How the Beef Industry Is Managing Pricing During the Pandemic
As COVID-19 escalated in 2020, packing plant shutdowns led to temporary meat shortages and price volatility. A new boxed beef index aims to bridge the gap between producer and consumer. The move could help the long-term success of the beef industry.
Bruce Blythe for CME Group
via TheStreet - Apr 7, 2021
The coronavirus pandemic sparked a boom for meat retailers like Brett Joseph. With steakhouses and other restaurants shuttered much of last year, Americans snapped up steaks, burgers, ribs, and other cuts to grill and serve at home. Sales at Josephís store, Wheaton Meat Co., soared 50% in 2020, he said, prompting Joseph to hire more workers and extend store hours to keep pace with demand.
Thatís not to say 2020 was a walk in the park, Joseph said. Retailers, feedlot owners, and others in the industry endured turbulence in the marketplace as COVID-19 outbreaks caused slaughterhouse shutdowns, supply disruptions, and volatility in cattle and beef prices. Often, it was a struggle to gauge just where beef prices should be and how to communicate that to customers, Joseph said.
Beef prices would change abruptly, ďand you donít really have an explanation for the customer,Ē said Joseph, whose store is in Wheaton, Illinois, a Chicago suburb. ďPrices were going up and down much faster than usual. We had to make adjustments on the fly. If you didnít adjust, you might lose business.Ē
Joseph, like others in the beef industry, watches the U.S. Department of Agricultureís daily boxed-beef price report, a long-standing wholesale benchmark. But he and others in the beef industry agreed that the boxed beef price by itself isnít always efficient for ascertaining market conditions or direction, and itís time for an update.
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