Overnight during the height of the pandemic, certain local markets became popular. The big one was beef. If you couldn’t get your beef cuts in the grocery store after a rush of buyers bought everything up in the meat case, maybe you could purchase from your local rancher who had been pitching his local, fresh beef for the last decade.
Problem was, there were supply chain challenges in the local market too. Now, eight months into the pandemic, everyone is still sorting out the issue.
This was evident in the Arizona Farm Bureau resolutions process last month, where member leaders proposed numerous and sometimes conflicting policies on everything from country of origin labeling, cash market purchasing mandates on large meatpackers, and ways to increase the capacity of small processing plants so that producers aren’t so reliant on large meatpackers in the first place.
With a master’s degree from New Mexico State University in Animal Science in hand, generational farmer/rancher Matt Herrington returned home to the Gila Valley and started Herrington Cattle a few years back. For some time, he’d been percolating on a unique business model to create a program to improve the quality and availability of local beef to Arizona families. He launched Copper Star Beef® a registered brand name under Herrington Cattle, LLC in early 2020 just as the pandemic was spreading globally.
Also, Graham County Farm Bureau President and active in Arizona Farm Bureau’s Young Farmer & Rancher program, Herrington and wife, Kelsey, tell you upfront what they’re passionate about Family, Ranching families producing quality beef, Remembering our heritage, embracing the technology of the present, looking forward to the potential of the future and Win-Win Relationships.
Business models like Herrington’s won’t solve all our market issues in the complex and just-in-time food supply chain market, but they reflect a growing awareness of our pain points in the beef industry. Although the massive disruptions in the food supply chain that occurred in March and April are not likely to be repeated (or at least often), the numbers explain the drama of the situation as it occurred. Some market estimates had meat production overall falling by 25% or more in April and May: Pork was down by 35%, beef was down by 33% and chicken was down by 10%.
Much of the drop was due to plant closures resulting from outbreaks of COVID-19 at some operations and fears at other plants of the novel coronavirus spreading. Additionally, as plants instituted protections for employees including spacing on the assembly line, output dropped. At the same time, retail consumer demand in the grocery store increased as much at 60% overnight in some regions of the country.
Amazingly, cattle, beef and chicken production levels are now back to near-normal, according to the U.S. Department of Agriculture, which says beef and chicken production is at 98% of last year’s levels and, pork is at 95% at last reported levels.
It’s been stated that even if Arizona had more regional meatpacking plants, the disruptions experienced during the height of the pandemic could easily impact smaller plants. But increased options for consumers tapping into the “local” market would mean even during unusual disruptions both beef producers and consumers would have more flexibility.
So, since Herrington certainly had one view on what was going on with local markets, as things have settled down, I wanted to ask him how he thought the market was shaking out.
Arizona Agriculture: Talk to me about your take on the U.S. beef market.
Herrington: The demand for beef exists, but our system has some major issues. Although there are many different opinions about how to fix these issues, I think most would agree that it has some fundamental problems.
When four meatpackers control 80% of the beef in our country, any closure or other hiccup including a pandemic can cause a major ripple effect in the beef industry negatively impacting feeders and cow/calf producers alike.
This was magnified this year as plants closed due to the spread of illness and demand for beef increased due to supply chain uncertainty. Live cattle prices tanked, and boxed beef prices went up. I believe if more moderate regional plants existed, these ripple effects would be smaller and less dramatic and damaging to the industry.
Arizona Agriculture: What about Arizona’s beef market?
Herrington: More quality cattle are being produced in Arizona than ever before. We have good seed stock producers offering good genetics. We are also seeing improvements in herd health and other management practices. Overall, I feel like our industry is limited because of our distance from larger processing plants and feedlots.
Arizona Agriculture: What’s your take on the local beef market in Arizona and its potential?
Herrington: We have a robust urban population that is growing every year. The demand for beef, in general, is good in our state and the demand for local beef is growing. It seems like there has been an increased interest in fitness and nutrition over the last several years, with diets like the keto diet helping increase demand as well. I think there is a lot of potential to keep Arizona beef right here in the state. A local, quality, dry-aged beef product is something the traditional supply chain cannot produce. I think many people in Arizona want quality beef and are willing to pay a premium for it. But again, we have some major limitations and challenges when it comes to processing capabilities.
Arizona Agriculture: Tell me a bit more about your business, Copper Star Beef. What inspired you to see the need for it?
Herrington: The premise for creating Copper Star Beef was helping cattle producers and our industry to thrive. Developing a brand of local beef that producers can participate in is a big part of it. But we also offer other services such as breeding, feeding, and marketing cattle. The need that I saw is the need for more control over the market. Sure, there are plenty of ways to improve and maximize profit in the traditional market, but the more control producers can have the better.
Arizona Agriculture: While I understand that in your area a new harvest plant is being constructed, what’s the potential for other plants throughout the state?
Herrington: Potential for new Arizona plants exists but there are some good reasons why we don't see them popping up left and right. Processing plants require a great deal of capital just to get them built. Regulations and labor are big challenges as well.
Arizona Agriculture: On our Fill Your Plate website, Arizona Farm Bureau has noted a surge in interest in local beef. Talk about current and ongoing demand?
Herrington: Most of the surge was probably a result of issues associated with Covid-19. The demand seems to have slowed from the peak several months ago, but I hope people learned not to take the food supply chain for granted.
Arizona Agriculture: What do you foresee for the Arizona beef market. Is local beef a helpful mix for our Arizona ranchers as they try to diversify in this challenging market?
Herrington: I believe that marketing local beef is a good option to mix in and help producers diversify. We are not set up to market all the cattle in Arizona locally. But we can start to market some that way and grow with the demand.
Editor's Note: This article originally appeared in the October 2020 issue of Arizona Agriculture.