As processing plants reopen, more meat for Americans to eat

The faster-than-expected recovery in slaughter production has almost neutralized the impact of the coronavirus pandemic on the U.S. meat supply, said the government on Thursday. The USDA estimated that Americans will consume an average of 220.2 pounds of red meat and poultry this year — more than half a pound a day apiece.

At 220.2 pounds, per capita meat consumption would be down 1% from last year, which would end five years of gradual increases that were part of the recovery from the Great Recession. But it would be 7.2 pounds more per person than the USDA estimated a month ago, reflecting meat production that would be 1.4 billion pounds greater than forecast in May.

Beef would account for two-thirds of the increase. Pork and broiler chicken production would be up as well.

"The increase in beef and pork production largely reflects a faster-than-anticipated recovery in the pace of slaughter," said USDA analysts in the monthly WASDE report. Hatchery data "points toward larger expected [broiler] production in the second half of the year," the report also said.

Weekly cattle and hog slaughter plummeted by as much as 40% during April, then regained momentum in May. The USDA said this week that red meat and poultry production was running at 95% or more of its year-ago level.

Beef prices soared 10.8% in May and were a driving factor in a food inflation rate of 4%, said the Bureau of Labor Statistics on Wednesday. The U.S. inflation rate overall was a tiny 0.1%, notwithstanding two months of rapid rises in food prices. Usually, food prices track the overall inflation rate.

Also in WASDE, USDA analysts lowered their estimate of U.S. soybean exports for the third month in a row, to 1.65 billion bushels, "on increased competition from South America," during the marketing year that ends on August 31. They expect a rebound in the new trade year, to 2.05 billion bushels, the level seen before the trade war with China.

"Corn used for ethanol is lowered, reflecting a slower-than-expected rebound in ethanol production" this year, said the USDA. Ethanol production fell to record lows in late winter and spring, when stay-at-home orders slashed gasoline consumption.

The USDA said this year's corn and soybean crops will fetch the lowest price at the farm gate in 14 years. Corn production is forecast at a record 16 billion bushels, and the soybean crop, at 4.125 billion bushels, would be the fourth largest ever.

The WASDE report is available here.