Demand for beef is up and suppliers are struggling to meet it. Since March, wholesale beef prices have increased 40%-70% depending on the cut, causing prices to also surge at restaurants and grocery stores, per The New York Times.
Grocers have responded by increasing beef prices by ~5%-9%. Some restaurants are slightly bumping up prices or 86-ing beef dishes entirely for fear of alienating customers.
But restaurants, grocery stores, and cattle ranchers aren’t seeing those profits. Rather, the meatpackers are.
In the US, there are 4 meatpacking conglomerates
Known as the Big 4, Cargill, JBS, Tyson Foods, and National Beef control 80%+ of the country’s processed meat market.
Typically, JBS or Cargill might make ~$50 per head, rarely up to $150, per analysts at RaboResearch. These days, they’re pulling in as much as $1k per head.
Cargill is on track to hit its most profitable year ever, profiting $4.3B in the first 9 months of its fiscal year, per Bloomberg.
While there are many factors that can affect beef prices…
… including the weather and labor shortages, some are accusing the Big 4 meatpackers of manipulating the supply — which they’ve denied.
The Senate Committee on Agriculture, Nutrition, and Forestry discussed consumer cattle prices on Wednesday.
“There is clearly a need for greater transparency and competition in the marketplace,” committee chairwoman Sen. Debbie Stabenow said, noting that the committee is not done with the issue.
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