US Meat Processing Recovers From COVID-19 Dip

According to figures released by the US Meat Export Federation (USMEF), pig slaughter numbers have been on the rise. In the 26th week of the year, there was an 11 percent increase compared to the same week last year, with a total of 2.6 million pigs being processed. Overall figures indicate that pork production has been growing steadily over the last four weeks, according to Porcicultura, and despite the COVID-19 crisis, total annual US production capacity continues to grow. Beef also saw a rise in the week of June 27 of 1 percent compared to 2019, translating to a total of 680,000 heads of cattle processed. The figures are striking considering the fact that in the month of April and May, due to multiple COVID-19 outbreaks, many meat processing plants had to temporarily shut down. In May, according to the US Department of Agriculture, slaughter of pork and beef was down by 17 percent and 23 percent respectively, Porcicultura reports.

The President and CEO of USMEF stated that during these two months, the US meat industry faced “significant challenges” for both beef and pork processing. This, he explains, was not just due to shut down but also due to regulations that were put in place to stop the potential spread of the virus among workers. The rebound, he attributes, is due to the fact that many improvements were made in logistics and slaughtering following social distancing guidelines.

The shutdown of US meat processing plants in April and May presented significant opportunities for Mexican exporters who have not yet suffered a similar fate. Mexican meat exports have jumped significantly, not necessarily due to COVID-19, but to a growing demand in the US and Asian countries. Mexican beef exports to the US have been rising for years. Asian countries have increased imports from Mexico after Mexican plants were able to raise their product safety levels. This year, however, has been particularly good.

Grupo Consultor de Mercados Agrícolas (GCMA) reported on June 23 that overall, Mexican meat exports rose by 32.6 percent in the first five months of the year compared to 2019, totaling 287.8 tons. The total value of exported beef, pork and chicken rose by 28.5 percent, reaching US$1.12 billion. Beef exports specifically rose by 19.7 percent, seeing an increase in value of 20.9 percent at US$752 million. The primary destination was the US, at 85 percent, followed by Asia-Pacific at 11 percent. Pork meat exports in the first five months of the year increased by 54.7 percent, growing in value by 47.2 percent reaching US$374.8 million. In this area, shipments to China are the primary driver of growth, representing 37 percent of the total exported volume. In May, this market increased in volume by 36 percent compared to April.

The Chinese market has been hungry for Mexican pork after the outbreak of the African swine virus that had a devastating impact on domestic production. While domestic producers are now recovering, there is still the possibility of more outbreaks in China.

Hopefully, Mexican meat plants can learn from the case of our northern neighbor and ensure many preventive measures are in place to mitigate the impact of similar outbreaks. One advantage of the Mexican meat industry is that operations are generally smaller scale, Reuters writes. This makes larger outbreaks less likely and if a plant were to shut down, the impact on sector processing capacity would be easier to mitigate.