BY: JO CUTTANCE
T he US meat processing industry has been brought to its knees by Covid-19 says US meat and livestock industry commentator Steve Kay.
Writing for Australia’s Beef Central, Kay said worker absenteeism and safety measures meant that beef and pork processing plants were running at less than 60% capacity.
“The decline has been staggering both in its speed and magnitude.”
In five weeks to May 2, the year-to-date cattle slaughter total went from being 203,000 head above last year to 466,000 head below.
The last week of April’s slaughter represented 58.5% of total industry capacity of 726,000 head/week. Total hog slaughter for the same week of 1.5 million head represented 55.7% of total capacity.
Reduced utilisation and other factors meant operating costs had quadrupled. Fixed costs had increased because of the new measures to protect workers’ health. Processors also paid workers staying at home full wages and benefits.
President Trump’s executive order required meat and poultry processing plants to stay open.
A red meat shortage loomed and processors were asking high prices. In one week with daily price rises, the choice cutout advanced US$74.19/cwt (50.8kg) to US$367.56/cwt, the select cutout advanced US$71.14/ to US$350.16. Pork cutout advanced an unprecedented US$29.58/cwt last week to US $105.52/cwt.
Slaughter for the last week in April was 37% below the same week last year. Beef production was down about 34%, pork production down 25%.
Covid-19 had also affected the price of US grain cattle, and the normal flow of cattle from range to feedlot. In April cattle prices fell below US$100 per cwt for the first time since October 2016.
Kay believed the US cattle and beef markets might not return to any semblance of normality for at least a year from now.