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.