Loins cuts, typically destined for foodservice channels, picked up little support during the rush.
COVID-19 has created a dichotomy for the US meat industry.
Never before has so much meat been purchased through retail channels in such a short period of time, nor modern supply chains put to the test in order to meet that demand.
The US is both a major buyer and competitor of Australian beef. So, how is the disruption from COVID-19 throughout the US supply chain impacting Australian exports?
The last month has been a roller-coaster for the US wholesale beef market. On Friday 13 March, the US choice cut-out value (a price indicator of the aggregate value of carcase primals) was 208US¢/lb and the country had just 2,100 confirmed cases of COVID-19. By 20 March, COVID-19 cases had climbed to 19,400 and the cut-out had notched its largest ever weekly rally, to finish at 254US¢/lb.
Panic buying – as fear of impending regional shutdowns, movement restrictions and food shortages set in – and retailers scrambling to keep shelves stocked triggered the incredible run on wholesale beef prices.
Beef primals that go into mince, such as rounds and chucks, recorded particularly strong gains. Loins cuts, typically destined for foodservice channels, picked up little support during the rush.
As freezers have filled and retail shelves have been restocked, the panic buying has subsided and almost as quickly as the wholesale market went up, it has come back.
At the close of Tuesday 14 April, the US beef cut-out value was back to 227US¢/lb.
Moreover, foodservice cuts have come under even greater pressure, with wholesale ribset, loin and brisket prices back 29%, 23% and 28% year-on-year, respectively.
Meanwhile, chucks and rounds, geared to retail channels, are up an impressive 26% and 49% year-on-year, respectively.
https://www.mla.com.au/prices-markets/market-news/covid-19-putting-us-beef-supply-chains-to-the-test/#