Beef is more expensive, but who’s profiting?

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.