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United States – Calm before the storm?

Published: 15 May, 2020

For the third week in a row, the slaughter has dipped below 500,000 head. The consumer demand is there, along with the cattle to be sent to slaughter, but the covid 19 virus continues to cause disruption at plants. With most restaurants and other food outlets still closed across the country, the numbers would still have to be back from normal times, but not by this much. Imported beef is currently filling the void. But, at some stage, these cattle will have to come to slaughter, so there will be a spike in supply. Currently, with the beef supply down, the impact upon the hide supply chain has been felt in a positive way. A slow-down was exactly what was needed to halt the downward pressure on prices. As a consequence of the smaller supply, traders and direct suppliers have managed to continue selling along the low, but consistent price ranges recently witnessed. Traders are now reporting to be in the strongest sold forward positions for more than two years. It is hoped that when the tap is turned back on for the slaughter, then demand for hides will have increased to satisfy the extra supply, but this may be wishful thinking, if this comes too soon. Just to put the supply into some form of context, the latest slaughter statistics show that supply is 32% down on the same week for 2019. One thing that is for sure is that the once these cattle do come to slaughter their average weights will be much higher, having spent longer in feed-lots or on grass lands. For further information click here.

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