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.
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.
… 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.