While the COVID-19 pandemic hit the beef industry hard and fast this spring, several measures show the industry is turning a corner.
Since July, steer and heifer slaughter has averaged 0.5% above year ago levels, says Derrell Peel, Oklahoma State University Extension livestock market economist. In addition, total fed beef production from steers and heifers is up 3.7%, year over year, from July through the end of October.
“Beef demand, however, continues to be challenged with restricted food service,” Peel says. “Restaurants have recovered somewhat from the initial lockdown with more emphasis on takeout and delivery.”
Meanwhile, retail grocery demand remains robust.
“The shift from summer beef demand to winter raises concerns,” Peel says. “Food service is typically more emphasized in winter months, which may be an additional challenge. The pandemic is resurging and additional restrictions on food service are a growing risk.”
Carcass Weights Moderate
The COVID-19-induced backlog of cattle is starting to disappear. A key signal is the carcass weights published each Thursday by USDA.
For the week ending Oct. 31, the data shows an average steer carcass weight of 926 lb., down 5 lb. from the previous week, yet still 23 lb. heavier (+2.5%) than last year.
Average heifer carcass weights were 848 lb., 1 lb. heavier than the previous week and 13 lb. (+1.6%) heavier than last year.
Market analysts also believe carcass weights trended lower during the first few weeks of November.
Cattle Backlog Loosens
Over the past three years “the peak in fed cattle weights has happened in mid-November and it appears we may be at that point again this year,” says Len Steiner, Steiner Consulting Group.
Cattle were backlogged both in feedyards and outside of feedyards during the COVID-19 disruptions, and analysts believe the end of the backlog should be marketed by the first half of 2021. If that happens, fed cattle supplies will begin to reflect the reality of two years of declining calf crops.
