Significant fall in US frozen beef supplies as COVID-19 jacks up meat prices
The USDA and livestock analysts report that US inventories of frozen beef showed significant drops last month.
23 June 2020
2 minute read
Reuters reports that the fall came amid outbreaks of COVID-19 among meat plant workers. The infections slowed meat production lines and pushed up finished prices.
The decline shows that meat stocks were restricted after companies like Smithfield Foods and Tyson Foods Inc reopened slaughterhouses that had temporarily shuttered in April and May to contain the spread of coronavirus.
The USDA reported total beef supplies in cold storage on 31 May at 415.2 million pounds. This is down 13 percent from a month earlier and up 2 percent from 2019. Inventories sank by 64 million pounds from 30 April, a period in which they usually fall by 19 million pounds, according to Allendale.
Reduced meat production due to plant shutdowns and slowdowns contributed to a 40.4 percent surge in prices in May, increasing the value of supplies that processors had in freezers.
Processors and exporters slowed new purchases of meat last month because of the spike and drew down frozen inventories instead, said Altin Kalo, agricultural economist for Steiner Consulting. They will need to buy meat to replenish supplies, he said.
"Especially exporters that draw down those stocks are going to have to go back into the market and get some product bought," Kalo said.
Analysts expect production to increase as meat processors slaughter cattle that backed up on farms and in feedlots while plants were closed.
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