Remember what grocery shopping was like in the first days of Covid-19? It felt like the entire country was panic-buying for a huge blizzard all at the same time, with a new emphasis on social distancing upping the stress and degree of difficulty. While that led to widespread shortages across many food categories, meat, whose supply chain challenges were exacerbated by Covid-19 outbreaks at multiple processing plants, seemed especially hard to find.
Well you can certainly say things have changed a bit over the last six months. Not only is meat now plentiful, in some cases it’s even cheaper than it was before the pandemic began. Seriously.
According to The Wall Street Journal, the situation is a product of rebounding supply meeting diminished demand. Though production at slaughterhouses was largely diminished in April and May, their output now exceeds production levels at this point of 2019. In the interim, though, cattle often spent more time than normal grazing and putting on weight, pushing up the percentage of cows assigned “prime beef” grades by the USDA.
In the case of cattle, the glut of great beef is pushing down prices for top cuts. Nielsen data indicates that prime rib sold for $7.15 a pound on average for the week ending September 5, a double-digit drop from the beginning of the year. New York strip is also 8% cheaper than it was in January, and the cost of brisket has plummeted almost 20%.
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Another factor is the way the pandemic has tightened the export market. In July, US exports fell for chicken (2.6%), pork (4.8%), and beef (9%) all fell, a product of tighter restrictions, logistical challenges, and other complications unique to 2020.
While the boost in supply and the reorientation of demand towards domestic consumers has pushed prices down, don’t expect the savings to last forever. With things operating normally, major producers hoping to stem the losses from lower prices are cutting supply. For example, the Journal notes that chicken producers are already scaling back, placing almost three percent fewer chicks on farms in August than they did in February.
The correction makes basic economic sense, but it could cause a new wave of meat market disruption should Covid-19 disrupt production again. It might be worth clearing out some space in your freezer and stocking up just in case, because this unpredictable year isn’t over yet.
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