by Jeremy Johnson, Meat & Specialty Category Manager
The situation with meat is not unlike most other foods struggling with the unknown during this pandemic. Fears of meat shortages are no less real than the flour and sugar shortages seen earlier in the shelter-at-home period. Those shortages appear to be stabilizing.
The meat situation developed under different circumstances than of other items. Those shortages were at retails as consumers stocked pantry shelves beyond normal levels, and manufacturing and distribution needed time to catch up. There was never a real shortage of food.
Bottleneck
The meat situation is different with the bottleneck at the processing level. There is a real shortage of meat with reduced amounts coming through the pipeline, even as livestock supplies are growing at the farm level. This bottleneck has even affected smaller processors and is causing prices to go up.
Wisconsin Meadows’ beef price increase is linked to their processor passing on COVID-19-related charges that they incurred as a result of needing to be compliant with Federal law, as well as incentives to keep folks working. Specifically, they have changed their complete shift structure to ensure fewer people on an assembly line to comply with federal crowd-size directives. Fewer people on a line has reduced production speed which is limiting total kill capacity that is then limiting supply. This in turn is driving up retail prices even more.
Wisconsin Meadows’ USDA processor has initiated testing on entry to the facility. This requires staffing and supplies in order to conduct testing and those things are a 100% additional cost. Wisconsin Meadows also started an essential worker pay bonus of around $3/hr per employee which costs them nearly $60,000 per month.
Capacity problem
It’s not a supply problem but rather a capacity problem. Higher local consumption has led to higher demand for locally finished cattle but that has had a minor impact on overall pricing so far. On average local beef has gone up much less than most of the national suppliers.
Fair prices
The farmers are still getting a fair price for their cattle and as soon as the costs are no longer passed on to us, and production is allowed to return to normal, prices should return to normal as well.