Nationwide response to the COVID-19 pandemic continued to shake segments of the entire beef industry near the conclusion of a historic March 2020. Consumers continued to purchase food commodities off grocery shelves, while ag economists, like their counterparts on national economics, all began preparing for the reality of a recession.

The USDA National Agricultural Statistics Service (NASS) released its semiannual Cattle report on Jan. 31. The total number of cattle and calves on Jan. 1, 2020, was estimated at 94.4 million head, nearly 400,000 head lower than the previous year.

Why did April 2020 live cattle futures lose $10.675 per hundredweight (cwt) from Friday, Feb. 21 to Friday, Feb. 28? Why did it recover $3.70 per cwt over the next three trading days?

The cattle and beef industry, along with the rest of the U.S. and global economy, is in uncharted waters with the coronavirus pandemic. There are many unknowns about the timing, severity and aftermath of the disease.

Beef exports posted more modest growth in January, increasing 2.5% from a year ago in volume (107,374 metric tons [MT]) and 5% in value ($672.7 million). But beef muscle cut exports were the highest ever for the month of January at 81,342 MT, up 4% from a year ago, while muscle cut value increased 5% to $589.2 million.

The 2019 fourth-quarter beef production forecast was adjusted higher by 15 million pounds from the previous month to 7 billion pounds, which raised the forecast for annual production to 27.2 billion pounds. The increase was based on a faster-than-expected pace of non-fed cattle slaughter in December, in particular beef cow slaughter.

The U.S. beef herd size periodically cycles through expansion and contraction, with about a 10-year cycle. This cycle is largely due to the time it takes to build because of cattle biology. 

December beef exports totaled 111,315 metric tons (MT), down 1% from a year ago, valued at $682 million (down 3%). 2019 exports totaled 1.32 million MT, 2.5% below the previous year's record volume. After increasing by more than $1 billion in 2018, beef export value eased by 3% to $8.1 billion.

The USDA NASS Cattle on Feed report for January was released Jan. 24. My take on the report is that it was reasonably neutral. Placements, marketings and on-feed numbers were all well within pre-report estimate ranges and were, in fact, very close to pre-report averages.

President Donald Trump signed the U.S.-Mexico-Canada Agreement (USMCA) into law at a ceremony at the White House last week. USMCA still needs to be ratified by Canada’s parliament before it can take effect, but after more than a year of negotiations between the Trump administration and key Democrats in Congress, the trade agreement finally has full U.S. approval.