US total red meat production is back above last year but probably not enough to make up for what was lost to COVID-19 packing plant closures, a market analyst said.
WEEKLY TOTAL RED MEAT PRODUCTION UP
Weekly federally inspected red meat production last week was pegged by the USDA at 1.098 billion pounds, up 32 million, or 3.00%, from 1.066 billion a year ago and up 118.64 million, or 12.1%, from the 2014-2018 average of 979.36 million.
The first week of April, weekly federally inspected red meat production was 1.074 billion pounds, up 38 million, or 3.67%, from 1.036 billion a year earlier and up 143.04 million, or 15.4%, from the previous five-year average of 930.96 million.
The following week, red meat production was pegged at 948 million pounds, down 83 million, or 8.05%, from 1.031 billion a year earlier and down 8.62 million, or 0.92%, from the 2014-2018 average of 939.38 million.
PRODUCTION FLUCTUATION
Weekly red meat production this year bottomed four weeks later at 788.5 million pounds, the second week of May. This was 248.5 million, or 24.0%, less than the 2019 total for the same week of 1.037 billion pounds and 164.62 million, or 17.3%, less than the previous five-year average for the week of 953.12 million.
Following President Trump’s order to designate packing plants as essential, red meat production came back above last year and the average just four weeks later.
The average difference between this year’s weekly red meat production through the first week of April was 68.779 million pounds. The average difference between weekly 2020 meat production from the second week of April through the first week of June when it again rose above a year earlier was a minus 161.225 million pounds.
That left a weekly average of 92.446 million pounds a week that should have been produced if weekly averages had been maintained throughout.
IS LOST PRODUCTION LOST?
Given the level of organization within the beef and pork industries, most of the lost production will come down the line sometime, the analyst said. But some of it won’t.
Anecdotal reports indicated many hogs may have been euthanized because there was no room for them at the packing plants that remained open at the height of the lockdowns.
That didn’t happen in the cattle industry, according to reports. Fat cattle just got fatter awaiting their meeting with destiny. Other cattle had rations altered to slow growth and fattening rates, and feedlots placed fewer cattle on feed.
The backlog in fat cattle may be nearing an end, but there are many feeder cattle out there that would have gone on feed sooner, had there been space for them, market analysts said. These cattle are being placed at heavier weights which will mean heavier cattle going to slaughter.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains this week at $105 to $106 per cwt on a live basis, steady to down $1 from last week, and at $167 dressed, down $1 to $5.
The USDA choice cutout Thursday was up $0.09 per cwt at $231.54, while select was up $0.15 at $214.26. The choice/select spread narrowed to $17.28 from $17.34 with 58 loads of fabricated product sold into the spot market.
No steer or heifer contracts were tendered for delivery Thursday against the Aug live cattle futures contract.
The CME Feeder Cattle Index for the seven days ended Wednesday was at $143.02 per cwt, down $0.58. This compares with Thursday’s Aug contract settlement of $141.97 per cwt, down $0.50 and the Sep contract settlement of $141.22 per cwt, down $0.55.