CoBank: Meat industry remains strong despite inflation impact
By Ryan McCarthy, Meat+Poultry
DENVER –The increase in foodservice demand during the summer months strengthened certain segments of the meat and poultry industry. However, according to a new report from CoBank, the effect of inflation in the market will test customers’ desire for meat in the fourth quarter.
Inadequate labor availability remains an issue and is reducing productivity throughout the industry, CoBank noted in the report. These issues will result in supply chain challenges well into next year.
“Supply chain snarls are likely to persist well into 2022, and so will elevated inflation,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange division. “The latest producer price index data for August was up 20% year-over-year, while the consumer price index increased just 5.2%. So it’s clear that many businesses are passing only a small portion of those cost increases on to the final consumer. We expect that will change in the months ahead and many businesses will raise prices.”
On a positive note, foreign demand for US protein remains elevated with US exports of beef, pork and chicken on pace to reach record highs this year and represent a 3% increase over 2020.
CoBank stated that the strong consumer demand...