August 2020 Impact Assessment
About NMMPAN
NMPAN is a university Extension-based national community of practice of people and organizations helping small meat processors thrive by growing our shared wealth of information and innovation. Small and mid-sized plants — when available at all — can lack capacity, equipment, appropriate inspection status, and the human and financial capital to upgrade or expand. To meet this need, NMPAN assists meat processors, producers, buyers, regulators, and others involved in this growing sector by coordinating, distributing, and developing information and resources to improve access to processing infrastructure and the long-term stability of this sector.
Impacts of COVID-19
- Unprecedented consumer demand for local/regional meat
- Meat processors are booked out way in advance, have positive cash flow and can keep their employees busy year-round
- Many meat producers have launched direct-to-consumer sales, which diversifies their markets and spreads risk
- Meat destined for restaurant/food service sectors had to be redirected, major loss of market
- Processors are overworked as are their employees
- Some meat processing workers have been infected with COVID, although less so in small and very small meat plants- but the risk is still there.
- Contract livestock and poultry producers lost markets, had to euthanize animals in some cases
Obstacles to Sector Response
- Cutting for wholesale markets (primals, sub-primals) and cutting for retail are very different, require different equipment, skillsets, etc.
- Starting a DTC brand takes time and marketing know-how, doesn’t happen easily overnight
- Shipping meat to consumers is challenging, backorder on boxes and insulation, shipping carriers have had delays too
- Despite having high demand, small meat plants cannot find more workers
- Some areas of the country have limited options for animal slaughter, farmers having challenges getting slaughter appointments
Successful Marketing Adaptations in Response to COVID-19
- Pivoting to direct to consumer sales
- Shipping meat direct to doorstep
- Selling bulk meat (wholes, halves and quarters) to fill people’s freezers
- Meat processors adding retail counters into their shops to serve local community
- Moving from selling to restaurants to selling to communities, such as Native American reservations
Economic Impact on Sector
Consumers have seen meat prices increase dramatically in the stores and availability decline, although that seems to not be the case anymore. New customers are looking for local & regionally produced meat and filling their freezers, not only as a food security strategy but also to get meat economically. Producers are losing some markets (such as wholesale) and seeing some farmers markets close or decline. Contract producers are losing vast market share because their animals can’t get processed, but many are moving towards selling more direct. Producers also have excess demand and often not enough product because they can’t get more animals processed. Many are sold out for the year. New costs to producers include renting or paying for cold storage for their meat, building a brand and marketing costs, costs of supplies for shipping meat. Meat processors have seen an increase in demand so they generally are earning more revenue. If the processors also wholesaled meat, they may have lost some revenue. But if they were able to pivot towards more DTC markets, they are likely in good shape.
Impact on Sector Members
Contract and CAFO livestock and poultry producers have been hugely impacted. Not only having to euthanize animals, but not getting paid for them either (after all the costs that went into them). More niche and direct to consumer producers are generally doing fine and better with extra demand for their meat. Extremely rural producers without access to consumers may struggle more, especially if they are unable to ship meat. Larger producers and processors that wholesaled a sizable chunk of their production also saw lost revenue. I don’t think any races or ethnicities have suffered disproportionately, although certainly meat processing workers have suffered immensely from COVID, both directly and indirectly.
Desired Data and Technical Assistance
Data:
- Consumer meat purchasing behavior during COVID and predictions for consumer behavior post-COVID (or if COVID drags on for another year or two).
- What parts of the country truly have a significant shortage of slaughter capacity?
- How has lack of competition (and monopolization) harmed mid-scale and small-scale meat producers and processors? And what could be done about that.
- Best practices for preventing COVID outbreaks in small meat plants (based on scientific evidence).
Technical Assistance:
Being able to expand the work of NMPAN (the Niche Meat Processor Assistance Network) so that we can keep up with the high demand for our technical assistance. We are a staff of one yet service the entire country. Also, being able to help small plants apply for grants- there are now over 13 states using CARES ACT funding to bolster their local and regional meat sectors. Many of these plant operators don’t have the time or technical expertise to fill out the grant applications. Also, more Extension specialists that can help conventional CAFO producers pivot towards developing their own brands and markets and getting out from restrictive contracts with large packers.
Additional Information
While direct-to-consumer sales has better margins and has seen unprecedented demand, the transaction costs are high. Both producers and processors have already seen a slackening in their demand as grocery stores get restocked with inexpensive meat. There is also worry that as the economy worsens and unemployment runs out, that consumers will be very price sensitive and go back to “cheap meat”.
Contact Information for NMPAN:
Rebecca Thistlethwaite thistler@oregonstate.edu
