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Pandemic brought challenge and opportunity to custom meatpackers

Jaclyn Krymowski for Progressive Cattle Published on 24 June 2021
Ben Neale

The events of 2020 hit the custom processing sector like a sledgehammer.

In addition to the struggles faced by all small businesses, custom meat processors found themselves in a unique bind as larger plants were forced to slow or even shut down, and producers flocked to smaller businesses to get their animals harvested.

And with a rocky supply chain and empty grocery store meat cases, people raced to their local meat processors. While this brought greater business opportunities, it also pushed these facilities to their limits.

“I think cattle producers have to always be prepared for shifts in the market and consider alternative marketing options to provide some flexibility,” advises Amanda Blair, professor and extension meat specialist with South Dakota State University. “It’s important to recognize that beef demand has remained strong through COVID-19, and producers can continue promoting beef and helping to drive demand.”

A world of new challenges

When the pandemic hit, its challenges revealed themselves very quickly. Multiple factors such as labor shortages, high demand and reduced capacity created a bottleneck situation in the industry.

“Labor shortages resulted in decreased weekly slaughter, which created an excess supply of live cattle,” Blair explains.

She adds that limited capacity also led to an increase in beef products while creating an excess of fed cattle. As a result, slaughter saw a peak reduction of 35% year-over-year at the end of April 2020. In response, small and local packers across the nation needed to change their status quo.

“We added capacity to multiple shifts and had to hire more people,” says Andy Shaw of Cypress Valley Meats, a custom processor in central Arkansas. “Ultimately, we had to expand our operation from an infrastructure and equipment standpoint.”

Nate Holmes at Cypress Valley Meats

Cypress Valley serves over 2,000 farmers in their region from four locations. They provide processing services for local producers that distribute to outlets such as farmers markets, restaurants and retailers. That expansion, Shaw says, was necessary to accommodate for the mounting increase in customer demand, but did put some financial strain on the business.

“It’s hard to scale up quickly to meet that kind of demand when it comes all at once,” Shaw explains. “I think it highlights the importance of a small processor.”

A similar story unfolded for Light Hill Meats Custom Processing in Lynnville, Tennessee. Owner Ben Neale said that their business growth was relatively slow from the time they opened their doors in 2017 up until COVID-19 hit. When that happened, many people in the area rushed to have their cattle processed.

“We were averaging 240 to 250 calls a day of people trying to get appointments,” Neale says.

A big part of the panic was people wanting to stock up and fearful of long-term supply chain impacts. Neale adds that a lot of people went to buy deep freezers to store meat and other foods. “It at least gets in the back of your mind that you may want to have more than a 10-day supply of food on hand,” he says.

Making it work

Processors across the nation needed to respond very quickly to keep the orders flowing as smoothly as possible. New health restrictions and precautions required some out-of-the-box thinking.

Last March, Cypress Valley Meats made the move to curbside services to reduce contact levels. They were able to keep business hours the same at their locations but were forced to close their lobbies. However, their staff continued to meet customers outside and take orders.

In the case of Light Hill, not only did Neale need to double his staff, but they also increased their working hours between 60 and 70 hours a week. When this caused some injuries, they were forced to cut back on those despite the backup.

However, one of the most important things Neale reports doing was the purchase of a new finished-product freezer – thanks in part to special grants during the pandemic – which gave them the much-needed space to service more clients.

“Two years ago, I was calling and trying to find business,” Neale recalls, noting that their facility is now at full capacity. “And now we’re going to have almost double the number.”

Neale also says that the state of Tennessee will see an increase in small processing facilities between 30% and 40% in the near future. However, whether that same level of business will hold remains to be seen.

Moving forward

One of the pandemic’s silver linings has been an increased enthusiasm for supporting small and local businesses, especially in the food sector. Many of the supply chain backups have caused some to be weary of the mainstream companies.

Shaw says he is optimistic about the growth of local processors and sees some room for growth for new businesses entering.

“But I think we also have to be careful,” Shaw added. “These plants need to operate close to capacity to be profitable. If we overproduce … and don’t have enough demand because we’ve overshot the market, it could put a strain on small processors.”

The demand from consumers today is real, Shaw says, but at the same time the response to it needs to be appropriate.

Neale says they intend to stay with their current size and capacity at Light Hill Meats. Now that the worst of the pandemic is over, they are still booked out with orders until next year. However, he says they are running into issues with more appointments ending up as no-shows. In the future, they may need to resort to charging deposits to hold appointments.

While he appreciates the renewed interest in local foods, Neale is wary of consumers still wanting low-cost meat products.

“We can’t compete with the efficiencies of JBS, Tyson or anything like that just by scale,” Neale explains. “There has to be an understanding of the distribution chain to where we find a way to stay competitive on price and product quality.”

Neale encourages farmers to avoid the urge to commoditize the prices of their meats and hold to high-quality prices. But fortunately, he notes that as more folks have come to them, many have found reason to stay as repeat customers.

“There’s a good portion of people now that have tasted a difference and have deep freezers at home, and those options I think are there.”

Shaw concurs, attributing the pandemic to having given a new appreciation of the meat business. “I think that it has brought a light to some heroes in this industry. Our team and other processors across the nation go to work every day. They’ve got a spotlight on them currently that they haven’t had in the past, and I think that it’s great to know that they’re finally getting the appreciation that they definitely deserve.”  end mark

PHOTO 1: Ben Neale stands in front of his custom meat-packing facility that started in 2017. Photo by Lauren Neale.

PHOTO 2: Cypress Valley Meats serves over 2,000 farmers in the central Arkansas region. Photo provided by Andy Shaw.

Jaclyn Krymowski is a freelancer based in Ohio.

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