|
Slaughter Rate And Meat Production
DR. ANDREW P. GRIFFITH
KNOXVILLE, TENN.
Many people would say they are living in a unique time or living in unique circumstances. There is no way to disagree with that statement, but all time and circumstances tend to be unique. The same can be said about livestock markets and the meat supply chain. Livestock and meat markets are complicated from start to finish, and they have only become more complicated and harder to predict with the coronavirus pandemic. This provides a person in this business more reason to look closely at some of the finer aspects of the system.
From a meat and livestock perspective, the biggest issue with coronavirus was the slowdown in livestock slaughter and meat production. The supply chain can be thought of like an hour glass. Taking beef cattle as an example, the supply chain begins with many cow-calf operations which then send calves into stocker and backgrounding operations and finally to feedlots. There are more cow-calf operations than stocker and backgrounding operations and there are even fewer feedlots. The supply chain then funnels into the bottleneck which is the slaughter and packing industry. Meat then makes its way to the other end of the hour glass which is the many retail and food service customers who purchase beef and then market it to millions of consumers.
Prior to coronavirus and in very general terms, one could say 50 percent of meals were eaten away from home and the other 50 percent were eaten at home. Thus, meat was being processed and packaged and then half of it was going to restaurants and food service while the other half was making its way to a retail outlet. Almost instantaneously, the food service industry appeared to shut down as stay at home orders and social distancing became the newest terminology used in every day language. This meant a shift by consumers to purchasing most meat via the local grocery store. It did not take long for shelves to be wiped clean of most meat items. This situation showed the weaknesses or flaws in a very specialized meat supply chain and the inability to adapt overnight.
One has to think about the situation in which meat packers sit. Meat packers are working with farmers to purchase a single raw product (i.e. cattle, hogs, lambs), processing and packaging that one product into hundreds of products, and then merchandising those products to thousands of retailers, restaurants, and food service customers. At the same time, those packing houses employ thousands of people who are subject to the same environmental risks that most other consumers are exposed to.
Given the aforementioned information, beef cattle slaughter experienced a precipitous decline in April and May compared to 2019. Cattle slaughter for that two month period was down 20.0 percent compared to last year with only 4.6 million head of cattle being slaughtered during those two months in 2020 compared to nearly 5.8 million head during the same period in 2019. One silver lining to this situation is that cattle slaughter the first three months of 2020 was up 4.6 percent compare to 2019 which amounts to nearly 363,000 head more than the same three months in 2019. Thus, through five months, cattle slaughter is only running about 5.8 percent behind year ago levels.
The slowest slaughter week which occurred the last week of April and early May saw a decline of 34.8 percent compared to the same week in 2019. Alternatively, beef cattle slaughter the last week of May was only 10.9 percent lower than the same week in 2019. This means slaughter facilities are gaining steam attempting to increase chain speeds to work through the backlog of cattle.
Similar to the slaughter rate, beef production in April and May declined 18.1 percent (834 million pounds) compared to the same two months in 2019. However, beef production the first three month of 2020 was up 6.9 percent (438 million pounds) compared to the same time period in 2019. Thus, total beef production from January through May was only down 3.6 percent (397 million pounds) compared to the same months in 2019. The industry has a long way to go to catch up, but plenty of meat will be available at the meat counter. ∆
DR. ANDREW P. GRIFFITH: Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee
|
|