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Purdue economist Jayson Lusk reports beef processing running 35-40% below last year's capacity due to COVID-19 shutdowns. Wholesale beef prices are up 67% since January while live cattle prices are down 24%.
Plant closures cut packer demand for fed cattle, pushing live cattle prices down, while reduced meat supply bids up boxed beef. Feeder buyers face a wide cattle-to-beef price spread.
wlj.netJayson Lusk, Agricultural Economics Department head, Purdue UniversityMay 15, 2020After 70 past bearish disease events, Live Cattle moved a median +0.0% over 5 sessions (51% higher; middle half -1.7% to +1.0%), and +0.4% over 20.
After 46 past bearish disease events, Feeder Cattle moved a median +0.3% over 5 sessions (54% higher; middle half -2.3% to +1.6%), and +1.8% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Packing capacity running 35-40% below last year while wholesale beef rose and live cattle fell shows a wide margin that gave futures room to rebound as plants reopened.
