The availability of cattle for slaughter continues to decline, and US beef packers are operating with almost 10 percentage points less capacity than a year ago. The contraction of the national herd and import restrictions have worsened the industry’s underutilization.
According to the US Institute of Meat report, “packing plants were operating at 77% capacity during the first week of October, compared with 85% a year earlier.” Several plants have reduced shifts or shortened workweeks due to the shortage of market-ready cattle. The lack of supply reflects a contraction phase in the cattle cycle compounded by adverse weather conditions.
The report also cautions that “the longer the suspension of cattle imports (from Mexico) lasts, the greater the economic impact will be.”
With a smaller herd, negative packer margins, and reduced shifts, the industry faces a highly vulnerable scenario—even as domestic beef demand remains resilient.
