The ongoing coronavirus (COVID-19) pandemic has significantly impacted the U.S. beef market. Slaughterhouse and restaurant closures, worker sickness, and falling meat prices are all contributors.
According to Worldometer, there are more than 2.5 million coronavirus cases worldwide and over 171,000 deaths. But while the immediate impact of the coronavirus is the primary concern for many people, the broader economic impact is also significant.
At the start of 2020, the U.S. and China signed a phase one economic and trade agreement. This agreement was to be implemented this month. Instead, the spread of coronavirus has disrupted the meat industry both in the U.S. and around the world.
As the virus continues to spread, the U.S. pork industry faces $5 billion in losses for the rest of the year. According to the National Pork Producers Council (NPPC), closing restaurants and lost international buyers are key contributors to falling meat prices.
According to the U.S. Department of Agriculture (USDA), eating out accounts for 54 percent of total food expenditures. While eating at home accounts for around 46 percent of spending. Between February and March, live cattle futures markets fell by 20 percent to 23 percent.
The collapse of the cattle futures markets—agreements for the future sale and purchase of beef—caused a 10 percent decrease in live cattle prices, per Food Business News.
They fell from an average of $119.71 per 100lbs (CWT) in February to $108.84 per CWT in March. In January, analysts expected an average of $116 to $117 per CWT in 2020. Now, average prices may be closer to $105 to $110 per CWT.
Some analysts predicted further coronavirus disruption to the U.S. meat industry due to processing plant closures. In March, Tyson Foods—the second-largest chicken, beef, and pork processor in the world—experienced a 30 percent drop in its stock price.
At the time, the company also warned its investors that the coronavirus could further disrupt its operations. Earlier this month, Tyson Foods closed its Columbus Junction pork processing plant. One-hundred and forty-eight slaughterhouse workers caught the coronavirus and two died.
Various meat companies including producers Smithfield Foods, Cargill, National Beef Packing Co, Empire Kosher Poultry Inc., and JBS—the largest meat producing company in the world—have also slowed production or closed meat processing facilities due to the spreading virus.