Applied Economics Teaching Resources

an AAEA Journal

Agricultural and Applied Economics Association

Case Study

Economic Dynamics in the Beef Food Supply Chain under Pandemic Conditions

Grace Melo(a), Luis Peña-Lévano(b), and Kori Luengo(c)
Texas A&M University(a), University of Wisconsin River Falls (b), and Pontificia Universidad Católica de Chile(c)

JEL Codes: A22, A23, A30, Q13, Q11
Keywords: Case study, beef, processed food, meat supply, marketing channel, multi-sector model

Publish Date: May 25, 2022
Volume 4, Issue 4

View Full Article (PDF) | Request Teaching Notes/Supplemental Materials

Abstract

This case study discusses the potential effects of COVID-19 pandemic on the U.S. beef market during the first half of 2020. This sector confronted significant economic distortions caused by the increasing rate of infection in meat processing and packaging plants. We illustrate the COVID-19 related effects on the beef industry by using cattle-meat marketing channel framework, which comprises of two markets: cattle raw meat cuts supplied by farmers, and retailed processed meat sold by retailers and wholesale markets to final consumers as packed and processed products. The case study discusses different supply and demand shocks affecting the meat market system during and after the lockdown period. The article also explores the potential changes in equilibrium prices in alternative meat markets and how these could affect prices in conventional meat products. The teaching note discusses the objectives and provides further recommendations on the delivery of the case study, including a team peer evaluation.

About the Authors: Grace Melo is an Accountability, Climate, Equity, and Scholarship (ACES) Faculty Fellow at Texas A&M University. Luis Luis Peña-Lévano is an Assistant Professor at the University of Wisconsin River Falls (Corresponding author: luis.penalevano@uwrf.edu). Kori Luengo is an Agronomic Engineer at the Pontificia Universidad Católica de Chile.

Copyright is governed under Creative Commons CC BY-NC-SA

References

Chaney, S., and K. King. 2020. “Over 3.8 Million Americans Filed for Jobless Benefits Last Week as States Struggle With Coronavirus Claims Surge.” The Wall Street Journal. https://www.wsj.com/articles/states-struggle-with-coronavirus-unemployment-claims-surge-11588239004

Corkery, M., and D. Yaffe-Bellany. 2020. “The Food Chainʼs Weakest Link: Slaughterhouses.” The New York Times. https://www.nytimes.com/2020/04/18/business/coronavirus-meat-slaughterhouses.html

Cowles, C. 2020. “The Week in Business: Not Enough Meat, and Too Much Oil.” The New York Times. https://www.nytimes.com/2020/04/26/business/the-week-in-business-coronavirus-jobs.html

Crutsinger, M. 2020. “Economists Agree: No Quick Rebound from Recession Is Likely.” The Associated Press. https://apnews.com/article/virus-outbreak-us-news-business-ap-top-news-economy-e0d04987133c2f48992b98ace0a1e846

Dixon, P.B., and M.T. Rimmer. 2021. “Who Will Pay for Improved Health Standards in US Meat-Processing Plants? Simulation Results from the USAGE Model.” Victoria University, Centre of Policy Studies/IMPACT Centre.

Federal Reserve Economic Data. 2021. “Personal Income.” https://fred.stlouisfed.org/series/PI

Gabbett, R. 2017. “Protein Preferences in North America: Nielsen.” Meatingplace. https://www.meatingplace.com/Member/Login?ReturnUrl=%2fIndustry%2fNews%2fDetails%2f75368

Groves, S. 2020. “Some Meat Plants Reopen, but Trump Order May Not Be Cure-All.” The Associated Press. https://apnews.com/article/6c6711b16d68ebde1b2cd8060f431774

Haberman, C. 2020. “Plant-Based Meat Has Roots in the 1970s: Retro Report.” New York Times. https://www.nytimes.com/2020/02/16/us/plant-based-meat-has-roots-in-the-1970s.html

Irwin, N. 2021. “Unemployment Is High. Why Are Businesses Struggling to Hire?” The New York Times. https://www.nytimes.com/2021/04/16/upshot/unemployment-pandemic-worker-shortages.html

Johansson, R. 2020. “Will COVID-19 Threaten Availability and Affordability of our Food?” https://www.usda.gov/media/blog/2020/04/16/will-covid-19-threaten-availability-and-affordability-our-food

Kiesel, K., N. Zuo, Z.T. Plakias, L.M. Peña-Lévano, A. Barkley, K. Lacy, E. Hanson, and J. Treme. 2020. “Enhancing Student Engagement in a Changing Academic Environment-Tested Innovations for Traditional Classes and Online Teaching.” Applied Economics Teaching Resources (AETR) 2.

Ledbetter, K. 2021. “Animal Agriculture Markets Resilient Almost a Year into COVID-19 Pandemic.” AgriLife Today—Texas A&M.

Lusk, J. 2021. “Trends in Demand for Plant-Based Meat.” http://jaysonlusk.com/blog/2021/1/11/trends-in-demand-for-plant-based-meat

McFadden, B.R., T. Malone, M. Kecinski, and K.D. Messer. 2020. “COVID‐19 Induced Stigma in U.S. Consumers: Evidence and Implications.” American Journal of Agricultural Economics.

Melo, G., D. Sanhueza, S. Morales, and L. Peña-Lévano. 2021. “What Does the Pandemic Mean for Experiential Learning? Lessons from Latin America.” Applied Economics Teaching Resources (AETR) 3(3):131–146.

Mervosh, S., J.C. Lee, L. Gamio, and N. Popovich. 2020. “See Which States Are Reopening and Which Are Still Shut Down.” The New York Times. https://www.nytimes.com/interactive/2020/us/states-reopen-map-coronavirus.html

Nierenberg, A. 2020. “Plant-Based ‘Meats’ Catch On in the Pandemic.” New York Times. https://www.nytimes.com/2020/05/22/dining/plant-based-meats-coronavirus.html

Norwood, F.B., and J.L. Lusk. 2018. Agricultural Marketing and Price Analysis. Long Grove IL: Waveland Press.

Pitt, D. 2020. “Virus Is Expected to Reduce Meat Selection and Raise Prices.” The Associated Press. https://apnews.com/article/prices-mo-state-wire-in-state-wire-ia-state-wire-sd-state-wire-cb9fd324e9e3276dd56075a78223b7bb

Peña-Lévano, L., 2020. “Personalizing Online Classes: The Use of Evaluation and Participation Tools.” Applied Economics Teaching Resources (AETR) 2(2):51–58.

Peña-Lévano, L., S. Burney, and C. Adams. 2020a. “Labor Disruptions Caused by COVID-19 in the U.S. Agriculture and Nonfarm Industries.” Choices 35(3):1–12.

Peña-Lévano, L., S. Burney, G. Melo, and C. Escalante. 2020b. “COVID-19: Effects on US Labor, Supply Chains and Consumption Imagery Article.” Choices 35(3).

Peña-Lévano, L., and G. Melo. 2022. “Adaptation of Teaching Strategies During the COVID-19 Pandemic.” Applied Economics Teaching Resources (AETR) 4(1):12 – 27.

Plumer, B. 2020. “The Meat Business, a Big Contributor to Climate Change, Faces Major Tests.” The New York Times. https://www.nytimes.com/2020/04/17/climate/meat-industry-climate-impact.html#:~:text=Studies%20have%20found%20that%20beef,proteins%20like%20soy%20or%20beans

Restuccia, A., and J. Bunge. 2020. “Trump Takes Executive Action to Keep Meat-Processing Plants Open.” Wall Street Journal. https://www.wsj.com/articles/trump-to-take-executive-action-to-keep-meat-processing-plants-open-11588099443

Reuters. 2020. “Trump Administration Faces Pressure to Buy Food for the Needy, Avoid Waste.” The New York Times. https://www.reuters.com/article/us-health-coronavirus-usa-food-idUSKCN21W2VW

Searcey, D. 2020. “Tight-Knit Company Towns Reel as Coronavirus Rolls Through.” The New York Times. https://www.nytimes.com/2020/04/22/us/coronavirus-workplaces-midwest.html

Skidmore, S. 2020. “Relief Checks Are a Lifeline for Some, a Cushion for Others.” The Associated Press. https://apnews.com/article/virus-outbreak-lifestyle-business-ap-top-news-250ff4425bce2ad0e0a7c67b7b1aca4d

Terazano, E., and G. Meyer. 2020. “Pandemic Accelerates Shift to Meat Substitutes.” Financial Times. https://www.ft.com/content/0127984a-6def-4040-9bca-002b6ffd4e0a

Tonsor, G.T., J.L. Lusk, and S.L. Tonsor. 2021. “Meat Demand Monitor during COVID-19.” Animals 11:1040.

Yaffe-Bellany, D. 2019. “The New Makers of Plant-Based Meat? Big Meat Companies.” New York Times. https://www.nytimes.com/2019/10/14/business/the-new-makers-of-plant-based-meat-big-meat-companies.html

Yang, R., K.C. Raper, and J.R. Pruitt. 2019. “The Influence of Recession and Income Strata on Consumer Demand for Protein Sources.” Applied Economics 51:4615–4628.