Soaring beef prices-Lima News

Beef prices have risen by as much as 30% since the pandemic began, and Raleigh Dennis is in the red.

“It’s an indignation,” Dennis said after a recent grocery sale.

Atlanta retirees said they liked the lovely beef fillets on the table.

Inflation is pushing up consumer goods prices almost entirely, with coronavirus shutdowns and other fallouts accused of lacking everything from wood to computer chips. Supermarkets are another place where pandemics have been surprised by Americans.

Since 2019, Chuck Roast has increased by nearly 29% to $ 6.80 per pound. Ground beef is currently at $ 4.68 per pound, up nearly 23%. According to the Department of Agriculture, $ 10.59 per pound of sirloin steak is up 30%.

Beef prices are rising so rapidly that even Congress is wondering why. We hold public hearings and promise to legislate transparency. The industry says market power is pushing prices up, but ranchers, retailers and consumers are skeptical in the face of record profit margins from meat packers.

The North American Meat Institute, an industry group, has been priced as COVID-19 hit meat packers at new costs, including providing employees with personal protective equipment and readjusting factories with protective shields. The document states that it has risen. The slowdown or closure of slaughterhouses due to illness reduced production, and the pandemic also added costs to transportation due to a shortage of truck drivers.

At the same time, demand from US and overseas buyers is increasing. And, like the Georgia chicken processing plant, beef stuffers are forced to pay higher wages to hire workers.

Andy Gottshchalk of Hedgers Edge said prices are rising due to an unusual market.

“They have become beneficiaries of record margins without their own genius,” he told the Atlanta Journal-Constitution.

The four largest beef packers, Tyson Foods, Cargill, JBS and National Beef Packing, dominate 80% of the market. Since the spring of 2020, Hedgers Edge has estimated that they have earned $ 1,000 for each cow turned into a cut box. In recent months it has been in the range of $ 300 to $ 400. However, it was below $ 200 for most of 2018.

Financial information for JBS, National Beef and Cargill was not available according to a third-quarter document filed with the US Securities and Exchange Commission, but Tyson reported operating profit for the first nine months of 2021 in 2020. It reported that it was $ 2.4 billion higher than the same period. Commission. Beef sales boosted it, he said.

But rising prices don’t mean that cowherds like Cleeve Jackson, who live in Floyd County, Georgia, are making more. His price for live cows hasn’t fluctuated more than one or two dimes from $ 1.40 per pound he earned at a recent auction.

According to the University of Georgia’s 2021 calculations, beef is Georgia’s fourth most profitable produce, bringing ranchers $ 661 million. Only broilers, cotton and wood are more profitable.

The beef industry is one of the most integrated segments of agriculture. Most Georgian cattle are shipped to the Midwest to feed more for fattening. Feedlots raise them to slaughter weight before selling them primarily to the four major meat packaging plants in the Midwest. The integration has its advantages, but it also has its disadvantages.

Wendium Sawadgo, an assistant professor and farm expansion economist at Auburn University, said consumers will benefit from the integration of meat packers to help keep production costs down.

“But processors have market power, so we can’t pass on all the reduced costs to consumers,” he said.

Some of the disadvantages have caused price fluctuations in the country. A fire in August 2019 closed the Tyson plant, which produces 6% of all US beef, for a month. Last June, JBS was hit by a ransomware attack and had to temporarily shut down its factory. This was 20% of US beef processing, contributing to the shortage.

According to Sawadgo, a shortage means higher prices.

That play between shortages and prices has attracted the attention of ranchers and lawyers for retailers.

Fred Gretsch, who runs Gretsch Brothers Angus in Oglethorpe County, Georgia, near Athens, said: He is concerned that they may have the power to dictate rather than follow the power of the market.

“When the fire broke out, they were able to do two things,” Gretsch said. The slowdown in production meant cattle waiting for slaughter to recover, creating excess cattle prices.

“They were able to push the price of beef on the market for end users and push back the men who feed them, the feed yard and the producers of beef calves,” he said. ..

Price-fixing proceedings in Minnesota and Illinois allege that meat packers’ production slows during periods of high demand. Meat packers have denied that claim.

The White House and Congressmen are also watching what’s happening at the price. Agricultural and judicial committees hold hearings calling for transparency in pricing and how the structure of large corporations deals with ranchers and feedlot owners. Legislators are discussing deregulating small-scale or rural slaughterhouses and providing start-up or expansion subsidies to intensify competition.

The White House also said President Joe Biden’s administration “enforces antitrust laws, promotes competition in meat processing, and boosts pandemic profits that are hurting consumers, farmers and ranchers across the country.” The statement was released on September 8.

The North American Meat Research Institute has accused COVID-19 and called on government officials to stop the industry’s scapegoat.

Despite rising prices, people are still buying beef and meat demand and prices are expected to remain stable until at least 2022.

Jackson is looking at it in the long run. He has a full-time job in selling pharmacies, so he doesn’t rely on cows to achieve his goals. He wants to keep doing that and at least make enough to pay for the farm road.

“I’m a third generation farmer. Hopefully there will be a fourth generation behind us,” he said.

Cleeve Jackson stands near his cow on September 24, 2021 at his cave spring ranch.

Consumers see red, meat packers see green

Soaring beef prices-Lima News

Source link Soaring beef prices-Lima News

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