The cost of meat at America’s butchers continues to rise as the coronavirus pandemic wreaks havoc on supply chains with little relief for consumers in sight.
The Consumer Price Index, used to calculate the overall inflation in the economy, indicates that the inflation rate for 2021 is around 5 percent with rising meat prices being a main contributing factor to the increase.
In a press release by the U.S. Department of Agriculture, strong domestic and international demand, high feed costs and supply chain disruptions due to the ongoing pandemic are all being blamed for soaring meat costs across the United States.
During the period from July 2020 to July 2021 the cost of beef and veal for consumers has increased by 6.5 percent and pork has increased 7.8 percent. Poultry for consumers has experienced a 5.3 percent increase and fish and seafood realized a 6.6 percent increase.
August numbers are indicating that relief from the increases is not coming soon. For the period between August 2020 and August 2021 the cost of beef and veal increased 12.2 percent while eggs and pork were each up close to 10 percent. The cost for bacon alone has increased a whopping 17 percent over the same period.
Storms, an ongoing drought in much of the continental U.S. and a cyberattack in May against meatpacking giant JBS, that temporarily halted operations, are also being blamed for the increases.
The Producer Price Index (PPI), an index that measures the average changes in prices received by domestic producers for their output, rose by 8.3 percent over the past 12 months, according to the U.S Bureau of Labor Statistics.
The increase is the most significant jump since the calculating of the number began more than 10 years ago.
Biden administration takes notice
The increase in prices has attracted the attention of the White House with the Biden administration planning to take a tougher stance on meat packing companies who they say are causing sticker shock at grocery stores.
Four companies control much of the meat processing market in the U.S. and top aides at the White House are blaming these companies for the rising food prices despite indicators otherwise.
The four large producers are Cargill, Tyson Foods Inc. Brazil based JBS and the world’s largest meat packer, National Beef Packing Company.
The Biden administration has pledged to funnel US$1.4 billion in COVID-19 pandemic stimulus money to small meat producers and workers while implementing a “crack down on illegal price fixing.”
Tyson Foods, who produces and sells much of the beef, pork and chicken in the U.S. rejected Biden’s assertion that it is accountable for the rise in costs stating that the pandemic and labor shortages are to blame.
Mark Dopp, chief operating officer for the North American Meat Institute lashed out at the Biden administration stating, “Issuing inflammatory statements that ignore the fundamentals of how supply and demand affects markets accomplishes nothing.”
Bharat Ramamurti, deputy director of the White House’s National Economic Council said in an interview, “We’ve helped sustain this market, and it’s frustrating to see these companies turn around and raise prices,” adding that, “What we see here smacks of pandemic profiteering and that is the behavior the administration finds concerning.”
Rising inflation is a hot topic at the White House as the Biden administration ramps up its efforts to contain the ongoing COVID-19 pandemic while attempting to engineer an economic recovery.
In the face of numerous contributing factors including, drought conditions across much of the U.S., labor shortages and rising production costs a White House driven solution to the problem appears increasingly distant.