Panic-Buying Causes Surge In Cattle Marketing, But Feedlot Placements Drop
FAYETTEVILLE, ARK.
COVID-19-fueled panic buying prompted a sharp rise in fed cattle marketing, but feedlot placements have slowed in parallel to meat processing, according to an economic impact report from the University of Arkansas System Division of Agriculture.
John Anderson, head of the agricultural economics and agribusiness department for the Division of Agriculture and the Dale Bumpers College of Agriculture, Food and Life Sciences, provided an analysis based on the U.S. Department of Agriculture’s “Cattle on Feed” report.
In March, fed cattle marketing was “13 percent higher than the prior year,” he said. “This was the second-highest marketing figure for March since this Cattle on Feed series began in 1996.”
Anderson said the quick pace of marketing noted in the report “confirms the fact that meat packers in March were operating at a very high capacity in an effort to match the surge in demand caused by panic buying.”
While the number of cattle marketed from feedlots increased, the number of cattle being placed into feedlots for finishing fell sharply. As a result, the number of cattle in feedlots as of April 1 dropped slightly more than 5 percent from the prior year.
“The decline in feedlot inventories is strongly counter-seasonal,” he said. “Typically, on-feed inventories rise from March to April as feeder cattle come out of winter grazing.”
Anderson said he expects the number of cattle being marketed “will be much lower as a result of plant closings and slowdowns in response to COVID-19.”
He noted that cattle processed for meat the week of April 21 dropped 25 percent from the previous year’s level.
“With such a dramatic reduction in throughput, inventories of market-ready cattle will rapidly increase,” he said. “This will intensify negative pressure on cattle prices at all levels.”
The report, as well as others on the economic impact of COVID-19 on Arkansas agriculture and rural communities, can be found at
https://bit.ly/AR-Ag-Eco-Impacts2020. ∆
COVID-19-fueled panic buying prompted a sharp rise in fed cattle marketing, but feedlot placements have slowed in parallel to meat
processing, according to an economic impact report from the University of Arkansas System Division of Agriculture.
Division of Agriculture graphic