With all pork processing plants back online Tuesday and the use of plant estimated at about 70%, are pig farmers throughout the country seeing a small break in the storm clouds? Slaughter for Monday and Tuesday jumped back up to an estimated total 718,000 head, which is up 25% from a week ago at 573,000 head and down 21% from a year ago.
“It’s still a fairly fragile environment,” says Christine McCracken, Rabobank senior analyst – animal protein. “There’s a lot of tension in the whole industry now – everyone is trying to do the right things. But we don’t have the levers to pull to make it go faster; we are doing as much as we possibly can.”
Some plants are operating at normal rates, but others are continuing to struggle with labor, McCracken says.
“There’s so much tension built up between not just the unions, but the workers in general, at some of these plants. You have to wonder longer term what a full recovery looks like. Will we ever get back to normal?” McCracken asks. “But you can say that about everything in our economy now – not just plants and workers.”
John Nalivka, president of Sterling Marketing in Vale, Ore., says he believes throughput operations will continue to improve as COVID-19 protocol becomes more incorporated into plant operations.
“I am not sure how much of the protocol like distancing and barriers on the processing lines will remain into the future, but certainly, many of the changes will become permanent so operations will be slower than in the past, but not to the same extent as we have seen over the past three weeks,” Nalivka says. “Packers will have to be flexible and creative as they incorporate longer term solutions and I think they will be.”
The efficiency of the U.S. packing-processing system is important to margins, he adds.
“Record wholesale markets are not going to be here forever, and plant efficiencies will once again become a high priority, albeit with changes that have resulted from COVID-19,” Nalivka says.
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