In this file:

 

·         Pork’s New Position During COVID-19

·         Pandemic Results in Record Farm-to-Retail Pork Price Spread

 

 

Pork’s New Position During COVID-19

 

David Newman, Arkansas State University

via FarmJournal's Pork - September 4, 2020

 

The COVID-19 pandemic has presented significant challenges for the meat industry, quite possibly changing the dynamics forever. Processing disruption, the foodservice quandary, and consumer behavior will all be analyzed as the proteins work to find a home on plates.

 

Recently the National Pork Board released some very interesting statistics on consumer behavior during COVID-19. The data, collected by numerous resources, is part of the new master brand strategy known as “Real Pork” released by the National Pork Checkoff. Real Pork is an effort to position pork and the pork industry better to consumers and to highlight the authentic flavors that pork presents to all consumers. As a meat scientist and a pork producer, I am excited about this new brand strategy and think it addresses many of the positive meat messages that we try to promote every day.

 

It has an especially catchy name considering that “pre-COVID” we spent a considerable amount of time and effort addressing the nationwide craze over alternative meats. Consider this:

 

•    During COVID 69% of households are now making more than 80% of their meals at home.

Consumers are craving more meal options from all segments of the food industry, which presents new opportunities for the meat industry to tap into consumer eating experiences away from foodservice.

 

•    During COVID 31% prioritize something comforting when cooking at home and 58% say eating at home with family is important to them.

Could this present an educational opportunity for youth? Could this change the trend of eating out and pre-processed/pre-cooked foods moving forward?

 

•    49% of shoppers say their biggest challenge is either new ideas or lack of inspiration to cook.

Again, big opportunities here for lesser known cuts of meat and creative ideas. There are numerous cuts that we (the meat industry) have not exposed our consumers to, creating numerous new opportunities!

 

•    73% of carnivores and 63% of omnivores agree: real meat is the best source of protein.

 

•    38% of consumers want to know about the farm their meat came from...

 

more

https://www.porkbusiness.com/article/porks-new-position-during-covid-19

 

 

Pandemic Results in Record Farm-to-Retail Pork Price Spread

 

Source: American Farm Bureau Federation (AFBF) 

September 4, 2020

 

AFBF'S Market Intel series has examined the impact that COVID-19 has had on livestock, beef and pork markets over the course of the pandemic. Food production was significantly disrupted, especially at livestock processing facilities, where labor shortages and worker protection measures slowed throughput at plants around the country and even caused some facilities to temporarily shut down. As a result, there was a sharp increase in the wholesale value of beef and pork that coincided with a rapid decline in the value of live animals, creating a record “live-to-cutout-spread,” which is the difference between the price that is paid for the live animal and the wholesale price of the processed animal product.

 

During this disruption, one area that has received less attention is the spread between the price of beef and pork leaving the processing sector and the price that consumers pay at the grocery store. Part of the reason for this is the time lag between when prices are paid and when data becomes available for analysis. However, we now have several months’ worth of data to examine and piece together a picture of the impact of COVID-19 on meat price spreads.

 

The Data

 

USDA’s Economic Research Service compiles monthly average values and the differences among those values at the farm, wholesale and retail stages of the production and marketing chain for selected cuts of beef and pork. Retail prices are from the Bureau of Labor Statistics’ Consumer Price Index. Wholesale and farm prices are from USDA's Agricultural Marketing Service. Conversion factors developed by ERS are used to convert retail weight to a carcass-weight equivalent. ERS calculates its price spreads on a per-pound-of-retail-product basis. It takes 2.40 pounds of the standard steer to produce a pound of retail beef and 1.14 pounds of wholesale beef to produce a pound of retail beef. For hogs, the conversion factors are 1.869 pounds of hog per pound of retail cuts and 1.04 pounds of wholesale cuts per pound of retail cuts. The gross farm values in the price spread tables are the farm price of live animals multiplied by the farm-to-retail conversion factor. The wholesale values are the average price of the animal's wholesale meat cuts times the wholesale-retail conversion factor. High price spreads can often lead to frustration at various sectors of the supply chain, from disgruntled producers experiencing declining shares to angry consumers facing higher prices at the meat case. Increasing price spreads can inflate retail prices and deflate farm prices.

  

Pork

 

The pork complex experienced a similar spike to beef, albeit at a lower magnitude. Figure 3 shows three spreads: the farm-to-wholesale spread, as denoted by the red bars, the wholesale-to-retail spread, as denoted by the blue bars, and the farm-to-retail spread, the combination of the red and blue bars. COVID-19 resulted in record levels for all three price spreads for pork since the data was first collected 50 years ago. The pork farm-to-retail price spread peaked in June at $3.65/lb retail weight equivalent. Also peaking in June was the wholesale-to-retail spread, at $2.84/lb retail weight equivalent. However, the farm-to-wholesale spread peaked in May at $1.19/lb retail weight equivalent.

 

Farmer’s Share

 

The data also gives us the ability to calculate the producer’s share of the overall retail dollar. Figure 4 shows us the producer’s share of the retail dollar over the last 20 years for both beef and pork. Since 2000, the producer’s share of the beef retail dollar has averaged 47%, while the producer’s share for pork has averaged 27%. However, the value of both animal proteins has been trending downward over the last several years, dragging the average producer’s share down to 42% over the last three years for beef and 21% over the last three years for pork. Of course, this decline started before COVID-19, but the pandemic has exacerbated this issue, resulting in record lows for producer’s shares of the retail dollars. At 31%, beef producers experienced a record monthly low in June. Pork did not experience an absolute record low, but at 14%, it was near the record low of 12.3% (experienced in December of 1998) and is certainly the lowest in the last 20 years.

 

While looking at the producer’s share of the retail dollar is a helpful exercise in examining trends and even the impacts of recent events, nuance and context are warranted when citing this variable’s impact. For instance, this is the producer’s share of the retail dollar and does not include consumer expenditures in the “food away from home” channel, such as food purchased in restaurants.  Additionally, these numbers and any calculations derived from this ERS dataset are simple average retail prices, not volume-adjusted retail prices, a more telling data point. These numbers also do not include the impact of features and promotions, so they miss the actual retail price paid by consumers, which is lower than the publicly available prices used in the producer-share calculations.

 

more, including charts [5]

https://www.fb.org/market-intel/pandemic-results-in-record-farm-to-retail-price-spreads-in-beef-and-pork