Rapid Drop in U.S. COVID-19 Cases Could Spur More Beef, Pork Demand
After a surge in COVID-19 cases during the holidays, COVID-19 cases look to be falling again. The U.S. data shows COVID-19 infection rates are now down to levels not seen since early fall, with the seven-day rolling average under 65,000 cases. The death rate is also seeing a dramatic improvement, with fatalities nearly 30% lower than the week prior, and hospitalizations are down 15% in that same time.
With the improvement in COVID-19 cases, signs are also point to a possible economic recovery from the COVID-19 pandemic. The possible recovery is also setting a bullish tone for meat demand, as analysts think it could spur a trend in consumers looking to return to some sense of normalcy.
Hospitilizations are falling rapidly, with just 9% of hospital beds nationally filled with Covid-19 patients, and that is now showing up in a rapid drop in Covid-related deaths as well. Good news for the economy and for commodity demand. #oatt — Arlan Suderman (@ArlanFF101) February 21, 2021
“I look at this box beef market, which has been incredibly resilient,” says Mark Gold of Top Third. “You've got to think there's incredible pent-up demand out here for cattle. I can't wait till I get my second COVID vaccine, and I can get into a good restaurant downtown Chicago and enjoy a great ribeye and get back to a little bit of normalcy.”
Gold thinks between now and summer the U.S. will see great strides in vaccinations. After we pass the one-year U.S. threshold in the pandemic, the U.S., Gold thinks more consumers will venture out to restaurants, which will help domestic demand.
“Hopefully, we'll get everybody vaccinated and get back to something close to normal sooner than later, and that makes me bullish on the cattle market long term,” says Gold.
Domestic Demand for Pork
Arlan Suderman of INTL FCStone thinks the same concept applies to other proteins, such as pork. Suderman says as more aid is also distributed, that will help increase spending for meats.
“Disposable income is high thanks to fiscal and monetary stimulus with consumers a lot of money in their pocket in over the last year, they've learned that they like these higher cuts of meat at home,” says Suderman. “We're going to build on that as restaurants reopen, we see strong domestic demand going forward.”
Online Top Producer Summit
Join Naomi Blohm, Mark Gold and Arlan Suderman for an in-depth marketing discussion during the Online Top Producer Summit. You can still register for the Online Top Producer Summit, which gives you access to content through March 31. Use the code “ONDEMAND” to take $25 off your registration fee.
Also, read more coverage of the Top Producer Summit this week.