Processing clogs and market bogs

Processing issues, and the market fallout, will be among the livestock sector’s major memories of 2020


By Alexis Stockford, Manitoba Co-operator (Canada)

January 7, 2021


If pork and beef producers had one image to sum up 2020, it might be a wrench gumming up the gears.


North America’s meat sector became a flashpoint as pandemic conditions put food supply chains to the test this spring. March and April saw a growing list of major meat plants, particularly in the beef and pork sectors, either go down temporarily or be forced to cut production due to COVID-19 cases among staff.


At one point the two Alberta beef plants representing 70 per cent of Canada’s beef-processing capacity were either closed or deeply affected, along with pork plants in Quebec, and a long list of U.S.-based plants that process Canadian livestock.


By April 23, H@ms Marketing estimated that about 15 per cent of U.S. pork capacity was down due to the pandemic, while another list of plants had slowed production.


Canadian weanling prices went into dramatic free fall as the U.S. pork market clogged. In Manitoba — normally a major exporter of piglets with about three million animals shipped to the U.S. annually — producers watched as U.S. finisher spaces failed to clear. Buyers for open-market piglets dried up. By mid-April, the Manitoba Pork Council said some producers were selling ISO weans at a loss in the cash market. Reports spread of producers taking no price for their ISO weans, while also paying for transport, to avoid culls. Contract prices, while not quite as dire, still took a dramatic hit, the pork council reported.


The hog market in general also saw downturns. Throughout late spring and summer 2020, the Canadian Pork Council estimated their producers were losing around $30 a head.


At the same time, both pork and beef producers expressed frustration with the gap between value of animals going in, and meat going out. While plants struggled with closures and live animal prices tanked, Bloomberg reports in mid-March put wholesale U.S. beef prices at their highest since 2015 as early pandemic buying cleared grocery shelves.


Help needed ...


Local processors join casualty list ...


Looking into 2021 ...