April 28, 2020

Update on the Livestock & Meat Situation

Jayson Lusk, Department Head & Distinguished Professor of Agricultural Economics

James Mintert, Director, Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Boxed Beef Prices Strengthened As Meat Supplies Tightened

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01/11 02/29 04/18 06/06 07/25 09/12 10/31 12/19

$/cwt.

Week Ending

Choice Boxed Beef CutoutWeekly Average

2019 2020 5 Yr Avg

Source: USDA & LMIC Purdue Center for Commercial Agriculture

Meat prices taking off again

Source: Lusk calculations based on USDA data

COVID19’s Impact on Meat and Livestock, April 28, 2020

Wholesale Pork Values Collapsed InitiallyBut Rebounded When Packer Shutdowns Reduced Supplies

50556065707580859095

100

1/10 2/28 4/17 6/5 7/24 9/11 10/30 12/18

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Date

U.S. Pork Cutout ValueWeekly Average

2019 2020 5 Yr Avg

Source: AMS-USDA Purdue Center for Commecial Agriculture

Meat prices taking off again

Source: Lusk calculations based on USDA data

COVID19’s Impact on Meat and Livestock, April 28, 2020

Meat packing is vulnerable to worker illnesses

15 pork plants slaughtered 59% of all hogs

COVID19’s Impact on Meat and Livestock, April 28, 2020

COMMERCIAL HOG SLAUGHTER 2019(1000 Head)

Other States 23168 U.S. Total 129913

Livestock Marketing Information CenterData Source: USDA-NASS

DE-MD 18

New England 34

State ShareIA = 30%IL = 10%MN = 9%NC = 7%MO = 7%IN = 7%NE = 6%SD = 4%

COVID19’s Impact on Meat and Livestock, April 28, 2020

COMMERCIAL CATTLE SLAUGHTER 2019(1000 Head)

Livestock Marketing Information CenterData Source: USDA-NASS

DE-MD 38

New England 28

Other States 2884 U.S. Total 33555

COVID19’s Impact on Meat and Livestock, April 28, 2020

Weekly Hog Processing Volume Has Declined 26% Since Early March

1.7

1.9

2.1

2.3

2.5

2.7

2.9

01/11 02/29 04/18 06/06 07/25 09/12 10/31 12/19

Million Head

Week Ending

Federally Inspected Hog SlaughterWeekly .

201920205 Yr Avg

Source: USDA & LMIC Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

375400425450475500525550575600625

1/11 2/29 4/18 6/6 7/25 9/12 10/31 12/19

Million Pounds

Week Ending

Federally Inspected Pork ProductionWeekly

201920205 Yr Avg

Source: USDA & LMIC Purdue Center for Commercial Agriculture

Weekly Pork Production Has Declined 26% Since Early March

COVID19’s Impact on Meat and Livestock, April 28, 2020

Daily hog processing down almost 50% yesterday

COVID19’s Impact on Meat and Livestock, April 28, 2020

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01/11 02/29 04/18 06/06 07/25 09/12 10/31 12/19

Million Pounds

Week Ending

Federally Inspected Beef ProductionWeekly

201920205 Yr Avg

Source: USDA & LMIC COVID19’s Impact on Meat and Livestock, April 27, 2020Purdue Center for Commercial Agriculture

Weekly Beef Production Has Declined 32% Since Last Week of March

COVID19’s Impact on Meat and Livestock, April 28, 2020

Daily cattle processing down almost 50% yesterday

COVID19’s Impact on Meat and Livestock, April 28, 2020

Chicken Production Down 12% Since Early March

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1/11 2/29 4/18 6/6 7/25 9/12 10/31 12/19

Billion Lbs

Week Ending

Federally Inspected Young Chicken ProductionWeekly

201920205 Yr Avg

Source: USDA & LMIC Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Cold Storage May Help Buffer the Supply Shock

COVID19’s Impact on Meat and Livestock, April 28, 2020

Cold Storage May Help Buffer the Supply Shock

COVID19’s Impact on Meat and Livestock, April 28, 2020

Hog Prices Down Nearly 40% Since Mid-March

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JAN APR JUL OCT

$ Per Cwt.

BARROW AND GILT PRICESIowa – So. Minnesota, Carcass Base Price, Weekly

Avg. 2014-18 2019 2020

Data Source: USDA-AMS & LMIC

COVID19’s Impact on Meat and Livestock, April 28, 2020

Baby Pig Prices Down Sharply Based Upon

Weak Market Hog Price Expectations for Late 2019

Data Source: USDA-AMS, Livestock Marketing Information Center

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JAN APR JUL OCT

$ Per Head

EARLY WEANED PIG PRICESNational, 10-12 Lbs, Delivered, Weekly

Avg. 2014-18 2019 2020

COVID19’s Impact on Meat and Livestock, April 28, 2020

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01/11 02/29 04/18 06/06 07/25 09/12 10/31 12/19

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Week Ending

Kansas Direct Slaughter Steer PricesWeekly Average Cash Prices

2019 5 Yr Avg 2020

Source: AMS-USDA, Dodge City, KS Purdue Center for Commercial Agriculture

Fed Steer Prices Have Fallen 17% Since Last Week of March

COVID19’s Impact on Meat and Livestock, April 28, 2020

Feeder Cattle Prices Have Rebounded From Their LowsBut Are Still 10% Lower than in Early March

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01/11 02/22 04/04 05/16 06/27 08/08 09/19 10/31 12/12

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Week

Kentucky 700-800 Lb. Feeder Steer PricesWeekly Average Cash Prices

2019 2020 5 Yr Avg

Source: AMS-USDA, Frankfort, KY & LMIC Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Responding to Declining Prices & Concern About Future DemandCattle Feeders Reduced Placements of Cattle On Feed in Late February & March

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1.20

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Million Head

Month

U.S. Net Placements of Cattle On Feed Lots Over 1,000 Head

2020 2019 5 Yr. Avg.

Source: USDA Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Cattle Feeders Pulled Marketings of Fed CattleAhead in Late February and March

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2.0

2.1

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Million Head

Month

U.S. Fed Cattle MarketingsLots Over 1000 Head

2020 2019 5 Yr. Avg.

Source: USDA Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Result: Cattle On Feed Inventory 6% Below A Year Ago

10.0010.2510.5010.7511.0011.2511.5011.7512.0012.25

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Million Head

Month

U.S. Cattle On Feed Lots Over 1000 Head

2020 2019 5 Yr. Avg.

Source: USDA, Cattle on Feed Purdue Center for Commercial Agriculture

COVID19’s Impact on Meat and Livestock, April 28, 2020

Seasonal Strengthening of Choice-Select Spread Still On Track

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11-Jan-20 29-Feb-20 18-Apr-20 6-Jun-20 25-Jul-20 12-Sep-20 31-Oct-20 19-Dec-20

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Week Ending

Choice-Select Boxed Beef CutoutWeekly Average

20192020

5 Yr Avg

Source: USDA & LMIC Purdue Center for Commercial Agriculture

April 28, 2020

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