Sort & Cull

Getting Products Where They Need to Be

Rick Kment
By  Rick Kment , DTN Analyst
Meat sections in grocery stores around the country have been emptying out in recent days as consumers stock up on food and household products as the coronavirus epidemic spreads. (DTN photo by Rick Kment)

The last two weeks have been an eye-opening experience for most of us in the U.S. With many of the things that we normally take for granted (like toilet paper, for instance), many of us have put more thought into normal daily activities than we even thought possible in many months or years.

Just two weeks ago, who would have thought that a nice dinner out would consist of waiting in line at the drive through!

However, for the most part, core services continue to be available to most without major issues. Transportation of goods and services continues to be one of the other things that seems to be taken for granted, and remains a core issue in maintaining balance and consistency in the days and weeks to come.

Although transportation is important in all industries, I want to specifically focus on the trucking and delivery of products in the livestock and dairy industry. Both of these industries focus on perishable products that are the core of most consumers' shopping lists. However, transportation of these products is much more complex than just moving final product to the back door of grocery stores. Each of these products takes significant processing in order to move from raw materials to retail-ready products.

Through the pandemic, livestock and dairy producers have done an excellent job of producing high-quality and cost-effective meat and milk. Packing and milk plants have done a good job at maximizing production speeds in order to keep product moving to retail locations. As attested to by many reports and news articles, consumers have done a good job of buying available meat and dairy products.

The trucking and transportation industry is one of the most overlooked processes in feeding a nation of concerned consumers. The industry has done a good job of moving raw milk and market-ready animals to processing plants, then moving these finished products through the distribution system and to final retail locations.

There has been very little concern at this point that transportation challenges will be seen in the industry. It is important to remember that, in the case of livestock and dairy markets, it takes two separate and unique systems to get products from farm to store.

Livestock and bulk milk trucks are utilized to make daily shipments from farms to processing plants, while refrigerated trucks then deliver products from plants to stores, making each link in this very complicated chain extremely valuable. This is very evident in live cattle and beef prices over the last several days. Just last Friday and Monday, April live cattle futures posted losses over $8 per cwt. At the same time, choice boxed beef cutout prices rallied, with an all-time record of $16.22 per cwt, doubling the previous record set in August 2019.

The main concern leading to these extreme and wide market swings is the fear that any link in this delicate process will be broken due to COVID-19 outbreak and attempts to contain the pandemic. Every piece of this complicated puzzle continues to do its very best to keep things as normal as possible given the world of change and uncertainty. And that is coming at a great financial and personal cost to many in the industries.

For now, the system, while not perfect, has been working extremely well at keeping processors active and new product hitting stores on a daily basis. As we move forward, it is extremely important not to panic or be driven by the fear of what "could happen." But, at the same time, we should not take for granted the difficult and complicated chain of events needed to move our much-needed and desired food from farm to table.

Rick Kment can be reached at rick.kment@dtn.com

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