Scott Bauer, for CME Group
AT A GLANCE
- Livestock futures have been steadily climbing, and rising demand for meat in a post-pandemic summer could push prices even higher
- Beef prices at retail are nearly 20% higher than they were in 2019
Grilling season is here. From Memorial Day to Labor Day, grilling season is at its peak and beef products are in high seasonal demand. Meat prices could surge as a post-pandemic summer, filled with barbecues and gatherings, is finally here.
In 2020, the grilling season was a bust because of social distancing guidelines. Rising sales of outdoor barbecue grills during the pandemic may provide an even bigger boost this year as many people will look to make up for the lost season in 2021. If you're planning to buy steaks, burgers or even pork, prepare yourself to pay more.
The Post-Pandemic Summer
Livestock futures have been steadily climbing in 2021, and rising demand for meat products in a post-pandemic summer could push prices even higher, not just in the U.S., but globally. The Food and Agriculture Organization of the United Nations says global food prices rose in May at their fastest monthly rate in more than a decade.Restaurants and consumers continue to pay more for meat, as beef prices were 18.5% higher in April compared to the same month two years prior.
Larger meat packers and processors are having a hard time keeping up with beef demand.. A report from Rabobank, highlighted by Food Ingredients First, found that U.S. beef prices in April were 18.5% higher at wholesale and 11.5% higher at retail than the same month two years ago. Major beef producing countries are seeing prices soar even further. The Rabobank report found that rising demand in China drove April beef cattle prices up 9% year over year, which is a 30% increase from 2018.
Further, a recent cyberattack on JBS, the world’s largest meat company by sales, temporarily shuttered production at a time when meat products are flying off the shelves. This, along with ongoing supply chain issues, may continue to hinder the meat industry’s recovery from the pandemic and drive prices higher for consumers throughout the summer.
Appetite for Ribs
There are similar trends in pork markets. Hog supply is tight and processors are having a hard time finding enough hogs to keep up with that demand. America’s appetite for ribs and hot dogs pushed hog prices to the highest in nearly seven years as the summer grilling season kicks off.
The price of pork soared 2.6% in the month of April and 4.8% from a year ago, adjusting for seasonality. Additionally, data from the U.S. Bureau of Labor Statistics found that consumers were paying roughly 11% more for a chicken breast in March 2020 from a year earlier. These costs are soaring even higher when compared to the pre-pandemic prices of 2019.
Warm temperatures have always been a seasonal lift for meat demand but the combination of rising demand and limited supply has bumped up prices across the board. Consumers preparing for backyard barbecues are getting hit with higher prices amid rising food inflation.