Beef prices skyrocket as grilling season kicks off
Content Summary: Memorial Day weekend is traditionally the kickoff of grilling season, but the rising sticker price for beef has some consumer reeling.
For Americans, Memorial Day is a somber reminder of the men and women who bravely made the ultimate sacrifice to protect our freedoms and liberties in this country.
For our family, and for so many others, good meat is a cornerstone of a good Memorial Day celebration. Unfortunately, many are reeling from sticker shock as they went grocery shopping for their favorite beef cuts for the weekend.
This is highlighted by many mainstream media reports, indicating the frustration shared by both producers and consumers. Here is a roundup of some recent headlines that paint a picture of the growing concerns.
According to an article from Rabobank, “Renewed competition between foodservice and retail, and strong exports have put the US beef sector squarely in a demand-driven market. In April, beef prices were 18.5% higher at wholesale and 11.5% higher at retail compared to levels seen in 2019.
“Fed cattle supplies have averaged 120% of operational packing capacity since April 2020, so despite record strong beef demand, cattle prices have been depressed throughout the pandemic.
According to Rabobank, U.S. retail beef prices could see increases through much of May and even June, and wholesale prices should begin to moderate in the near future. However, cutout prices could remain 5 to 10% higher than pre-pandemic levels for much of 2021.”
Reuters also reports, “Beef prices are surging worldwide, taking meat off the menu in steak-loving Buenos Aires and spoiling summer barbecues in the United States as Chinese imports rise and the cost of feeding cattle soars.
“Globally, the surge is contributing to the highest food prices since 2014, according to the United Nations food agency, hitting poorer consumers particularly hard as they struggle to recover from economic shutdowns triggered by the COVID-19 pandemic.”
The Washington Post says, “As food prices continue to rise, beef and pork have surged out front. Overall food prices rose 0.4% from March, and are up 1% from a year ago, according to data released by the Bureau of Economic Analysis.
“The price of pork soared 2.6% in the month of April and 4.8% from a year ago, adjusting for seasonality. And while beef and veal prices stayed fairly flat for the month, they are up 3.3% from a year ago. In a season that routinely sees increased demand for beef and pork, this goes far beyond people excited to get back outside to barbecue.”
And an excerpt from The Gazette summarizes the issue, saying: “It’s not just consumers who getting riled up about rising beef prices. Cattle producers are, too. Cattle feeders are seething over a pattern they now consider all-too-familiar: the cost of hamburgers and steaks soar at the grocery store, yet the prices they get for the animals barely budges. The market is dominated by four giant meatpacking companies that together control most of the U.S. beef processing.”
“The current state of the cattle industry is egregious, and must be addressed immediately,” wrote Richard Godfrey, president of the Iowa Cattlemen’s Association, in a May 17 letter to U.S. Attorney General Merrick Garland.
“Since August 2019, the cattle industry has suffered multiple extreme market disruptions, often referred to as ‘black swan events.’ These disruptions are unpredictable, such as the Tyson plant fire in Holcomb, Kan., or the supply chain disruption caused by the COVID-19 pandemic, and are often accompanied by a ripple effect directly or indirectly affecting the cattle industry for an extended period of time. Every market disruption comes with a significant price — some more than others.
“The cattle industry is particularly vulnerable due to few buyers in the market. In the current, an oligopsony of four meatpackers control approximately 85 percent of the processing industry. The concentration of processing power between Tyson Foods, JBS, National Beef, and Cargill has created a severe bottleneck in the beef supply chain during black swan events and has also opened the door for market manipulation.”
Beef is still what’s for dinner, but unfortunately for consumers, inflation, and other factors, appear to be making it harder to afford this grilling season. My best recommendation is to get in touch with a local rancher, and fill your freezers!
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