Signs Of Recovery In Beef Packing…But How Fast?

( )

COVID-19 began impacting workers at beef packing plants in early April. Over last five weeks, cattle slaughter decreased by an average of 27 percent year over year. This compares to the previous five weeks in March when cattle slaughter averaged 5.5 percent higher than year ago levels.  The impact became progressively worse for four weeks with weekly slaughter dropping by 17.1 percent the week of April 11 to a decrease of 36.8 percent year-over-year the week ending May 2. 

There is glimmer of hope, however.  Last week estimated cattle slaughter was 452,000 head, still down 32.2 percent year over year, but up 6.4 percent from the prior week.  This hopefully indicates the beginning of recovery of packing capacity in the coming weeks.  Risks remain however and it is not clear how fast packing plant capacity will recover.  New safety measures and work protocols likely mean that effective maximum capacity in beef packing plants will be reduced compared to pre-COVID-19 levels.  

It will likely take many weeks for slaughter rates to catch up with the growing backlog of fed cattle and get the industry current once again.  Meantime, all sectors of the industry are responding to the need to slow cattle down and hold them longer in a variety of production settings before proceeding to finish in feedlots.  Fed cattle weights are increasing and pushing carcass weights higher counter-seasonally. The latest actual weekly slaughter shows steer carcass weights at 891 pounds, higher than the three prior weeks and up 37 pounds from the same period last year. Heifer carcasses are currently 24 pounds heavier year-over-year.  Steer and heifer carcass weights typically reach a seasonal low in late May.

Beef production dropped sharply in April resulting in some shortages of fresh beef in retail grocery stores and restaurants.  In the five weeks ending May 9, total beef production was down nearly 690 million pounds year over year. In the worst week ending May 2, estimated total beef production was 347.1 million pounds, down 190.5 million pounds from the same week last year.   Estimated beef production last week was down 31 percent year over year but was up 5.9 percent from the prior week, reflecting the slight increase in cattle slaughter last week. 

Total 2020 beef production forecasts have only been slightly reduced from previous projections and are still at or near a record level of 27.2 billion pounds.  However, the timing during the year is drastically altered with second quarter beef production forecast down 13.3 percent year over year.  Beef production will be pushed into the third quarter, which is forecast to be up 5.4 percent compared to last year.  Fourth quarter beef production is currently forecast to be just slightly higher year over year.

Related stories:

Bottleneck Eases, Wholesale Beef Marches Higher


Latest News

Research Highlights: The State of the Current Beef Consumer

This white paper, put together by the National Cattlemen's Beef Association, offers a snapshot of how domestic consumers have responded to the unprecedented events of 2020 as well as a long-term outlook. 

2 hours ago
Ben Tyner
Missing B.C. Rancher’s Family Offers Reward

Wyoming native Ben Tyner disappeared two years ago from the British Columbia ranch he was managing. His family released a video asking the public for information.

2 hours ago
Newborn calf
Selk: Calving Assistance During And After Stage II

Despite our best efforts at bull selection and heifer development, cows or heifers occasionally need assistance at calving time. Here are recommendations on when to provide calving assistance for cows and heifers.

7 hours ago
Winter bale grazing
North Dakota To Consider Voluntary Checkoff

A North Dakota state representative has introduced legislation that would make the state's additional $1 beef checkoff voluntary. It would have no impact on the national Beef Checkoff.

1 day ago
Greg Hanes: What Have You Done for Me Lately?

In this commentary Greg Hanes, CEO of the Cattlemen's Beef Board, discusses the ways that Beef Checkoff dollars have been used in the past few months.

1 day ago
Cattle and hog feeding
Profit Tracker: Steady In The Red

Cattle and hog feeding margins were little changed last week, with both recording modest losses. Beef packers saw improved margins on significant gains in wholesale beef prices.

1 day ago