The price of meat is going up. Choices will be fewer in your grocer’s meat case. You can’t buy as much as you want and, just like everything else during a pandemic, the reasons are complicated.
Costco, Sam’s Club and other grocers have put temporary limits on fresh beef, pork and poultry while the meat processing plants struggle to keep their workers safe from coronavirus outbreaks.
And while meat prices at grocery stores have crept up this week, wholesale prices are skyrocketing even as the prices farmers can fetch for their animals have collapsed, said David Anderson, livestock economist at Texas A&M.
“We have a logjam right now. And we haven’t seen all the higher prices we’re going to see,” Anderson said. Prices in the grocery store now reflect contracts signed by retailers six weeks ago, and future deliveries are going to cost a lot more.
This week, the wholesale price of a USDA Choice box of beef cuts from a whole carcass is priced at $4.10 a pound, up from $2.05 a pound in early March.
Shoppers may not find all cuts of meat in their grocery store, but there don’t appear to be major shortages. Grocery stores learned something from toilet paper hoarding and immediately put limits on meat in place.
“We’re going to have plenty of meat. There will just be less than what we could get before any of this hit,” Anderson said. “There will be less variety.”
Some stores are asking suppliers to produce the more popular thinner cuts of beef and more ground beef, which shoppers tend to buy during an economic downturn. So far, 30 million Americans are out of work.
But nationwide, demand has pushed the retail prices down for the more expensive cuts of meat. Ribeye steak is $8.39 a pound this week vs. $9.91 last week and $10.78 a year ago, according to the USDA.
Meanwhile, beef patties cost an average of $5.54 a pound this week, $5.17 last week and $4.06 last year.
Jobless consumers aren’t the only ones buying less pricey steak and tenderloin.
When restaurants shut down, the price of premium cuts of steak collapsed. Then the processing plants started shutting down, which meant supplies tightened up. Now, just as restaurants are trying to open, their meat prices are higher, so it’s a double whammy for them, Anderson said.
And fast food restaurants may be signaling some ground beef shortages. Customers complained on social media that Wendy’s has been out of burgers as Wall Street speculation turned to the fast-food chain, which is scheduled to report first-quarter results Wednesday.
Stephens analyst James Rutherford estimated that 18% of Wendy’s restaurants were out of fresh beef on the menu as of Monday night.
Wendy’s has been making its usual deliveries of two to three times a week to its restaurants, the company said in an email. “However, some of our menu items may be temporarily limited at some restaurants in this current environment,” Wendy’s said, adding that it’s working with suppliers to minimize the impact on customers.
Here’s what some other grocers said about their meat supplies:
“To ensure access to desired products to as many members as possible, we are limiting the purchase of all poultry, beef, lamb and pork items to one (per item),” said Sam’s Club spokeswoman Amy Wyatt.
Costco said Monday it is limiting purchases to three items of fresh beef, pork and poultry.
“Due to high demand and to support all of our customers, we are now limiting the number of ground beef, fresh pork and fresh chicken products to two each per customer,” said Kroger spokeswoman April Martin.
Walmart said in an emailed statement that meat continues to be in high demand as customers stock up on protein. “As we would normally do during periods of high demand, we are working through our supply chain to continually replenish items as quickly as possible to help us meet the needs of our customers,” Walmart said.
Meat processing plants have been hard hit by the coronavirus. The Centers for Disease Control and Prevention said as of Friday that 115 meat and poultry plants in 19 states have reported 4,913 employees with coronavirus and 20 deaths.
Major U.S. meat processors, including Cargill, Smithfield and JBS, have reported outbreaks in plants. U.S. meat and poultry processor Tyson Foods said Monday that three of its six main plants are closed in Washington, Nebraska and Iowa, and the others are operating at reduced capacity.
President Donald Trump’s recent executive order invoking the Defense Production Act to keep meat processing plants open during the coronavirus pandemic has been criticized for not including strict standards for safely putting workers back in the facilities.
American farmers, whose family businesses have already been disrupted by three years of tariff wars, now face a new layer of uncertainty.
If a processing plant shuts down, there’s no place for animals to go, leaving farmers with no market.
It’s a “very rare” situation for farmers, Texas A&M’s Anderson said. Farmers have been at the short end before, Anderson said. In 1998, hog farmers raised more livestock than processing capacity could handle.
In the early 1970s, President Richard Nixon’s wage and price controls were unevenly applied, he said, taking the price of hogs and chicken to “practically zero.”
Plant-based meat alternatives are taking advantage of possible supply shortages to grab consumer attention. The biggest maker in the category, Beyond Meat, has showed up in Dallas-area refrigerated cases at Target, Costco, Walmart and Kroger in recent months. Competitor Impossible Foods, which made a big splash with its Burger King Whopper last summer, said Tuesday that it’s expanding to Kroger stores in Dallas and Houston.
Meat is harder to hoard than other grocery items because households have limited refrigerator and freezer storage space, and it’s more expensive than the toilet paper, bleach and other items people have been stockpiling.
And the limits put in place in March and April are still around. Grocery stores are imposing limits on lots of items, including baby wipes, rubbing alcohol and hand sanitizer.