Below is a brief excerpt from complimentary research note written by our Consumer Staples analysts Howard Penney and Daniel Biolsi. If you are an institutional investor interested in accessing our research email firstname.lastname@example.org
Shutdowns of processing plants have significantly impacted beef production due to COVID-19 infections among employees.
Beef production fell 24.7% month over month in April and 19.7% YoY, as seen in the following chart below. Beef production in April was the lowest monthly total since Feb. 2015. The last week of April was the lowest week with slaughter down 34.8% YoY.
Production has improved since then with slaughter in the last week of May down 10.9% YoY.
Due to the increased weight of cattle waiting for slaughter, production is estimated to be down 7.6% in the most recent week. Prices have also followed the swings in production in reverse. After averaging under $210 per hundredweight early in the year, choice boxed beef prices increased in late March.
Prices peaked at $459 per hundredweight in mid-May before dropping to a weekly level of $374 per hundredweight at the end of May. The swings for pork were similar in trend with April production falling 20.9% MoM.
Poultry was different than the red meat production, with April production down only 7.1% MoM.
Last week Sanderson Farms said egg sets, chick placement, and hatch rates are significantly lower. Sanderson Farms revised its production target for 2020 down by 3.7%. Chicken prices are currently mixed with the ARA cutout index up 17% YoY with boneless breasts up 22.9% while jumbo wings are down 10.7%.