Derrell Peel: Grocery Disruptions Amid Beef Processing Chaos

An empty grocery store meat case in March.
An empty grocery store meat case in March.

COVID-19 continues to sweep through packing plant workers leading to severe disruptions in beef processing.  Estimated cattle slaughter for the week ending May 2 was 425,000 head, down 38 percent year-over-year.  Total cattle slaughter has averaged 26.4 percent lower than last year over the past four weeks, a decrease of 689,000 head and a little more than one week of cattle slaughter at this time of year.  The backlog of slaughter cattle is growing rapidly.

Corresponding to slaughter decreases, beef production was down over 35 percent year-over-year last week, with average weekly beef production the past four weeks down 25 percent from the same period last year.  Over the last four weeks, total beef production was down 520 million pounds year-over-year.  For the first 14 weeks of the year, before the current reductions started, average weekly beef production was 525 million pounds.  This means that one of the last four weeks of beef production has been lost due to decreased beef packing capacity. 

Grocery consumers first noticed beef supply disruptions in March when the shutdown of food service shifted beef demand largely onto the retail grocery side.  The resulting supply chain bottlenecks and surge in grocery demand resulted in temporary shortages in grocery supply. 

The supply chain bottlenecks continue, though with some time we have seen limited ability to shift some product from food service to retail.   In some cases, retail label and packaging requirements have been exempted temporarily and consumers can find food service packages, often in bulk quantities, available at retail grocery.

Consumers may not notice or understand the difference, but the continuing disruptions in beef availability in May are the result of the current decreases in beef production in additional to the continuing supply chain restrictions.  The situation may become more acute as food service demand rebuilds when restaurants reopen. 

While the current shortages are real, it should be emphasized that they are temporary and do not imply an overall lack of beef supply in the country.  The annual forecast of beef production for 2020 has not been reduced from the expectation of a record level of 27.9 billion pounds.  The current situation simply means a change in the timing of that production over a few weeks. 

Given when packing plant workers began to be impacted and the additional attention now focused on protecting worker health, it is likely that we are currently at or very near the worst point of packing plant disruptions. 

However, it is unclear how fast plants will resume production levels in the coming weeks.  It is likely that the effective capacity will be reduced permanently or certainly for the foreseeable future because of the safety changes needed at packing plants.  The impacts on cattle markets will linger for many weeks before backlogs are cleaned up and markets are current again.  


Latest News

Three Keys to Quality Colostrum for Beef Calves

Calves are wholly dependent on colostrum from their mothers and the instant a calf is born, a clock begins ticking on its colostrum intake that can have lasting effects on its health and productivity

12 min ago
Livestock Producers on Level Playing Field Thanks to MOU Between USDA and FDA

USDA announces the finalization of a MOU with FDA outlining responsibilities concerning the regulation of certain animals developed using genetic engineering that are intended for agricultural purposes. 

1 hour ago
Feedyard cattle
Optigrid 45 Receives Combination Approvals For Finishing Feedlot Cattle

The combination approvals allow Optigrid 45 to be used with other feed additives commonly fed to feedlot cattle, including monensin, tylosin and melengestrol.

5 min ago
Ty Bayer
Ty Bayer Is Red Angus Herdsman of the Year

Ty Bayer, Ringle, Wisconsin, was selected as the 2021 Red Angus Herdsman of the Year at the National Red Angus Open Show during Cattlemen’s Congress in Oklahoma City.

16 min ago
Feed Sustainability: Moving the Animal Protein Industry Forward

As the animal protein industry continues to find innovative ways to decrease the carbon footprint of animal products, a new resource guide may help move those efforts forward.

17 min ago
AL Ranch
Merck Announces Bovilis Nasalgen 3-PMH Intranasal BRD vaccine

Merck Animal Health has announced that Bovilis Nasalgen 3-PMH, the first intranasal vaccine, is now available to protect cattle from five of the most common pneumonia-causing viral and bacterial pathogens.

1 hour ago