The Pandemic Exposed Deep Problems in the Meat Industry
We all remember the shortages that defined the early days of coronavirus lockdowns. Retail outlets responded as quickly as possible to shortages of toilet paper, hand sanitizer, and disinfectants. But then the supply chain disruptions hit the meat department of supermarkets everywhere. Consumers encountered empty coolers instead of packages of chicken or steak, and what was available was more expensive. Frustrations mounted.
But customers weren’t the only angry ones; ranchers are also mad. It’s a little counterintuitive—hamburger prices increased from as low as $1.84 a pound to more than $6 a pound—so ranchers’ anger doesn’t make much sense to the average American. Why wouldn’t the producers of hamburgers benefit from high prices for hamburgers?
The answer is complex but important. The market for beef and pork isn’t just one market, but several. It is possible for the market for live cattle ready for slaughter to be in surplus, while the retail market is struggling to satisfy demand. That’s exactly what has happened during the pandemic: At the same time that retail prices spiked, farmers suffered from falling prices for their cattle. The extra money you paid for your ground beef went not to ranchers but to meat packers.