As inflation eats away at more and more of consumers’ purchasing power at the grocery store, Americans may now be forced to give up their love of steaks and burgers for more affordable food, according to a report from Bloomberg.
Citing data from agri-business risk management and market research firm HedgersEdge, LLC, Bloomberg predicts that demand for what it now refers to as “luxury meat” is waning as shoppers are repeatedly stunned by sticker shock in the wake of market instability following Russia’s invasion of Ukraine.
Meat processors such as Tyson Foods Inc. and JBS USA saw their profits fall on Tuesday to $102.45 per head of cattle slaughtered — levels not seen since before the COVID-19 pandemic began more than two years ago. Amid slaughterhouse closures due to coronavirus outbreaks, margins topped $1,000, drawing claims that the meat companies were profiting off the crisis.
Beef margins recently hit lowest levels since before the Covid-19 outbreak in March of 2020 https://t.co/PDWh5lqYXu
— Michael Hirtzer (@mhirtz) March 9, 2022
Now, however, prices are jumping in every sector. Last week, the price of wheat surged to a new record, raising the price of feed, which adds to the price of maintaining the herds. And the surge in oil prices means getting the cattle from the field to the slaughterhouse to the stores and, finally, to the dinner table is going to cost more, forcing many farmers and consumers to make some difficult choices.
“Elevated feed prices will prompt livestock farmers to scale back herds, hitting profits for slaughterhouses,” Bloomberg reports.
It remains to be seen if the average American will have to make changes to their diets, or if they will find other ways to cut back.
“On the demand side, the concern is discretionary spending,” said Don Roose, president of Iowa-based U.S. Commodities Inc. “Will consumers look to cheaper proteins or will they skip proteins?”
Meanwhile, New York Attorney General Letitia James is looking into whether or not major corporations are “using the pandemic and inflation as an excuse to unfairly raise the price of basic goods.”
In a statement released March 4, James announced a new rulemaking process aimed at implementing “new price gouging rules that will crack down on pandemic profiteering and corporate greed.”
According to the press release, beef prices have gone up 30 percent, while meatpackers have enjoyed an average increase in profits of 120 percent since the start of the pandemic.
Beef prices rose 30 percent, while meatpackers have been celebrating an average of 120 percent increase in profits.
The cost of Proctor and Gamble diapers, toothpaste, detergent, and tampons has risen throughout the pandemic while P&G has boasted record-breaking profits.
— Zephyr Teachout (@ZephyrTeachout) March 4, 2022
Under New York law, “unconscionably excessive” prices are banned.
“The rising costs of essentials and basic household items has had a real impact on working families,” AG James said. “Throughout the pandemic, hardworking New Yorkers have been struggling to make ends meet, but big corporations have been celebrating record-breaking profits.”
“It doesn’t add up,” James continued. “My office is prepared to use every tool in our toolbox to crack down on price gouging and pandemic profiteering.”
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