better.” Words of wisdom from the grill master (me). However, those folks who raise that red meat (which includes all types of the protein products in the meat case at your local grocery store), for the most part, had a difficult year.

The U.S. ag sector has to be happy to see the end of the calendar year 2019. It was rough, which might be the understatement of the century so far. I’ve been doing a series of interviews for the National Association of Farm Broadcasting News Service (I’m the assistant editor/reporter) that looks back at 2019 and peeks ahead to next year. I caught up with Mike Zuzolo, President of Global Commodity Analytics in Atchison, Kansas.

2019 was not good for most sectors of the U.S. ag economy, including the protein sector. “No, it wasn’t,” Zuzolo says. “Given the packer break-evens being in the hundreds of dollars for much of the year in cattle, and given the cash prices of hogs struggling to get above $50 live prices, as well as seeing that African Swine Fever was decimating half of the world’s hog herd, I’d say 2019 was a very big disappointment to the cattle and hog industry.”

He said the challenges didn’t just include the trade troubles that dominated headlines throughout the year, they also included a major fire at a Cargill plant in Holcomb, Kansas. Zuzolo said that shot cattle prices sharply lower.

“Prices went below break-evens and they didn’t recover for several weeks,” he recalled. “In my opinion as a livestock analyst, it really shouldn’t have hit the markets quite that hard. The market saw cash prices for cattle collapse from around $120 to $100 for several weeks. At the same time, ground beef and boxed beef prices shot sharply higher because of expectations for tighter supplies.”

Cattle producers took a major hit at that time. The good news is I want to leave you is that Zuzolo sees potential for several bright spots ahead for the protein sector in 2020.

You can find Mike’s website at https://globalanalytics.wpcomstaging.com/

August 30, 2019August 30, 2019

Agricultural trade opportunities are still out there

Here’s the podcast with Jeremy Miller. If you want to download it for later, go ahead and click on the three dots on the right side of the player and hit download.

Agricultural Trade is a sore topic of conversation these days. The agricultural sector in Minnesota and around the country has been struggling for more than a year due in large part to trade disputes with other nations, including the biggest one with China. However, there is some good news out there in international market opportunities for Minnesota farmers. District 28 Republican Senator Jeremy Miller recently took part in an overseas trade mission to Taiwan July 21-26 and says there are opportunities out there for Minnesota farmers to find markets for their commodities.

“A representative from the Taipei Economic and Cultural Office in Chicago reached out to me earlier this year about leading a multi-state, bipartisan legislative leaders’ delegation to Taiwan,” he recalled. “Before we go any further, people have asked who paid for the trip. I want to make it clear that the trip was paid for by Taiwan’s Ministry of Foreign Affairs. The whole purpose of the trip was to develop relationships between the United States of America, specifically Minnesota, and partners in Taiwan.”

It was the second trip Miller has taken overseas, with the first one taking place in South Korea back in 2011. He said the number one focus of these trips is to “meet people,” with the number two focus of “looking at opportunities.” The third and most important focus of the trip is “developing relationships” to see what kinds of business dealings can evolve in the future.

“The potential is there for a lot of different relationships between Minnesota and Taiwan,” he said. “By far, the biggest opportunity I see in Taiwan is for agricultural trade. Minnesota already exports a good number of crops, especially soybeans, to Taiwan. I think there’s even more opportunity there, whether it be for corn, more soybeans, and especially for pork.”

Miller looked into the numbers and found that Minnesota exported about $413 million worth of goods to Taiwan in 2018. However, that number is likely to go higher. “Last year, there was a agricultural trade mission to Taiwan that both Minnesota and Iowa took part in,” he recalled. “On that trip, Taiwan signed a $1.5 billion-dollar deal to buy 3.9 million metric tons of soybeans from both Minnesota and Iowa before 2021.

“What I’m driving at is there are even more opportunities for Minnesota and Taiwan to increase the amount of business done,” Miller said. “But, it comes down to keep lines of communication open and building on those relationships once they’re established.”