Below is a brief excerpt from a complementary research note written by our Consumer Staples analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more.
The Wall Street Journal had an article about the falling prices of meat at grocery stores yesterday.
Prices for ground beef and pork loins have returned to pre-pandemic levels, as seen in the left-hand chart below. Increased production and falling demand were cited as the reasons behind the lower prices.
The backlog in production due to staffing challenges at slaughterhouses has led to cattle spending more time on feedlots and gaining more weight. The additional time in feedlots has driven the supply of prime-rated beef to twice the five-year average.
We wrote about the drivers behind falling prices of beef and pork at retail two weeks ago. Before the pandemic, more than half of beef consumption took place at foodservice locations.
During the pandemic, meat department sales at retail were up more than 20% until August, as seen in the right-hand chart below.
It will be interesting to see what the impact of increased inventory of fresh meat, as well as lower prices will have on plant-based meat sales.