In short, we can say that Beef and other Meat have risen in cost due to numerous factors like the Weather, Labor shortages, Rising Consumer demands, the Pandemic, a decline in Feed supply, and more.
Yet before we try to understand what exactly has led to these conditions, let’s dive into what we know about the process of making Meat.
How do we make Meat?
First, understand there are different kinds of Meat – Red Meat that comes from mammals, White Meat that comes from fowl, Seafood that comes from fish or shellfish, and Game is Meat taken from animals that aren’t usually domesticated, like deer.
The processing of different meat involves a few lengthy but similar steps:-
It starts with the Stunning and Slaughtering of livestock, where the animal is stunned either electrically or with the use of carbon dioxide to avoid the prolonged suffering of the animal.
The next step is Butchering, which begins with the removing of an animal’s pelt or hides, or in the case of fish – their scales, to reveal a dressed carcass which is then cut carefully, avoiding the innards of the animal.
The meat is then Graded on a scale of A to C based on the firmness and conformation of the carcass.
And finally, the Meat is Cut into smaller portions to be sold and distributed. Chicken is deboned, and livestock is cut up into minute pieces like Ribs, Brisket, or Steak.
The last step is Packaging, where the Meat is vacuum wrapped in plastic to be cooked and devoured by all customers alike.
Now that we’ve understood this simplified process, we can move on to some of the reasons why the price of Meat is on the rise.
Why is Meat So Expensive?
As per the Bureau of Labor Statistics, the inflation rate for food is 0.9% compared to the previous year, while the index for meat increased by a whopping 17.6%. A few reasons for this hike are listed below:-
Weather
The weather has played a big part in the rise of Meat prices. There have been droughts throughout the western USA and Australia for the past year, which has resulted in a huge liquidation of cattle.
Due to these droughts, farmers have had to cut back on livestock. Including this with the poor crop growth, it’s almost impossible to feed the animals with the high prices their food comes for.
There are also unprecedented wildfires and other extreme weather conditions that factor into play that put the herd and their farmers at risk. It’s been a tough few years for everyone.
Supply, Demand, and the Pandemic
At the peak of the Pandemic, a large number of meatpacking facilities and production units were shut down, resulting in a decline in the making of Beef. Even though they’ve been allowed to open again, they haven’t recovered completely.
There has been an enormous Labor shortage – from food processors to the trucks that deliver the meat, which in turn has slowed down production.
This reduced production came at a point where demand was at an all-time high, both in Restaurants and literally other countries like Japan, South Korea, and a big part of the Middle East, driving the prices even higher.
High demand in high-value markets adds to the pressure on retail prices locally, especially in countries like Australia, where almost 70% of their stock/sales come from export.
The rising shipping container rates and global inflation don’t help either when it comes to export, which further affects Meat prices.
So, now we have this imbalance of supply and demand that is one of the main reasons for the skyrocketing prices. The demand keeps increasing, but the supply side can’t seem to keep up.
Another issue is the lack of supply chains in the U.S. Tyson Foods, JBS, National Beef, and Cargill – the big four meat packing companies, dominate 85% of the beef market, leaving no room for rivals.
The lack of competition has therefore driven up prices, giving them huge profits when compared to ranchers and farmers who have barely made any profit since the beginning of the Pandemic.
Ranchers pay the high cost of cattle feed, meaning the consumer isn’t winning, and neither are they. The guys in the middle, like the big companies mentioned, overcharge grocery stores and end up making the most.
This is a clear reflection of the market being distorted through the lack of competition!
Producers and distributors also have to deal with the additional charge on protective equipment and social-distancing-related measures that trickle down to grocery shoppers who now have to pay a lot more for their favorite cut of meat.
The average consumer now pays 33% more for their Beef products, 38% more for Pork, and 19% more for Chicken as compared to the last quarter. Talk about a hefty grocery bill.
Feeding Cattle
It’s simple. Farmers need pasture for feed which means some big fertilizer bills are involved.
There has been a steady rise in corn and soy prices, which in turn, makes feed more expensive, resulting in higher rates for meat.
Many countries import supplies for Feed from China. When the Pandemic began and China began to hold back on these supplies, many were left scrambling.
The prices were bound to go up sooner or later, factoring this in with the shortage of crops because of the drought and the export of feed to other countries.
Conclusion
Reading through the article, we’ve finally understood what’s been driving up the price of Meat in countries everywhere – the Weather Conditions, thanks to global warming, the Pandemic creating a Supply and Demand problem along with Labor Shortage, and Global Inflation.
But the good news is we won’t have to worry about the prices staying high indefinitely. Statistics show that wholesale prices have begun to moderate, meaning we can go back to Meat shopping to your heart’s content soon enough.
Q. Will Meat prices come down any time soon?
There is very little chance of that happening. Prices are more or less stable at the higher price point right now, meaning people are continuing to buy Red and other Meat at the prices they’re being sold for.
As long as consumers continue to buy Meat at these inflated prices, there won’t be any going back down soon.
Q. Are all Meats equally affected?
Actually, No, they’re not.
More expensive meats like Beef and Veal have seen some of the largest price hikes at 20.1% over the last year. Whereas traditionally cheaper Meat like Chicken and Lunchmeat has only seen moderate price hikes at 8.8% and 3.1%, respectively.
Funnily enough, Hot Dogs have actually seen a decrease in cost by 3.3%, which gives you hope for better times.
Q. Is there any way consumers can find good deals on Meat?
Yes, there is! Until prices settle down, customers can look up where the meat is produced through the USDA mark of inspection, as well as the Establishment (EST) number.
Once you look up these numbers on the internet, you will find if the meat is produced by one of the big four meatpackers and if it is worth the inflated prices!
