As the meat-supply crunch hits grocery stores,
expect higher prices for burgers and steaks, purchase limits and smaller selection
By Jaewon Kang and Jacob Bunge
May 6, 2020 8:37 am ET
The coronavirus pandemic has disrupted production at U.S. meatpacking plants, leading to higher prices and scarcity for popular items like ground beef and chicken breasts in supermarket meat cases. Grocers, seeking to head off panic buying, have begun limiting purchases and say they are preparing for intermittent shortages through May if not longer.
These shortages may intensify in the coming weeks given the lag between production at the slaughterhouses and distribution to stores. That means shoppers can expect higher prices, slimmed-down selections and nudges to choose plant-based meat alternatives or less popular cuts like sirloin steak.
As consumers cook more at home, they are buying more protein. Supermarket meat sales are up about 41% year-over-year for the week ended April 25, according to research firm Nielsen.
Alicia Bedard, a 35-year-old mother of four boys, said her local Market Basket store in Royalston, Mass., had placed purchase limits for meat and was out of chicken when she went over the weekend.
“I felt like I was being punished because I have six people in the family,” said Ms. Bedard, who bought beef patties and pork chops. Unable to buy steak for her husband’s birthday, Ms. Bedard tried to buy meat from a local farm, but was told she would have to wait until the end of May.
Customers at ShopRite and Price Rite chains, owned by Wakefern Food Corp., are allotted two items each of beef, ground beef, pork and chicken. In-store butchers are cutting larger-size meat meant for restaurant sales, weighing and repackaging for shoppers.
“We’ve been adapting and adjusting on a week-to-week basis,” said Karen Meleta, vice president of consumer and corporate communications for the supermarket chain.
Kroger Co., Costco Wholesale Corp. and Albertsons Cos. have also limited fresh meat purchases in some stores. New York-based Gristedes Supermarkets urged consumers to stock up on meat in a promotion sent to customers Tuesday, with photos touting fully stocked cases of beef and pork.
Around 20 major meatpacking plants have temporarily closed during the past several weeks due to Covid-19 outbreaks among employees, cutting U.S. beef and pork production last week by about 35% from the same period last year, according to the U.S. Department of Agriculture. Agricultural lender CoBank estimated chicken production fell 7%.
Last week, President Trump issued an executive order that gave the U.S. Department of Agriculture greater discretion over meatpacking plants, allowing them to continue operating and shielding them from state and local pressure to shut down due to Covid-19 outbreaks among workers. Some plants remain closed and others only partially staffed, industry officials said, reducing overall meat production.
Higher Prices, Less Selection
Grocers expect to have fewer offerings of beef in the weeks ahead, a challenge given the approach of grilling season when consumers typically spend more on meat. Processed cuts, such as prime beef and boneless pork loin, will be less available because they require more manual labor at a time meat suppliers are looking to speed the packing process. Whole chickens, for example, might be easier to find, they say.
The supply chain disruptions are driving meat prices higher, costs that many grocers are passing on to consumers. Discounts will be scarce.
Forecasting levels of meat supply beyond the next month or so will be tough, said Roger White, senior vice president of sales and merchandising at Associated Food Stores, an association of more than 400 independent retailers.
Consumers are “going to find meat on the shelves,” he added. “They might not find every single item they’re used to seeing.”
Midwest chain B&R Stores Inc. is selling more round and T-bone steaks, cuts that are less popular but more easily stocked, said President Mark Griffin. He said the chain isn’t highlighting any cuts after a promotion for rib-eye last week resulted in a rapid sellout.
The value of choice-graded beef carcasses, a source of burgers and steaks, hit a record $422.57 on May 5, surging 63% over the past two weeks. Wholesale ground beef prices have climbed about 40% over the past two weeks, and researchers at CoBank project retail beef prices by July to be 20% higher than last year’s level.
Hugo Morales, who runs a printing business and lives in Ontario, Calif., said he has noticed higher beef and pork prices at his local supermarkets. He estimates he is spending about 25% more on grocery trips to feed his family of five.
“We’re pretty dependent upon meat. We have it with almost every meal,” said Mr. Morales. The 39-year-old said he bought strip steak instead of rib-eye to save money.
Overall retail prices of fresh meat, including beef, pork and poultry, have increased about 8.1% year-over-year for the week ended April 25, according to Nielsen. For the week ended Jan. 4, meat prices had been up 2.2% year-over-year.
Mark Skogen, chief executive of Skogen’s Foodliner Inc., which operates as Festival Foods, said he is working with any suppliers it can find to load up on meat.
“As long as you can limit hoarding, there’s going to be protein to be eaten,” he said, adding that seafood sales are rising, too. Festival Foods is expecting to have fewer promotions and sales on meat.
Going Beyond Burgers
This week, Kroger will start selling plant-based meat products from Impossible Foods Inc. at 1,700 of its stores. A company spokeswoman said the partnership was arranged before the pandemic and that plant-based food is among Kroger’s fastest-growing categories.
Beyond Meat Chief Executive Ethan Brown said the company over the next few months plans to discount its products and sell bulk packages to be more cost-competitive with pricier ground beef, and capture new customers.
Click here to see the article online. Please be aware, the Wall Street Journal does require you have a subscription to access the content.