Saturday Harvest Key To Erasing Backlogs

Will Feed Inc - Anne Burkholder, Feedyard in Nebraska ( Wyatt Bechtel )

America’s beef and pork packers have nearly recovered from slow-downs and shutterings caused by the coronavirus pandemic. Last week’s estimated cattle slaughter was estimated at 658,000 head, just 11,000 head (1.7%) below the same week a year ago. Hog slaughter was estimated at 2.457 million head, 18,000 head more (0.7%) than the same week a year ago.

The return of slaughter capacity to pre-coronavirus levels is good news, but the backlogs of cattle and hogs from the weeks of reduced capacity harvest remain a burden to producers in both markets. Analysts from both sectors say it will take months to work through the backlog of market-ready animals.

A key to working though those backlogs will be increasing Saturday operations for both beef and pork packers, and Sunday kills could be a possibility.

“Packers and labor could work together to achieve some Sunday slaughter,” according to the Livestock Marketing Information Center (LMIC). “A condition for the additional ramp-ups is the economic incentive for packers and labor to do so (i.e., wide packer gross margins and wage incentives for workers), along with labor feeling they have a safe working conditions.”

(LMIC says any Sunday slaughter would be reported by USDA as part of Monday.)

The potential of Saturday slaughter is evident during weeks with federal holidays. For instance, Federally Inspected cattle slaughter the Saturday after July 4th last year was 92,715 head.

"This past Saturday, the preliminary data from USDA showed cattle numbers slightly above year ago, up about 12,000 head," LMIC said. "Hog harvest on Saturdays this year has been rather consistently above 2019's, even during several weeks when slaughter was depressed. Last Saturday was reported at 230,000 head, that was an increase of about 160,000 head year-over-year."

This week’s cattle slaughter is showing signs of additional gains in volume as Monday saw a 2,000 head increase. More cattle, however, typically means lower prices and Monday saw lower prices again with a cash range of $98 to $105. Heavyweight and over-finished cattle traded at the low end of the price range.

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