Beef Processing Recovery
Shortly after the pandemic hit the U.S., we started hearing reports of meat processors having to reduce capacity. This created a backlog of livestock, sending cattle prices lower while beef prices to the consumer went up. American Farm Bureau Economist Michael Nepveux says although the processing rebounded quickly, the backlog hasn’t yet caught up.
Nepveux… “We hear people talk about a V-shaped recovery with the economy. Now, I don't necessarily know if I believe that to be true. There was a V-shaped recovery with a processing capacity. So hog and cattle slaughtered did recover a lot more quickly than most people were anticipating. So, we're operating with cattle 95ish percent of where we were a year ago, capacity wise. Hog slaughter, we're actually for the most part above where we were a year ago. So they've mostly been able to recover and then have spent the summer working through that backlog. So, we're still waiting on this Friday's Cattle on Feed Report to really try and get a better estimate of how many animals are still backed up. But, you know, a lot of people think that we're past it. But we're at the tail end of it. Let me put it that way.”
Nepveux is optimistic about about catching up on processing backlogged livestock, but is concerned about what an extended recession might to to prices going forward.