The American beef market is gradually recovering from the crisis

Analysts expect prices to decline but eventually level off at levels higher than pre-pandemic levels

According to Rob Murphy, executive vice president of JS Ferraro, the market will return to 2018 or 2019 values. However, the price level will be higher than before the pandemic.

In general, the situation with the packaging of products affected the industry. Processors due to lack of labor could not increase its production. Consumer demand for beef tenderloin will remain high during the summer season. Another thing is that beef production is declining due to high corn prices and, as a result, an increase in feed costs.

US slaughter rates in June were below the three-year average. Feedlot placement may be limited this summer due to higher corn prices. Currently, feedlot placement is being encouraged by high pending cattle futures.

Gateway Livestock Analyst Ann Vasco said markets are seeing a forced movement of cattle, with the number of calves for fall deliveries declining from one week to the next.

On July 1, Canfax reported that the number of cattle for feed was reduced by one percent. However, placements in June were up 34% and saw an increase in western Canadian feedlot placements for six consecutive months year on year.

Slaughter rates are high in part because packers' margins are so high that in the first six months of the year, fattening cattle slaughter is up 15% year-over-year and 8% year-over-year.

“Cow slaughter was up 6% from January to June, but it was 20% in June alone,” Vasco said. “Futures are rising because the market is looking at fewer cows in the US and Canada and lower feed supply.”