Backlash from consumers as beef prices surge in the US

Since the start of the COVID-19 pandemic, beef prices in the US have increased by as much as 30%.

Some analysts have attributed this to rising inflation, which has pushed up consumer goods’ prices across the board.

Since 2019, the price of chuck roasts increased nearly 29% to US$6,80/lb (about R101,34/453g); ground beef to US$4,68/lb (R69,75/453g), or nearly 23% higher; and sirloin steak, up 30% at US$10,59/lb (R157,82/453g), the US Department of Agriculture said in a statement.

The rapid rise in beef prices had even caught the attention of US Congress members who were questioning the reasons behind it, and were holding hearings on the matter, according to the TribLIVE.com website.

Agriculture and judiciary committee members were demanding transparency in pricing and explanations of how the large companies structured deals with producers and feedlot owners.

While some industry stakeholders maintained that market forces were pushing up prices, farmers, retailers and consumers were questioning this assertion in the face of record profit margins achieved by the meat processing and packing industry.

According to a statement by the North American Meat Institute, prices had increased because the pandemic resulted in new costs for the industry, such as providing personal protective equipment for employees and installing protective shields in factories.

A slowdown in production at abattoirs or shutdowns due to employees contracting the virus had also reduced production, while there was the added expense of transportation because of a shortage of truck drivers.

The nation’s big four beef processing and packing companies, Tyson Foods, Cargill, JBS and National Beef Packing, controlled 80% of the market.

During the spring of 2020, these companies could make up to US$1 000 (almost R15 000) for every head of cattle “they turned into a box of cuts”, HedgersEdge estimated.

In recent months, it had fallen to between US$300 (R4 470) and US$400 (R5 961), but, for most of 2018, this figure was below US$200 (R2 980).

However, the increase in prices did not translate into higher prices for cattle producers, with Cleve Jackson of Floyd County in Georgia saying prices received for live cattle had not “wavered more than a dime or two from the US$1,40/lb [R20,86/453g]” he received at his most recent auction.