Update on the Meat Industry
The USDA says it could be more than a year before the pork and beef sectors rebound.
Pork prices are beginning to recover, but are still well below 2019 numbers. Estimated production could drop about 4 percent this year. Beef production could fall 6 percent this year, but reports show that it may improve as processors work out the bottlenecks and backlogs.
Next year could see a 7 percent rebound on the beef side with 4 percent higher steer prices, but the USDA outlook board says that these numbers are still below the original 2021 expectations.
Independent hog farmers may be facing discrimination, this is according to a Republican member of the House Ag Committee. Jim Hagedorn from Minnesota wants Secretary Sonny Perdue to investigate saying that packer owned hogs are being processed at a greater rate than those from independent producers.
Between January 10 and May 8, packer hogs sold to the market increase by almost 7.5 percent, while producer hogs dropped by almost 9 percent. Hagedorn asks that the Secretary use his authority to ensure equitable processing for hogs.
As backlogs continue, processing plants are coming back online, thus slaughter volume might increase faster than expected. Hog slaughter for the last week of April was 35 below 2019 levels, but a report shows current estimate are only 7 percent lower than last year.
That shortfall could be offset further by 2 percent heavier carcass weights. However, the backlog still stands around 2.8 million hogs. For cattle, 2020 lags the previous year by roughly 25 percent. Some of the increase in slaughter volume may be coming from the foodservice sector.
Joe Sanderson, Sanderson Farms CEO, stated that the bulk food sector is operating at two thirds of normal levels, now that states have begun reopening.