US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

After the Spike in the Spring, Meat Prices Are Falling

Meat prices at the grocery went up a lot in the 2nd quarter of 2020. They were driven by factors such as

  • grocery hoarding as consumers stocked up (including home freezers) for stay-at-home orders
  • supply chain challenges as grocery sales were way up, but commercial and institutional sales fell hard as schools and restaurants closed
  • meat processing companies closed facilities as COVID outbreaks took hold

So what’s behind the change now?

  • Consumer grocery shopping habits have leveled off as the initial panic has died down and some are now eating through their freezer stocks.
  • Meat processors are operating as usual, even with coronavirus safety measures in place.
  • Exports are down, as consumers are eating at home and tightening budgets leading to reduced meat consumption.
  • Supplies of live animals are up as cattle and hogs that did not go to slaughter as scheduled in the spring simply got fatter and a backlog remains, even though the fattier beef would otherwise generate higher prices.

As a result:

  • Farmers still struggle to make money on their live animals to be sold for meat.
  • Processors have a glut of supply, even as they worry about a return of the virus and additional shortages.
  • Packaged food companies that use meat (e.g., canned soups, frozen dinners) are starting to rebuild their supplies stocks while remaining concerned about additional future disruptions.
  • Consumers are seeing discounts on meat at grocery stores after seeing limits on purchase amounts in the spring. Those who might have sampled meat-free or plant-forward options when prices were high are migrating back toward more affordable meats.

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food industry analysis, including packaging industry titles such as Meat, Poultry & Seafood Packaging and Molded Pulp Packaging.

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage