COVID-19 exposes shortage of US beef processing capacity

When a number beef processing plants temporarily went offline or reduced production due to the COVID-19 pandemic, it brought to light the need to add more beef processing capacity in the United States, Don Close, animal protein analyst, Rabo AgriFinance, said.

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(Tyson Foods)
(Tyson Foods)

When a number beef processing plants temporarily went offline or reduced production due to the COVID-19 pandemic, it brought to light the need to add more beef processing capacity in the United States, Don Close, animal protein analyst, Rabo AgriFinance, said.

Close commented on the situation during the webinar, “Stablizing Global Trade in Chaotic Markets,” on May 28. The webinar was the final session of the Future of Global Protein webinar series, presented by the National Institute for Animal Agriculture (NIAA).

“The fallout that we are seeing from the coronavirus is it has clearly brought to light that we don’t have a sufficient volume of fed-cattle slaughter capacity,” said Close. “We were right on the bubble. We were really skirting around the fact that we really needed to add some plant capacity.”

While Close said the United States beef industry is recovering its slaughter rates at a faster pace than most people projected, the industry is still not operating at full capacity. But Close does believe “packers will figure out how to get closer to 100%.”

Not an immediate solution

Even if a decision was made to build a new beef plant in the United States, Close said it would not be an immediate solution to a processing shortage because the process of site selection, obtaining the necessary permits and constructing the facility would take time.

“It would be three years before you would actually be able to start running cattle through that facility,” Close said.

Other coverage from Future of Global Protein series

Other topics discussed during previous Future of Global Protein webinars included population growth trends, competition from cell-cultured proteins, the need to create a culture of innovation in animal agriculture, and questions producers should ask before adopting blockchain technologies.

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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