The cyberattack shut down five of the largest beef processing facilities in the U.S., which handles about 22,000 cattle per day or about 25% of the beef capacity in the country and nearly 20% of the pork sold in the U.S. JBS closed meat processing plants in Nebraska, Texas, Wisconsin, and Utah and also reduced processing in Iowa and Colorado plants.
Cattle: Lower Futures: Lower Live Equiv: $242.35 +2.95*
Hogs: Steady Futures: Mixed Lean Equiv: $133.85 +0.53**
* based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.)
** based on formula estimating lean hog equivalent of gross packer revenue
It is almost similar to a little over a year ago when much of the country and world shut down because of COVID-19. Now, the cyberattack on JBS may have a similar effect. It is unclear how long this will last, but there already is an indication meat prices are rising at the retail level due to the expected shortage that might be experienced until this is rectified.
It may be only for a short period of time, but that is immaterial. We saw the impact consumer perception had last year. The JBS plants that shut down handle 25% of the cattle in the U.S. and will definitely have an impact on processing and reduced interest in purchasing cattle this week.
Packers are not likely to throw out bids even at steady cash due to the uncertainty, especially when they have cattle already purchased ahead. This is happening right at the time when the CME has increased daily trading limits for live cattle to $5.00 and feeder cattle to $6.25.
Boxed beef prices shot higher Tuesday with choice up $3.59 and select up $5.55. Current early bids and offers in cattle futures indicate a lower opening.