With inflation on the rise, Americans may have to abandon beef products like steak and even hamburgers based on the profit margins of beef packers.
Tyson Foods Inc. and JBS USA are now making the least amount of money in more than two years per head of cattle slaughtered, Bloomberg News reported, referring to beef as a “luxury meat.”
How many times have you gone to McDonald’s and thought you were purchasing luxury items?
As consumers tend to spend more on grocery items when the stock market is strong, combined with the soaring price of beef, the demand for these products is currently low.
“On the demand side, the concern is discretionary spending,” U.S. Commodities Inc. brokerage President Don Roose, said. “Will consumers look to cheaper proteins or will they skip proteins?”
Estimated profit margins for beef packers fell to $102.45 per head Tuesday. That’s the around the lowest since before the coronavirus pandemic began early in 2020. During the outbreak, workers inside slaughterhouses caught the virus and forced plants to close, limiting the amount of beef available and sending prices soaring to record highs. Packer margins peaked at $1,009.30 per head in May 2020, adding to criticism of pandemic profiteering by meat companies.
The balance is starting to shift as the war is also raising prices for grains — including wheat hitting a record. Elevated feed prices will prompt livestock farmers to scale back herds, hitting profits for slaughterhouses.
Normally people would move to chicken and turkey as a protein choice when the price of beef is too high, but a new bird flu pandemic has the poultry industry on the brink of raising its prices too, The New York Times reported.
“It’s very concerning given how quickly this thing is accelerating,” Pittsburgh biochemist Henry Niman, who has been tracking the spread of the virus, said. “I think we could see historic levels of infections.”
“It’s important to note that avian influenza is not considered to be a risk to public health and it’s not a food-safety risk,” Department of Agriculture’s Animal and Plant Health Inspection Service spokesman Mike Stepien said.
Public health veterinarian and former Kansas state epidemiologist Dr. Gail Hansen said that influenza viruses have been what has historically caused pandemics among humans.
“Scientists always assumed the next pandemic would be a respiratory influenza,” the doctor said. “We were wrong with Covid, but it’s these kinds of viruses that keep us awake at night.”
At the moment turkey farmers, especially those in Indiana and Kentucky, are most worried. Over the past two weeks, several farms in those states have been shuttered after officials discovered the virus among birds that spend their entire lives crammed into massive sheds. Farmers say they have been stunned by how efficiently the virus kills, with animals dying hours after the initial infection.
In Indiana, state officials have moved quickly, euthanizing more than 100,000 birds and throwing a six-mile cordon around affected farms — a containment area within which exports are halted and birds are tested daily.