Beef packing capacity rebound crucial

Livestock Outlook: Rising cattle supplies are continuing to face restricted packing capacity.

 

Lee Schulz, WallacesFarmer

May 22, 2020

 

Schulz is the ISU Extension livestock marketing economist

 

Temporary closures and slowdowns of packing plants due to the COVID-19 pandemic have created unprecedented product flow disruptions and price gyrations in the meat protein supply chain. Year-over-year declines in cattle slaughter progressively worsened through April. Weekly cattle slaughter dropped by 17% for the week ending April 11 to a decline of 35% for the week ending May 2. 

 

Week-over-week slaughter increases in early May fueled guarded optimism that the worst of packing plant disruptions are over. Still, more than a month and counting with severely reduced slaughter means a backlog of slaughter cattle is growing rapidly.

 

Packers place utmost concern on worker health, safety and availability. They have engineered controls such as workstation alignments and modifications, plus worker physical distancing measures where possible. How much these adjustments will reduce packing plant capacity is a huge unknown. Arbitrary 10% to 15% figures have been suggested, but they’re just speculation. Only time will tell. Ingenuity will be a huge factor.

 

Capacity rebound crucial ...

 

Economics at work ... 

 

Implications for retail prices ...

 

Outside factors to watch ...

 

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https://www.farmprogress.com/beef/beef-packing-capacity-rebound-crucial