What Can We Do About "Meatflation?"
There's an image I can't seem to get out of my mind. During the 2020 COVID-19 summer surge, the meat section at my local grocery store was practically bare.
I'd never seen it so empty. And when I was able to find meat, a sign informed me that I could only purchase one or two packages.
I fully understood the problem. Many meat-packers had become infected with the virus, leaving facilities short-staffed. And that caused a big slowdown in the supply chain. But that didn't make it any more pleasant.
Eventually that issue was corrected. It was great to see the meat section fill up again. But now there's a different problem. The meat is there, but the prices are outlandish.
After we take a look at the "why," I want to tell you about a great alternative to pricey meat. So stay with me here.
Beef Prices Lead the Way
Between October 2020 and October 2021, beef and veal prices increased by more than 20%. That's the fastest rate in three decades.
And pork isn't too far behind. It's more than 14% pricier. Chicken checks in at 8.8% more expensive, eggs at 11.6%, and fresh fish and seafood at 11%. Those statistics are from the Bureau of Labor Statistics' Consumer Price Index.
Arun Sundaram is an analyst at CFRA, a Wall Street research firm. Here's what he told CNBC. "All meat prices are up, but beef prices are up disproportionately higher than the rest of the protein prices."
Even some frozen and refrigerated meat offerings considered more affordable are expected to rise in price starting next month. Such as Ball Park hot dogs and State Fair corn dogs. That's according to CNN and reported by Forbes.
Pandemic Still the Culprit
We can blame the pandemic for last year's meat shortages. But what's to blame for this year's higher prices? The same thing.
The shutdown of meat production plants last year meant farmers had nowhere to send their beef. So, they cut back on livestock.
A year to 18 months later is not enough time to catch up, according to analysts. Especially since farmers were concerned about the future. Another problem has been a labor shortage. Which means reduced capacity to process meat.
With restaurants reopening, demand has increased at the same time supply has dwindled. That's a recipe for higher prices. In some cases, much higher prices.
Demand Up, Supply Down
"You have this huge imbalance of supply and demand which is causing the prices to skyrocket," Sundaram said. "The demand side got even stronger as the months progressed in 2021, whereas the supply side of things got worse."
Federal Reserve Chair Jerome Powell echoed his words. "Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors."
And it's not just the price of meat that has gone up dramatically. It's also many of the other components of the process. Including the price of chemical fertilizers. Plus materials used to package meat.
Not to mention the rising cost of carbon dioxide. Used in ground beef production to keep meat cold, it has nearly doubled in price.
Lack of Competition to Blame?
The Biden Administration has also pointed the finger at the lack of competition among meat producers. At one time, four major conglomerates controlled 25% of beef production. They now control 82%.
Tyson Foods has explained price increases by saying it has to pay more for grain, labor, transportation, warehousing, packaging and ingredients.
A statement from the administration criticized the conglomerates for putting higher profits ahead of consumers' needs.
It urged them to consider that people are paying more to put food on the table and that workers are risking their health to keep America fed. It added that farmers and ranchers are facing unprecedented droughts and extreme weather events.
Time to Consider Alternatives
Meat prices will eventually go down. At least we hope they will. But some meat processing facility owners and experts say it's impossible to know when that might happen.
In the meantime, now is a good time to stock up on plant-based protein rather than animal-based protein.
Matt Pavich is senior director of retail innovation at Revionics. It's a pricing solutions provider. He told Today.com this could be an opportunity for a new audience to try plant-based meat alternatives.
"One thing that is clear is that there has been a large growth in meat alternatives in the last year," he said. "And that trend is likely to continue as more and more consumers… don't want to pay the premiums required to get meat these days."