The U.S. is on track for record production of beef, pork and broilers in 2020. Before COVID-19, it was recognized that meat trade would be critical for markets in 2020 and that certainly remains true at this point.

Last Friday, the USDA released the July Cattle on Feed report. Feedlot placements in June were 1.8 million head, 102.1% of last year. June marketings were 1.97 million head, up 1.3% year over year.

Barring a major setback, it appears that beef markets are moving past the worst of the disruptions that have caused upheaval is recent weeks.

A large area of low-level drought is building in the West from western Kansas to northern California and the Pacific Northwest. Some of the worst drought areas are in Colorado and surrounding regions and in Oregon.

COVID-19 began impacting workers at beef packing plants in early April. In the last five weeks, cattle slaughter decreased by an average of 27%. This compares to the previous five weeks in March, when cattle slaughter averaged 5.5% higher than year-ago levels.

COVID-19 continues to sweep through packing plant workers, leading to severe disruptions in beef processing. Estimated cattle slaughter for the week ending May 2 was 425,000 head, down 38% year over year.

The U.S. meat industry faces unprecedented threats as COVID-19 sweeps through labor forces at meat processing facilities nationwide.

Economists often say that market prices are determined by demand and supply. What they really mean is more correctly stated as “market prices are determined by expectations of demand and supply.” Under more stable and normal circumstances, this distinction is not particularly significant.

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.

Wholesale beef prices typically increase seasonally from February into March but have showed only scant improvement from the February low three weeks ago.