The American meat shortage is pushing prices to unprecedented heights — here's how it could affect your grocery bill
- Fresh meat prices were up 8.1% at the end of April, as the coronavirus pandemic causes serious issues in the American supply chain.
- Pork and beef prices could increase by an unprecedented 20% in the coming months, according to a new report from CoBank.
- With pork and beef production plunging by 35%, CoBank economist Will Sawyer says shortages and price inflation are "nearly assured."
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Fresh meat prices escalated 8.1% in stores, compared to the same period last year, according to Nielsen data for the week ending April 25.
Experts expect prices to skyrocket in the coming weeks, as meat processing plants across the US are forced to close due to the coronavirus pandemic. Pork and beef prices could increase by as much as 20% compared to 2019, according to a new report from CoBank, a cooperative bank that is part of the Farm Credit System.
A 20% increase would be an unprecedented price hike, according to Will Sawyer, CoBank's lead animal protein economist. Pork prices have only experienced inflation of more than 10% twice in the last 20 years; neither time did inflation grow to 20%.
Pork and beef production has plunged by roughly 35% compared to this time last year, according to the CoBank report. As a result, Sawyer says, grocery stores running out of products and price inflation are "nearly assured."
Some 115 meat and poultry processing plants have reported COVID-19 cases, according to a report from the Centers for Disease Control and Prevention released last week. There have been 4,913 confirmed COVID-19 cases and 20 deaths among workers, as experts say meat processing plants are becoming the next hotspot for the pandemic.
A number of massive meat processing plants have been forced to shut down due to COVID-19 cases or operate at a limited capacity, as concerned employees refuse to come to work and new social distancing policies roll out. In an effort to combat shortages, President Trump recently signed an executive order demanding that meat processing plants stay open.
With slaughterhouses shutting down, farmers have been forced to kill pigs and destroy inventory instead of selling at a loss. Hog farmers are expected to euthanize seven million pigs in the second quarter alone, according to CoBank's report.
Killing animals and destroying products will only make future price hikes and food shortages worse. Sawyer says that the hogs and cattle being euthanized now means that supply shortages will become worse later this year, with reduced grocery store supplies in May and June.
"As communities reopen with only about one week of meat supply in cold storage, shortages and stock outs in the meat case couldn't come at a worse time," Sawyer writes in the report. "Food inflation and a weak US economy is a combination that will leave many consumers in greater financial strain."
Grocery chains including Kroger and Costco have already started limiting how much meat customers can buy. Fast-food chains say they're closely monitoring the situation, with Wendy's running out of burgers and limiting its menu at roughly 18% of locations.
If you or your business has been impacted by meat shortages, reach out to retail@businessinsider.com.
SEE ALSO: Experts say meat processing plants are the next coronavirus hotspots in America, as Trump orders slaughterhouses to stay open
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