Data from USDA's monthly cattle on feed reports and rising feeder cattle prices in July suggest cattle feeders have pen space to fill and the backlog of cattle is now diminishing.
Since the week of May 16 when the beef cutout hit record highs, the price has fallen 56%. Simultaneously, weekly beef production has increased 29% and carcass weights are averaging 37 pounds more than last year.
The U.S. beef industry is a forage-based industry and that one distinction from the pork and poultry industries will hinder any future vertical integration, says John Nalivka.
U.S. cattle slaughter was up an estimated 25% over the previous holiday-shortened week as beef packers gradually return to near-normal capacity utilization.
"The concept of sustainability that will be tested the next few years concerns economic security. Our U.S. public debt has become unsustainable, an issue that must be addressed."
Some operational changes made by the packing and processing centers are likely to remain after the COVID-19 pandemic is over, leaving some higher costs in the supply-chain.
Plant closings and slowdowns are major symptoms of the meat and poultry industries’ disruption due to COVID-19 and product distribution and livestock production are also critical to a smoothly running supply chain.
