Coronavirus could pare meat consumption by 10 pounds per American
The coronavirus, which has shut down meat plants and put millions of people out of work, will reduce American meat consumption by 4%, or 10 pounds per person, this year, said the government on Tuesday in a new assessment of the impact of the pandemic on food and agriculture. Beef, pork, and poultry production is falling “as the sector adjusts to COVID-19 and economic uncertainty,” said the USDA.
The USDA also said soybean exports and corn-for-ethanol use this year would be the smallest since 2012/2013, also due to the pandemic. Looking ahead to this year’s harvests, it forecast a slightly smaller-than-average wheat crop of 1.87 billion bushels. The U.S. could see its first 16-billion-bushel corn crop, leading to the largest corn stockpile in nearly four decades and the lowest corn price in 14 years.
Per-capita meat consumption will fall to 217.1 pounds per person this year, ending a five-year rise in consumption, said the USDA. Before the coronavirus, it forecast meat consumption this year would be a record 227.4 pounds per person. It was 224.3 pounds in 2019.
“The 2020 projections changed a lot this month, with sharp reductions in production for all of the meat types,” said Patrick Westhoff, head of the FAPRI think tank at the University of Missouri. “I assume that reflects, at least in part, the closures and slowdowns at meatpacking plants.” The USDA reduced its forecast of red meat and poultry by 4.8 billion pounds from its April estimate.
Meat production plunged during April as coronavirus outbreaks forced plants to slow or stop operations. President Trump signed an executive order in late April for plants to operate despite the pandemic. Agriculture Secretary Sonny Perdue says he expects most plants to be in operation by the end of this week.
According to data collected by FERN, at least 52 meat plant workers have died and more than 13,000 employees have tested positive for COVID-19. And as of Tuesday at midday, three meatpacking and six processing plants were closed.
“Beef production is reduced as lower expected cattle slaughter more than offsets heavier carcass weights,” said the USDA in its monthly WASDE Report. “Pork production is forecast lower on a slower expected pace of slaughter. However, heavier hog carcass weights are expected to partially offset lower production. Broiler and turkey production are lowered from last month as producers respond to weaker demand and adjustments to the pace of slaughter due to COVID-19.”
Ethanol demand has plummeted in tandem with gasoline usage as stay-at-home orders have kept traffic off of highways. The USDA cut an additional 100 million bushels from its estimate of corn-for-ethanol for the marketing year that ends on August 31, to 4.95 billion bushels, lowest in seven years. It forecast corn-for-ethanol at 5.2 billion bushels in 2020/2021, “based on expectations of a rebound in U.S motor gasoline consumption.” Corn-for-ethanol averaged 5.47 billion bushels annually in the three years before the coronavirus.
“Corn is facing a really difficult time,” said Zippy Duvall, president of the American Farm Bureau Federation.
Based on its survey of growers in March, the USDA projected a corn crop of 16 billion bushels, the largest ever, and soybean crop of 4.125 billion bushels, the fourth largest on record. Some 3.32 billion bushels of corn will be on hand when the 2021 harvest begins, an increase of 1.22 billion bushels of 58% from the stockpile forecast for this September 1. The 2020 crop would sell for an average $3.20 a bushel, the lowest farmgate price in 14 years, which would boost corn usage by 1 billion bushels, but not enough to prevent the build up in stocks, said the USDA.
Nearly half of the U.S. soybean crop is exported in most years but exports will dip to 1.675 billion bushels this year, the smallest amount since 2012/2013, but they will rebound to 2.050 billion bushels from this year’s crop, said the USDA. That would be equal to exports before the Sino-U.S. trade war.
“With higher global soybean import demand for 2020/2021 led by expected gains for China, U.S. export share is expected to rise to 34% from the 2019/2020 record low of 30%,” said USDA analysts.
The WASDE Report is available here.