Market Outlook

Livestock, Dairy, and Poultry Outlook, May 2020 (summary)

COVID-19 Infects Laborforces in U.S. Meat Processing Plants, Disrupting April Production

Since early April, COVID-19 infections of animal processing plant laborforces have disrupted beef, pork, broiler, and turkey production in the United States. The figure below compares preliminary estimated federally inspected April 2020 production levels to those of a year earlier. It is notable that each meat category shows a year-over-year decline. Estimated pork production in April—2.3 billion pounds—fell more than 11 percent below a year earlier, as hog processing plants in several States reduced throughput (with some plants shutting down temporarily) due to COVID-19-related labor shortages. Estimated federally inspected beef production in April, at about 1.8 billion pounds, is almost 21 percent lower than the volume produced in April 2019. COVID-19 contagion of poultry processing plant employees caused year-over-year reductions in broiler and turkey production in April, as well. Estimated April 2020 broiler production—3.27 billion pounds—was 2 percent below production in April 2019, and turkey production fell 8.3 percent to 420 million pounds this year from a year earlier.

Pork/Hogs: Due to COVID-19-related labor disruptions in pork processing plants, 2020 pork production is reduced 1.6 billion pounds from last month’s forecast to 27.4 billion pounds, nearly 1 percent below production in 2019. The virus will likely constrain processing plant throughput to some degree into 2021, with total pork production forecast at about 28.2 billion pounds, almost 3 percent above the current 2020 forecast. Lower U.S. pork production, increases in pork prices, and declines in world economic growth are expected to temper U.S. pork export growth for the balance of 2020 to 7.15 billion pounds, 327 million pounds below last month’s forecast but 13 percent above 2019. Exports in 2021 are expected to rebound modestly to 7.3 billion pounds, about 2 percent higher than the 2020 forecast. Lower production, exports, and ending stocks imply a decline in 2020 per capita pork disappearance to 49.7 pounds, about 5 percent below 2019. For next year, disappearance is calculated at 50.8 pounds per capita, about 2 percent above the 2020 forecast. ERS composite values for 2020 and 2021 retail pork will likely average in the mid-$3.90s.

See the May LDP Outlook report and previous reports.

Last updated: Tuesday, May 19, 2020

For more information, contact: Mildred Haley