Overall inflation is around 6.2% higher now than it was a year ago, but a certain sector has been unevenly tipping the scales upwards — meat.
Meat prices have significantly contributed to the overall increase in inflation this year, according to Consumer Price Index data. Prices for beef are up a whopping 20.1%, while pork is up 14.1% and chicken is up 9%.
What’s more, the prices for bacon have gone up an astounding 20% in the past 12 months and are now 50% higher than 10 years ago.
The classic supply-demand issues that plagued international supply chains throughout 2021 were felt quite more intensely in the meat industry, which was hit particularly hard by the pandemic as they were deemed essential workers and could not shut down. Additionally, the meat industry in the United States is a very “consolidated” market, meaning that very few control the majority of the supply and distribution.
More than 80% of beef in the U.S. is sold by just four companies. With pork, it’s 66%. “Big Meat,” as it is sometimes referred to, was slow to instill protective measures against COVID-19 and became a hotspot for infections. Some plants shut down entirely or had to temporarily shut down. Adding to the strain, meatpacking plants were hit by cybersecurity attacks as recently as June, halting U.S. meat production for entire days at a time. A ransomware attack in one of the big four meat plants, JBS, put over a quarter of the nation’s beef supply on hold for almost a week.
With plants shut down and distribution overall disrupted, a backlog of animals began to grow, which resulted in millions of pigs being euthanized without processing into food. Producers wary of getting ahead of demand with too much supply also started reducing the size of their breeding herds, ultimately depressing this year’s pork supply, reports CNN. Pork production is expected to decrease into 2020 since, according to the USDA, in September there were 4% fewer pigs and hogs on farms.
The combination of these problems, along with more people eating at home, drove prices up.
However, consumers are expected to begin skipping those higher-priced goods, says IRI President of Strategic Analytics KK Davey, according to Winsight Grocery Business.
“People are going to begin to trade down as prices increase,” Davey said, noting that pricier items like bacon and premium pet food are being left on shelves.
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