On Sunday, May 30, JBS Foods, the world’s largest meatpacker, was the victim of a cyberattack that resulted in the closure of nine of its plants in the U.S. on Tuesday, June 1. Typically, very little cattle slaughter takes place on Memorial Day. The impact was fortunately short-lived, as facilities were fully operational by Thursday, June 3.

As this year’s Memorial Day holiday fell a week later than last year, it is important to put the week into perspective via previous Memorial Day weeks. Based on USDA Agricultural Marketing Service (AMS) data, actual and estimated daily cattle slaughter numbers were compared across previous Memorial Day weeks in Table 1.

As is the case in a holiday week, Saturday slaughter is typically elevated above normal to make up some of the lost slaughter on the holiday.

2021 beef production raised slightly on strong cow slaughter in the second and third quarters

While there have been improvements in drought conditions in some regions recently, pasture and range conditions in areas like the Northwest and North Dakota remain very poor compared to last year (see Table 2).

Based on USDA-AMS data for actual and estimated federally inspected cattle slaughter and the number of weekdays in May, the pace of cattle slaughtered has exceeded levels a year ago when the sector was facing COVID-19-related closures and slowdowns but remains behind 2019, principally on fed cattle slaughter.

The pace of fed cattle slaughter was up 23% above May 2020, but down about 1% from May 2019. The pace of cow slaughter for May is estimated 6% higher than a year ago and 7% above May 2019. Given high weekly beef cow slaughter numbers and persistent drought conditions, second- and third-quarter cow slaughter was raised, but the higher-expected cow slaughter is largely offset by lower steer and heifer slaughter expected in the second quarter and a reduction in fourth-quarter cow slaughter. These changes in slaughter raised the annual beef production forecast by 5 million pounds from the previous month to 27.91 billion pounds.

Fed steer price estimates rise in second and third quarters; feeder prices remain steady

In May 2021, the average price for all grades of live steers sold in the 5-area marketing region was $119.37 per hundredweight (cwt), up 7% from 2020. According to the National Weekly Boxed Beef Cutout and Boxed Beef Cuts report, beef prices were higher relative to last year. Choice and Select boxed beef prices for the week ending June 4, 2021, were up $40 and $32 from a year ago at $338.56 and $310.80 per cwt, respectively. Thus, the second- and third-quarter forecasts for fed steers were increased $2 and $1, respectively, from the previous month to $120 and $115 per cwt. The 2021 annual forecast for fed steers was raised 70 cents from the previous month to $117 per cwt. The 2022 price is unchanged from the previous month.

Feeder steers weighing 750-800 pounds that were sold in the Oklahoma City National Stockyards had an estimated average price of $137.16 per cwt for May, up almost $10 per cwt from May 2020. The feeder price for June 7, 2021, averaged $140.79 per cwt, over $10 above the price recorded the same week a year ago. Given recent price data, the 2021 price was unchanged from a month earlier at $139.30 per cwt. The 2022 price is unchanged from the previous month.

Record exports in April bolstered by China

For the second month in a row, the U.S. exported record volumes of beef to a recovering global economy. In April, U.S. beef exports were 287 million pounds, 22% above a year earlier and 18% above 2019 levels. Larger year-over-year shipments to China, South Korea and Mexico more than offset reduced exports to Japan, Canada and Hong Kong. As Table 3 shows, cumulative exports for January to April reached 1.08 million pounds, up 8% from a year ago.

U.S. beef exports to South Korea set a record for the month of April; their global beef imports year-to-date are at their highest recorded levels. Although U.S. exports to Mexico in April are up 81% from a year ago, they are down 31% from 2019, suggesting that a sluggish economy and relatively high beef prices have likely constrained purchases. The largest year-over-year and year-to-date increase is from China, which surpassed Mexico to become the third-largest U.S. beef export destination.

Exports to China reached over 49 million pounds in April, with shipments above 40 million pounds for the second month in a row. Total exports to China in January through April 2021 totaled 140 million pounds, about 14 times greater than the same period last year. This continues to be largely a function of several factors, including changes to U.S. market access that were implemented in March 2020. In addition, demand for meat protein to offset low domestic supplies of pork is expected to keep supporting China’s beef imports.

Lower U.S. exports to Japan in April were likely a temporary result of reduced shipments to avoid higher tariffs due to the safeguard that began March 18 and ended April 16. On April 17, 2021, the import tariff on U.S. beef dropped to 25%, as prescribed in the tariff reduction schedule of Year 3 of the U.S.-Japan Trade Agreement.

Based principally on expected strong shipments to Asia, the forecast for beef exports in 2021 was raised in each outlying quarter by a combined 115 million pounds from the previous month for a total of 3.34 billion pounds, 13% over last year and 10% above 2019 levels. The 2022 beef export forecast was raised by 75 million pounds to 3.3 billion pounds, maintaining a slight decline into next year.

Strong buying from Canada and Brazil lifts import forecast

In April, U.S. beef imports rose 2% year over year to 275 million pounds, principally on higher imports from Canada and Brazil that more than offset declines, primarily from Australia and New Zealand. Table 4 shows that cumulative imports for early 2021 are down 74 million pounds, or 7% from the same period last year.

Because the increase in April was greater than expected, import forecasts for second- and third-quarter 2021 were raised. Specifically, the second quarter was raised 30 million pounds to 820 million pounds and the third quarter was revised up by 30 million pounds to 810 million pounds. In total, the 2021 annual import forecast was raised by 60 million pounds to 3.02 billion pounds. The 2022 import forecast was raised 40 million pounds to 2.99 billion pounds.