Results of Coronavirus Likely to Hinder Meat Supply
Beef availability issues from all across Canada continue to trickle in as the Coronavirus pandemic persists. As a result of the general public safety steps by the government, butcher plants in Canada and the US continue to be minimizing line speeds, shifts, and momentary closures in some other situations. These types of measures are caused by Covid-19 issues, and experts are saying that meat supplies are probably to end up struck hard.
Kevin Grier, a market analyst, says that Canadian slaughter activities are expected to slide by at least 5% in the second quarter of the year and that he says “is if we are lucky.” He also informed those on a webinar arranged by marketing intelligence firm J.S. Ferrero that “Production is much, much slower than normal.” The sluggish production rate creates a unexpected challenge for cattle keepers.
The persistence of Covid-19 has brought about a short-term closure of the Cargill plant at High River in Alta. The packer is one of the major meat packers on the Prairies. Several employees at other main meat plants in JBS in Brooks in Alta have tested positive to Covid-19, leading to a lot of problems in operations due to staff shortage. The plant, as of last week was operating only on a single shift, and this has dramatically diminished its daily slaughter operations.
Though, more than a few American meat packing plants that deal with Canadian animals have also stated drops in their slaughter activities, and others have momentarily stopped running as a result of the employees getting the virus as well. Tyson meat plant in Pasco, Washington, has briefly shut down whilst the JBS plant in Greeley, Colorado, was poised to open recently following its temporary shutdown from the beginning of the month.
According to Grier, beef has come to be much more costly at the counter in comparison to pork and chicken. He says that “Beef costing has become uncompetitive relative to the other two main types of meat.”
According to Statistics Canada, Canadians like to dine out more frequently when compared with dining in the home. The pandemic has altered this as more full service restaurants have underwent a forced closing as the fight to control the growth of the virus continues. The consequences of the pandemic will be felt seriously in the third quarter of this year as people focus more on paying the new years expenses during the first quarter. Grier further predicts that in the 2nd and 3rd quarters, food sales will be about 20% of what they are right now, while fast food service restaurants like McDonald’s may maintain 40% of their current sales.
Within the same webinar, an American agricultural economist, Rob Murphy, said that restricted packaging capacity had caused a disconnect between meat prices and live animal prices. He pointed out that panic buying because of Covid-19 contributed to strong margins among the packers.
Many slaughter plants in the US could be facing a slide of as much as 9% due to a drop in processing speeds and temporary closure of packing plants as a result of the Coronavirus pandemic. Murphy reports that “We think that’s going to persist, that you’re going to continue to see those types of problems that will lead to year over year declines in steer and heifer slaughter, at least for the next couple of months and maybe beyond.”
Murphy also stated that price levels for cash cattle are most likely to continue declining because the cattle providers need to move the cattle, and there is very little leverage with the packer. The feed yard placements are also most likely to fall in the upcoming months, thus bringing down inventory, and this signifies a drop in beef supply.