Per-capita third-quarter US beef consumption reached 15.6 pounds, an amount not seen since 2009, as production rose to make up for lost time as the pandemic surged in April and May, said the USDA’s monthly Livestock, Dairy and Poultry Outlook report.
However, per-capita disappearance was expected to recede through the rest of 2020 and through 2021 as production contracts, exports grow with global beef demand and imports fall on lower domestic buying and fewer available global supplies, the report said.
MAJOR COMPONENTS OF DISAPPEARANCE
Major components influencing that forecast are beef production, imports and exports, the USDA said.
The second and third quarters generally are the periods of greatest US beef consumption as cattle that had been overwintered in feedlots are marketed for slaughter, the report said. However, for the first time, domestic consumption dropped from the first to the second quarter this year, from 14.7 to 13.6 pounds per person, on dramatically lower second-quarter production.
In the third-quarter, production climbed to record levels for the quarter, and a combination of firm ground beef demand, large supplies of fat-trim from fed cattle and a reduction in cow slaughter supported higher beef imports, the USDA said. Concurrently, exports were below year-earlier, partly because of global economic weakness.
As a result, per-capita beef consumption reached that 15.6 pounds.
RECORD H2 BEEF PRODUCTION
Despite the challenges facing the industry at the beginning of the third quarter, beef packers processed more fed cattle in third-quarter 2020 than last year, the USDA said. As a result, the industry appears to have worked through the backlog of cattle that resulted from the plant disruptions in the second quarter.
The combination of delayed cattle marketings and good feeding conditions this year raised average cattle carcass weights nearly 3% for the third quarter, also increasing third-quarter production nearly 3% year over year.
As a result, beef production set a third-quarter record at 7.1 billion pounds, the report said.
In October, packers pushed the slaughter pace higher than last year, the USDA said. Based on Agricultural Marketing Service data for actual and estimated federally inspected cattle slaughter, the pace on a daily basis in October climbed to 3% more than year-ago levels, led by steer and heifer slaughter that was up more than 4%.
Because of this faster-than-expected pace of slaughter, the number of fed cattle expected to be slaughtered in the fourth quarter was raised, as was cow slaughter, raising fourth-quarter production to a record 7.1 billion pounds, the USDA said. These factors increased the 2020 beef production forecast by 85 million pounds from last month to 27.2 billion pounds, which pushed it to just above 2019.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains this week at $110 to $112 per cwt on a live basis, steady to up $1 from last week. Dressed-basis trading was reported at $172 to $174 per cwt, steady to up $2.
The USDA choice cutout Thursday was down $1.70 per cwt at $239.19, while select was off $3.02 at $219.93. The choice/select spread widened to $19.26 from $17.94 with 146 loads of fabricated product and 42 loads of trimmings and grinds sold into the spot market.
The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.09 a bushel over the Dec CBOT futures contract, which settled at $4.22 1/2 a bushel, up $0.03 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $139.44 per cwt, down $0.43. This compares with Thursday’s Jan contract settlement of $139.80 per cwt, down $2.00.