A report published by US private credit provider CoBank on meat supply during the coronavirus suggested that the bottleneck in the food chain could reduce supply to stores by nearly 30% by the end of May as well as increase prices by up to 20%.
It believes that US hog producers may be forced to euthanise up to seven million pigs in the second quarter of 2020, leading to losses of $700m, further reducing supplies. Also highlighted was that industry associations predict 2020 losses at $13.6bn for US cattle producers (NCBA) and nearly $5bn for US hog producers (NPPC).
The report’s author and lead economist at CoBank Will Sawyer said: “For consumers, closed meat plants mean they will find less meat in the grocery store in the weeks ahead. US consumers have been able to rely on grocery stores this spring as many restaurants across the country have closed in response to ‘stay-at-home’ orders in many cities and states. As communities reopen with only about one week of meat supply in cold storage, shortages and stock outs in the meat case couldn’t come at a worse time.
“Pork and beef production is now approximately 35% below this time last year, making retail shortages and price inflation nearly assured,” he added. “Prior to the plant shutdowns in April, beef and pork supplies were well above 2019 levels which provided consumers with ample supplies as restaurants around the country closed. But the declining meat production this April will likely lead to reduced grocery store supplies in May and June.
“Grocery stores are likely already rationing their current meat supplies and will likely draw on meat supplies in cold storage over the next month. The supply chain and inventory from the meat plant to local grocery store meat cases is less than a few weeks.”