Meat prices are spiking in the US market
"Meatflation" is a phenomenon that many US consumers may not have witnessed in the last 30 years but is clearly reshaping the market. Animal protein prices have jumped rapidly in the last 12 months and consumption is expected to drop, at least for the following months. "All meat prices are up, but beef prices are up disproportionately higher than the rest of the protein prices," Arun Sundaram, an analyst at Wall Street research firm CFRA, told CNBC.
The price of beef and veal increased 20.1% between October 2020 and October 2021, recent data from the Bureau of Labor Statistics shows. Also, pork prices are up 14%, while chicken meat is 8.8% higher than last year. A similar trend is seen in fresh fish and seafood (+11%) and eggs (+11.6%).
Many of the factors that led to beef’s dramatic price increase can be traced back to 2020 when Covid shut down production plants and hobbled the nation’s meat production capabilities. The slowdown left farmers with nowhere to send their beef, which resulted in them having to cull cattle and other livestock. That, coupled with uncertainty about the future, caused farmers to scale back their production at the time.
At the same time, the current administration blames the four major conglomerates that control 82% of the nation’s beef production — compared to 25% in 1977 — saying that the lack of competition has resulted in not only sky-high prices but also record profits for them.
"These record profits and dividend payments come at a time when consumers are paying more to put food on the table, workers are risking their health and safety to keep America fed, and farmers and ranchers are also facing unprecedented droughts, wildfires and other extreme weather events that put their herds and farms at risk," a recent White House brief says.
Since early 2020, before the COVID-19 pandemic, beef, pork and chicken prices are up roughly 26%, 19% and 15%, respectively, according to EconoFact magazine. However, many producers are facing increased costs with labor, grain, transportation, warehousing, packaging and ingredients. "It might be easier for me to tell you what component hasn't seen inflation this past year," said Donnie King, Tyson Foods CEO.
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