Milk, cattle, and hog at lowest commodity prices in almost 20 years

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Hog, dairy and cattle farmers are struggling with markets down 30 to 40% since Jan, but many prices are going up at the grocery store.

Sam Custer is the Interim Assistant Director for Ohio State University Extension, Agriculture and Natural Resources. He also works locally as the Darke County Ag Educator. Custer said at the farm level it will be a very stressful year.

 “Out of all of these livestock commodities whether it’s milk or meat at the farms they’re at prices that we probably haven’t seen in 20 years,” Custer said. “They’re that low.” 

Prices at the grocery store are still going up. According to the U.S. Bureau of Labor Statistics, for March in the Midwest all uncooked ground beef was up 2.2% since Feb.

All ham including lunch slices and canned ham was up 17.2% since Feb.  The average price per pound for ham was $2.94. In Mar. that price was up to $3.45.

Milk prices were up 6.5% in the Midwest between Feb. and Mar. Since last Mar. prices have increased by 25.5% in the Midwest.

“The reason why we may be paying a higher price at the grocery store is that whole processing distribution chain,” Custer said.

Dairy products are no longer being sold to schools and restaurants have cut back. Custer said more milk need to be put into half gallon and gallon jugs instead of being distributed in half pint bottles.

“We know that we don’t have that captive audience,” Custer said. “There’s less children probably drinking milk for lunch today than would have normally if they would have been in school, so that market has changed significantly there.“ 

Schools and restaurants aren’t needing the supply of 15 pound bags of cheese.

“We’ve got to get that put back in an eight-ounce package that we can consume here locally,” Custer said.

This impacts the way dairy processing plants are operating and selling the material. Custer said at the farm level this has resulted in a commodity price drop of 32% for class 4 milk.

Commodity prices for hogs are down 28% and cattle is down 33%. Prices at the grocery store for the cheaper cuts of meat are higher, but Custer said the higher end cuts are going down in price.

“When I go to a nice restaurant I am going to get high dollar cut of steak,” Custer said. “That’s kind of a typical thing I think most consumers would do.”

Fillet, New York Strip, and Ribeye are all cuts in ample supply because less people are eating at restaurants Custer said.

“You see those at the grocery store have come down quite a bit in price. We used to pay $10 a pound for Ribeye,” Custer said. “They have really backed off from that price significantly in many of our grocery stores.”

On the hog it’s bacon that is in lower demand. Custer said less people fry bacon at home.

“When we go out to buy breakfast at a restaurant, we sit down at a restaurant, we eat a lot of bacon, Custer said. “That bacon market has really dropped off since we have gone into a stay at home type setting across the country.”

On top of that, Custer said processing facilities are running at less than full strength because of the Coronavirus. Smithfield Foods in Sioux Falls, South Dakota is closed indefinitely. This has a trickle-down effect.

“Producers that had hogs that were supposed to go to Sioux Falls they had to find a place to go to,” Custer said. “They may have sent those up to Coldwater Michigan where Ohio hogs go to be processed. So that might bring a surplus of animals to that area which will cause a slow down.”

Custer said there is hope. A couple of local facilities are increasing production.   

“Caven’s Meats in Miami County, Copey’s in Clark County I heard brought in extra shifts to process more meat as we see an uptick and an interest in buying local,” Custer said. “So, there is a movement that way.”

These are beef and pork facilities.

“There may be others,” Custer said, “but those are just the two that I got on our report this morning out of Columbus.”  

Custer said there is a Coronavirus Aid, Relief and Economic Security Act being looked at that will help the agriculture community

“We look for that over the next month for the federal government to provide some support for the Ag community. We don’t know how that’s going to work yet, but that is to come at least provide some assistance hopefully with some cash flow issues here this spring.”  

As farmers start to plant corn and soy beans, Custer said they are hoping for warmer and drier conditions the next few weeks.

“We are a little bit cold right now, but farmers are actively planting a crop this week and will continue to plant for the next few weeks,” Custer said. “Hopefully we can get a good crop in the ground and we will get some good weather conditions, get this market turned around, and begin to open up the world markets.”

Custer said being able to export commodities has helped the agriculture community prosper over the last 20 years.

“Hopefully we can get things back up and running here, we can get behind this virus and move forward,” Custer said.     

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