Page Contents
The real reason behind falling meat prices
Meat lovers, rejoice! If you’ve noticed a pleasant change in your grocery bills lately, you’re not imagining things. Meat prices have been on a steady decline, and it’s not just a temporary fluctuation. In this article, we’ll explore the real reason behind the plummeting meat prices and how it’s affecting various stakeholders in the industry.
The promise of stabilization
During the early stages of the pandemic, meat shortages became a major concern. However, meat processors assured consumers that these shortages wouldn’t last forever and that supplies would eventually stabilize. According to industry experts quoted in the Wall Street Journal, it appears that long-awaited moment has finally arrived. Retailers like SpartanNash are now promoting low-priced ground beef, ribs and sirloin steaks, signaling an abundant supply. Lori Raya, the chain’s chief merchandising and marketing officer, says, “The supply is plentiful right now. Barring any outbreaks, we’re feeling pretty good.”
This positive development means that meat that was previously unaffordable or scarce between April and August is now within reach of consumers. In fact, some cuts are now cheaper than they were before the outbreak. Prime rib, for example, was 11 percent cheaper in the first week of September than it was at the beginning of the year. New York strip steaks were down 8 percent, while brisket prices were down 20 percent. Even chicken leg quarters have seen a significant price drop, about 40 percent from 2019 levels.
Shifting Consumer Choices
The decline in meat prices coincides with an increase in the variety of protein options available to consumers. The New York Times reports that during the height of the meat price spike, sales of plant-based meat substitutes increased by 35 percent. The pandemic-related shutdowns of meat plants prompted many people to explore plant-based alternatives, not only because of the cost, but also as a way to combat climate change.
Producers of plant-based meats, such as Beyond Meat, have seen record sales during this period. Jay Toscano, executive vice president of tofu producer Pulmuone Brands, explains the surge in demand: “We’ve been struggling for years to figure out how to get more tofu into people’s mouths in the US. This year we’re seeing 20 percent growth, and we could have easily seen 50 percent growth if we could have kept up with production.
The impact on farmers
While lower meat prices may be good news for consumers and plant-based meat producers, the same cannot be said for livestock and poultry farmers. The temporary shutdown of meatpacking plants left farmers with a backlog of cattle and hogs on their farms and feedlots. Tyson Foods estimated that approximately 1 million cattle and 3 million hogs were affected, creating significant challenges for farmers trying to manage the surplus.
Longer feeding periods for the cattle have resulted in weight gain, which has led to a change in the quality of the meat. Increased marbling has transformed cattle into sources of prime beef, the highest USDA grade. As a result, prime steaks have become more affordable for consumers. However, these disruptions are expected to impact meat producers’ bottom lines, with the industry potentially facing a loss of up to $5.1 billion, or 8 percent of total revenue for the year.
To help struggling farmers and food producers, President Donald Trump has announced $13 billion in aid to mitigate the impact of the pandemic on the agricultural sector.
Bottom line
The decline in meat prices can be attributed to a combination of factors, including stabilized supply, increased consumer interest in plant-based alternatives, and the challenges faced by livestock and poultry farmers. While consumers enjoy more affordable meat options, it’s important to recognize the impact on various stakeholders within the industry. As the market continues to evolve, it will be interesting to see how these trends shape the future of the meat and plant-based protein sectors.
FAQS
Why are meat prices falling right now?
Meat prices are falling due to a combination of factors, including stabilized supplies, reduced demand, and increased competition from plant-based meat substitutes.
Will lower meat prices last?
While it’s difficult to predict with certainty, the current downward trend in meat prices is expected to continue for the foreseeable future, barring any unforeseen disruptions in the supply chain.
Are lower meat prices a result of lower quality meat?
No, the lower prices are not an indication of lower quality meat. The decline in prices is primarily due to market dynamics and the temporary surplus of livestock and poultry caused by the closure of meat processing plants during the pandemic.
How are farmers affected by falling meat prices?
Lower meat prices have had a negative impact on farmers, particularly livestock and poultry farmers. The backlog of animals on farms and in feedlots has created challenges in managing the surplus and may have affected farmers’ profitability.
Are plant-based meat substitutes contributing to the decline in meat prices?
Plant-based meat substitutes have gained popularity among consumers, and their increased demand has influenced market dynamics. While it’s not the sole reason for the decline in meat prices, the availability of alternative protein options has created more competition in the market.
Will the government provide support to farmers affected by falling meat prices?
To mitigate the impact on farmers and food producers, the government has announced financial assistance programs. In the case of the United States, President Donald Trump has approved $13 billion in aid to support farmers affected by pandemic-related challenges.