Much of 2020 has been preoccupied with daily and weekly slaughter numbers, carcass weights and boxed beef prices, along with monthly cattle-on-feed dynamics. The intertemporal volatility through the year adds to the challenge of assessing what, exactly, is the situation regarding the cattle cycle and longer-term herd dynamics.

Despite the challenges facing the industry at the beginning of the third quarter, the beef industry has processed more fed cattle in third-quarter 2020 than the previous year.

Packers continue to make gains on processing of fed cattle post-COVID-19 plant disruptions in the second quarter.

Packers continue to make gains on the processing of fed cattle. Based on USDA Agricultural Marketing Service (AMS) data for actual and estimated slaughter of steers and heifers in August, the pace of fed cattle slaughtered appears to have risen above year-ago levels for the first time since March (see Figure 1).

In July, the USDA National Agricultural Statistics Service (NASS) released the mid-year Cattle report, which provided a snapshot of U.S. cattle inventory as well as a glimpse into cow-calf producers’ intentions for retaining heifers.

The percentage of steer and heifer carcasses grading Prime so far during 2020 has outpaced normal levels. The average percent Prime for the first seven months of 2020 was 10.6%, which is the highest January-July average on record and about 2% higher than during the first seven months of 2019.

Meatpacking facilities have continued to recover weekday slaughter capacity and have used Saturday as an opportunity to improve overall weekly slaughter totals.

Cattle supplies and movement through the supply chain have been headline topics in 2020. Disruptions caused many changes that impacted producer decisions. It is also important to occasionally take a longer-term view at cattle supplies. Recent reports released provide the most current update on the state of cattle supplies. 

The USDA recently released a preliminary report of their findings from the investigation into price spread in the cattle markets.

Over the past two months at the time of this writing, U.S. beef packers had to implement new health protocols for dealing with COVID-19 that might have hindered their ability to process cattle.