On the ground in the US
11 May 2020
Rob Williams is MLA’s Regional Manager – North America, based in Washington DC. Here, he talks through the impacts of COVID-19 on the US meat and livestock industry, and how MLA is responding to the situation in-market.
What’s the current landscape for the meat industry in the US?
There are definitely a few changes at the moment. Looking at the supply chain, there’s a big disparity between live cattle prices and the box beef cutout prices, and when you add in the shutting of processing and packaging plants, that’s creating challenges.
Processing plants for all key proteins are being tested, but my assessment is that as long as these facilities are able to quickly respond to reopening, I only see this as a short-term effect.
Overall, cattle producers are really struggling in the US at the moment. There has been aid come from the United States Department of Agriculture (USDA) – a package of about US$19 billion – but we are expecting more to come to support those producers.
Are imports being impacted at all?
Definitely. The biggest challenge for imports at the moment is the disruptions at port of entry. The critical issue here has been cold storage capacity. Cold stores are filling up more rapidly as cuts normally used by foodservice channels aren’t being sold.
Labour shortages are also an issue as people are contracting the virus or are concerned about their health generally. Both of these are creating bottlenecks around ports where the cold storage is.
What’s the status of foodservice in the US at current?
Foodservice has taken the biggest hit in this unfortunate circumstance. By and large most of the restaurants here are closed.
There is hope in that some states are looking to open up again shortly, and some restaurants have managed to stay open through offering delivery and take-out options.
Restaurants have also been innovative through offering things like meal kits to cook at home and selling other pantry items that are hard to buy in supermarkets, so there has been a pivot in how these businesses are operating to try and see them through these tough times.
How’s retail travelling along? We’re seeing retail as busy as ever across many of our markets in Australia. Is it similar in the US?
The retailers here are doing really well at the moment. There’s been some challenges with things like labour shortages and social distancing causing supermarkets to stagger patrons, but retailers have handled this well.
In response to hoarding, retailers are moving their supply chains quickly to ensure there aren’t product shortages.
The move to online commerce has also been something retailers have taken advantage of, through pivoting to delivery and online direct-to-consumer. This is a model I think will stay with us even post COVID-19.
With the disruptions to foodservice and the changing landscape in the retail market, what’s MLA doing in the US to respond to this situation?
Our first response was to commission research into COVID-19 and its impacts on foodservice both now and after the virus. We’ll use this research to help get businesses back on track.
We’ve also had a big push towards digital, moving a lot of our programs online now that we can’t turn up to events and promote organically.
Other things we’re doing include changing our key messaging to centre around meals at home, geotargeting consumers and their shopping lists, and looking for occasions such as Mother’s Day to promote this as a good opportunity to gather as a family and celebrate with Aussie beef or lamb.
Are you working with local importers on the ground to assist them in this time?
We certainly are. We have some very good companies in the US who are loyal to the Australian brand so we’re getting alongside them to help them through.
We’ll also be working with these companies to amplify their social and digital campaigns and give them support on targeting premium cuts to consumers through educating them on cooking these at home.