Following supply chain disruptions and plant closures the U.S. beef and hog sector is on the road to recovery.
According to USDA Outlook Board Chairman Mark Jekanowski, after the plant closures and shutdowns in the spring, he says, slaughter capacity now is just up to about pre-COVID levels.
“There is still however a backlog of cattle that would have been slaughtered in March or April,” Jekanowski notes. “That continues to hand over the market today, although the industry has been working through that backlog.”
However, the damage is done. This year’s beef production projected to be down half a percent than last year. The first they have declined in nearly 5 years. For 2021, we could see a 2 percent bounce back but it is still hard to predict what is going to happen in the beef market; too much uncertainty about demand. “We’re in a lot better place now than we were a few months ago,” Jekanowski states.
Steer prices crawling back up, they could average about $107 dollars per hundredweight this year.
The pork industry is still feeling the effects of the slowdowns and pork process back in April and May, which has created heavier weights and a build up of slaughter ready animals. So, that is actually putting pressure on prices so much so that for this year’s average hog price projections, “we actually pulled back our price estimates a bit down to $38.12 per hundred weight.” That number last year was $48 dollars.
Jekanowski adds, “Recovery’s going to be slow and next year we’re anticipating or forecasting an average price of about $44.25 per hundred weight on hogs.”