Beef and pork processing rebounded last week after dropping sharply, while wholesale
beef prices continued rocketing to new record highs, according to an analysis done by
John Anderson, economist for the University of Arkansas.
Cattle and hog slaughter figures turned higher last week after several weeks of falling
sharply because of multiple plant shutdowns and slowdowns due to COVID-19.
“Cattle slaughter was projected to rebound to 452,000 head this week after falling to
425,000 head the prior week,” he said. “Hog slaughter was estimated to hit 1.768 million
head last week, up from 1.533 million head the prior week.”
Anderson said the modest bounce in slaughter levels is a positive development,
suggesting at least the beginning of a move back toward normal.
“Last week’s cattle and hog slaughter numbers both remain about 28 percent below last
year’s average weekly slaughter level,” he said. “Considerable further recovery in
processing rates will be needed to alleviate major production disruptions and stabilize
markets.”
The April 30 report noted wholesale beef prices soaring to a new record level of
$272.33 per hundredweight, breaking the old record of $263.19 set back in 2015.
Choice boxed beef cutout value averaged $441.53 per hundredweight, an
unprecedented average price for wholesale beef. The Choice cutout has almost
doubled since the first week of April, Anderson said.
While major beef cuts surged, the growth in the value of beef trimmings, a major
component of ground beef, has been particularly astonishing.
For the week ending April 3, the price of fresh 50 percent lean beef trimmings averaged
$28.49 per hundredweight.
“Last week, it averaged $275.28 per hundredweight, an increase of more than 800
percent,” he said. “With production sharply lower and demand for this staple item
strong, prices have exploded.”
Dr. Anderson said a bright spot lies in the poultry sector. Chicken production seems to
be closer to the light at the end of the COVID-19 tunnel.
“Data suggests that the broiler sector, as a whole, has come closer to resuming normal
operations,” he said. "Broiler slaughter hit 162 million birds, which is 98 percent of
2019’s weekly average rate of production.”
As slaughter and processing facilities reopen, markets will stabilize and prices will
moderate, but don’t expect to find bargains in the meat section of the grocery store
anytime soon.
