Breaking News

Experts say rising demand and shortage of workers are pushing meat prices up


June 10 – Eating out means bigger bites in customer wallets than a year ago, as does eating in.

The United Nations reports that world food prices have climbed 40% year over year. The organization’s food price index has seen increases for 12 consecutive months, with the 4.8% increase from April to May being the largest to date.

According to the US Department of Agriculture, the latest consumer price index available for food shows that the cost of restaurant meals in April 2021 was 3.8% higher than in April 2020. The increase was lower for meals at home: up 1.2% over the same period. .

Many factors come into play as the U.S. economy opens up and demand for protein skyrockets, said Geoff Schneider, presidential professor and co-chair of economics at Bucknell University.

Labor shortages disrupted the supply chain, first when workers in meat packing plants and elsewhere contracted COVID-19 and again when meat processors and production facilities farm workers are struggling to hire enough staff. Schneider highlighted the immigration restrictions, saying it shrinks the labor pool.

“People don’t seem to realize how much American food production depends on immigrant labor. Americans don’t seem to want to do farm work, but with restricted immigration the result is a labor shortage. ‘work in American food production, which raises food prices, “Schneider said.

Climate change and changing weather conditions have disrupted agricultural production, reducing the supply of fruits and vegetables, grains and livestock. This increases the cost of feeding farm animals and increases the cost of the animals themselves, Schneider said.

Rising energy prices increase the costs of production, harvesting and transportation, with that increase being passed on to consumers, he said.

Restaurant owners facing rising costs Alex Skotedis, general manager, Skeeter’s Pit BBQ, Shamokin Dam, said rising costs have forced his restaurant – and he’s certainly not the only one – to increase menu prices.

“The cost of our wings has doubled over the past year,” Skotedis said of Skeeter’s wholesale chicken purchases. “We had to get that through and readjust our selling prices. People were pretty understanding. We’re selling a good product.”

It’s not just wings. Skotedis said. The wholesale price of baby back ribs is on the rise, and sourcing products like Heinz chili sauce and some take-out containers is remarkably more difficult than before the pandemic, he said.

Poy Premjai, owner of Siam Restaurant & Bar, Lewisburg, said menu prices have increased to reflect the rising cost of chicken breasts and shrimp as well as imported ingredients like curry paste, coconut milk and the herbs.

“Even the price of cooking oil and containers has gone up,” Premjai said.

Bob Hare, managing director of Americus Hose Co., in Sunbury, said the Americus sold five cases of wings every week last year. Now they’re reduced to half a case as the menu price for a dozen wings has dropped from $ 7 to $ 12.

“We were selling so much of it so fast,” Hare said. “Everything else is still going strong, just the wings have stopped.”

Larry Winans, co-owner of Jackass Brewing Company, Lewisburg, said he’s been through three different beef vendors in the past year. The cost jumped 40% with just one supplier, he said. With another, the product just wasn’t as good.

“Now with the third the costs are still high but at least we get the quality we want,” Winans said.

Of course, supply chain issues aren’t limited to food. Winans said finding certain grains and ingredients for the craft brewing operation means more lead time and planning, as it does with cooking supplies.

“For the regular consumer, it’s unnoticeable at this point. If it continues, it’s going to be noticeable,” Winans said.

Grocers: No Supply Issues Another factor is the recent cyberattack on JBS SA, the world’s largest meat company. This took the company’s factories across the United States offline for several days before production was restored, according to media reports.

Dennis Curtin, director of public relations, Weis Markets, said the grocer is “in daily contact with our suppliers and does not expect any disruption. If that changes, we will adjust as we did last spring. when factories closed due to COVID. “

“And, yes, chicken wings are in particular demand,” Curtin said.

Ashley Flower, public relations manager, The GIANT Company, did not respond directly to questions about potential changes in consumer habits and pricing issues. However, Flower said GIANT does not expect any impact on meat supplies.

Processing and Packaging Scott Sechler is the owner of Bell & Evans in Lebanon County. It is billed as the oldest branded chicken company in the United States. The company is building a third processing plant to meet the demand for chicken products.

Sechler quote

From Sechler’s perspective, supply shortages are due, in part, to growing demand for chicken exports. It is easier and cheaper to package and ship whole chickens than to process and separate chicken products for retail packaging.

“There are still as many chickens as there ever were,” Sechler said. “I don’t know if the demand (nationally) is higher than it was last year. There is a shortage because there are fewer people cutting chickens.”

Labor shortages have also had an impact on beef and pork processing, said David Hartman, a livestock specialist based in Lycoming County with the Penn State Extension.

Schneider, Professor Bucknell, suggested people look for alternatives in the local farm-to-customer market. Hartman agreed it was a possibility, but small farms have their own issues with slaughter capacity for processing.

There are a limited number of small livestock processing plants and the turnaround time has gone from a month or two to a full year, Hartman said.

“It’s kind of a gray area. They often have a hard time finding workers. They can’t find people to stay or can’t find people to hire to start,” Hartman said.

Tanner Beymer, director of government affairs and market regulatory policy, National Cattlemen’s Beef Association, said there was no shortage of livestock.

“The problem is, we don’t have the capacity in the packaging business,” Beymer said.

“The main thing that packers are struggling with right now is the workforce,” he continued, specifically citing unemployment benefits that keep potential workers out of the labor pool.

Even if the packing capacity reached 100 percent, Beymer said, the industry could accommodate an additional 5,600 cattle for processing each day.

Leave a Reply