Slaughter rates down

Slaughter rates down

David Sparks Ph.D.
David Sparks Ph.D.
Slaughter rates are returning to near normal and weekly beef and pork production are exceeding year ago levels, but it wasn’t that long ago that consumers were emptying grocery store shelves and processing facilities were closing due to labor and COVID-19 issues – leading to daily dire predictions of meat shortages in the U.S.

The self-distancing and quarantine protocols put in place to slow the spread of COVID-19 reduced economic growth, shuttered consumers in their homes and changed the way Americans purchase and consume food. Food production, too, was significantly disrupted, especially at livestock processing facilities, where labor shortages and worker protection measures slowed throughput at plants around the country and even caused some facilities to shut down. Now, just a few short months later, the story has shifted to one of potential oversupply, soft demand and a (relative) return to normal in terms of the volume of product moving through the system.

Slaughter Near Year-Ago Levels

Due to COVID-19-related labor issues, slaughter facility capacity dropped sharply in April and May. At its worst in early May, cattle slaughter dropped 35% from 2019 and hog slaughter dropped 35% from the previous year. Slaughter capacity has largely recovered to near normal levels -- more quickly than most in the industry anticipated. We are by no means out of the woods yet and face a large backlog of animals in the system that will remain with us through at least the early fall. Fed cattle slaughter has settled around 95% of full capacity, but this may be the most that the industry can accomplish given the measures put in place at facilities to combat the spread of COVID-19. Hog slaughter has returned to above 2019 levels and is mostly in line with its pre-COVID-19 trajectory. Maintaining these higher slaughter levels will be critical to working through the backlog of animals. This is particularly true of the pork complex, as previous USDA hog and pig reports indicate a larger volume of animals in the pipeline for later in the summer, meaning there may not be much room at slaughter facilities to clear additional animals that have backed up. The breeding decisions that resulted in this larger volume were made long before the impacts of COVID-19 could be imagined.

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