One of the biggest economic casualties of the COVID-19 pandemics has been the price increase of beef at the checkout lines.
Consumers have seen prices skyrocket on beef prices in recent weeks.
One local grocery store owner said it’s really a simple explanation.
“It’s all just supply and demand,” Garvin’s Cashsaver owner Robert Garvin said. “They closed down a lot of beef plants and the ones that are working are only working at partial capacity. There are plenty of cattle out there but there is no one to process it.”
In an online report in the magazine Politico, Ed Greiman, general manager of Upper Iowa Beef who formerly headed the Iowa Cattlemen’s Association, attributed the consumer price increase to plants running at lower capacity.
At the same time, farmers and ranchers desperate to offload their cattle as they reach optimal weight for slaughter are cutting prices so they won’t have to kill the animals without selling them.
“I’m running at half speed,” Greiman said at an event hosted by the Nebraska Cattlemen’s Association. “Cattle are backing up because we can’t run our plants fast enough. Nothing is functioning properly. We need to be careful not to put blame on any one thing or part of the industry because we can’t get these plants going.”
Garvin said the price swings in beef are very temporary because they are a perishable item.
“The prices have already started to come down,” Garvin said. “Again, it’s all supply and demand economics. They run the price up and people stop buying the beef. They can’t hold onto it because it’s perishable. If they can’t move the beef, they will drop the prices. That’s why you have seen some great prices on some beef products. Right now, there’s an oversupply of certain steaks. Once the supply builds back up, the prices will come down.”
The Politco article also mentioned that the Department of Justice is investigating the volatile prices of beef. The Department of Justice is looking at the four largest U.S. meatpackers — Tyson Foods, JBS, National Beef and Cargill — which collectively control about 85 percent of the U.S. market for the slaughter and packaging of beef. The USDA is also investigating the beef price fluctuations, Agriculture Secretary Sonny Perdue has confirmed.
Garvin said it’s his understanding that the virus hit the beef processing plants very hard.
“I have seen those processing plants and they are working right on top of each other,” Garvin said. “So it’s easy to see why they got hit so hard. Now you see them and there aren’t nearly as many workers and they are separated and have shields in between them. They are in production but there aren’t as many workers. It’s just a matter of time. It’s all about to get back to normal pretty quick.”
Garvin also said he is seeing less items on allocation from his warehouse and more and more items returning to the shelves.
“There are still some things that are short but the warehouse is telling us things will be back to normal by July,” Garvin said. “There may be some things that are short. The warehouse has done a really good job of keeping us informed about what’s going on.”
