# Economists hypothesize plant closure impacts

> Agricultural economists Glynn Tonsor and Lee Schulz modeled the price effects of meat plant closures tied to COVID-19. Their beef model links a 1% cut in processing capacity to a 1.32% drop in fed cattle prices. Their hog model links a 1% cut in pork packing capacity to a 1.82% drop in hog prices.

- Date: 2020-04-13 · published 2020-04-13T12:00:00.000Z
- Category: disease · region US · magnitude medium
- Page: https://feedsoft.ai/events/53797-economists-hypothesize-plant-closure-impacts
- Commodities: [Live Cattle](https://feedsoft.ai/c/LCATTLE.md), [Lean Hogs](https://feedsoft.ai/c/HOGS.md)

## Why it matters

Packing capacity losses from COVID-19 closures could push cattle and hog prices lower because the industry has little spare slaughter capacity. Feeder buyers should watch plant utilization closely.

## Read by commodity

- HOGS: bearish ▼
- LCATTLE: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| HOGS | 2020-04-15 | 1 | -10.9% | -4.7 | Economist modeling published April 13 linked a 1% cut in pork packing capacity to a 1.82% drop in hog prices, so plant closures were framed as strongly bearish for hogs ahead of the April 15 drop. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| LCATTLE | 2020-03-27 | [Ag economists weigh in on COVID shutdown - Progressive Cattle \| Ag Proud](https://feedsoft.ai/events/7964-ag-economists-weigh-in-on-covid-shutdown-progressive-cattle-ag-proud.md) | -2.2% | -13.4% |
| LCATTLE | 2020-04-20 | [Rendering Plants Lack Capacity to Handle Mass Disposal of Euthanized Animals](https://feedsoft.ai/events/53759-rendering-plants-lack-capacity-to-handle-mass-disposal-of-euthanized-animals.md) | -6.5% | +1.0% |
| LCATTLE | 2020-03-17 | [UK ag economist says cattle markets volatile amidst COVID-19 uncertainties - The Lane Report \| Kentucky Business & Economic News - UK ag economist says cattle markets volatile amidst COVID-19 uncertainties](https://feedsoft.ai/events/11127-uk-ag-economist-says-cattle-markets-volatile-amidst-covid-19-uncertainties-the.md) | +5.7% | -0.8% |
| LCATTLE | 2019-01-15 | [Foot and mouth outbreak to impact beef exports - Moneyweb](https://feedsoft.ai/events/61044-foot-and-mouth-outbreak-to-impact-beef-exports-moneyweb.md) | +0.5% | +1.5% |
| LCATTLE | 2020-04-03 | [Cattle markets are on a coronavirus roller coaster - High Plains Journal](https://feedsoft.ai/events/7267-cattle-markets-are-on-a-coronavirus-roller-coaster-high-plains-journal.md) | -2.9% | -12.7% |
| HOGS | 2020-04-20 | [Rendering Plants Lack Capacity to Handle Mass Disposal of Euthanized Animals](https://feedsoft.ai/events/53759-rendering-plants-lack-capacity-to-handle-mass-disposal-of-euthanized-animals.md) | +24.0% | +48.0% |
| HOGS | 2021-03-29 | [Observers Watching ASF in China, Herd Size a Variable Impacting Demand for Feed and Pork \| Farm Policy News \| Illinois](https://feedsoft.ai/events/48102-observers-watching-asf-in-china-herd-size-a-variable-impacting-demand-for-feed.md) | +1.6% | +8.8% |
| HOGS | 2019-06-06 | [China boosts beef imports as killer hog virus blights pork](https://feedsoft.ai/events/58567-china-boosts-beef-imports-as-killer-hog-virus-blights-pork.md) | -1.3% | -7.3% |

## Sources

- feedstuffs.com: https://www.feedstuffs.com/market-news/economists-hypothesize-plant-closure-impacts

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.