Customers have a beef: Virus causing meat shortage

Camden Wyoming Market co-owner Larry Mola stocks a meat case on Saturday. Delaware State News/Marc Clery

CAMDEN — First it was hand sanitizer and toilet paper.

Now COVID-19 has caused another shortage as the supply of meat is dwindling.

This has caused meat prices to skyrocket over the last few months. According to the Bureau of Labor Statistics, the overall cost of meats, poultry, fish and eggs increased by 4.3% in April, the largest hike of any single grocery category.

Many meat processing plants nationally were forced to shut down or slow production due a rise in COVID-19 cases in the plants. It made the supply dip but the demand for meat keeps going up.

“It’s either impulse buying or panic buying,” said Larry Mola, co-owner of Camden Wyoming Market. “Everyone hears there’s going to be a meat shortage, so everyone goes and buys all the meat. It’s like a self-fulfilling prophecy.”

Americans are paying more at the market as the price of groceries rose 2.6% in April, according to the Bureau of Labor Statistics. This was the biggest one-month increase in grocery prices since 1974.

Various types of meat were one of the biggest culprits for the rise in overall prices. Beef saw a 3.7% increase, while pork prices went up 3% and poultry prices increased 4.7%.

Nearly 4,200 meat-packing workers at 115 facilities in 19 states have been infected with COVID-19, according to the Centers for Disease Control.

University of Delaware Professor Brandon McFadden, an applied economist who studies the food system, said some plants have closed their doors entirely while some are at 50 percent capacity due to social distancing regulations.

“That’s obviously a lot of meat not being processed that typically is,” Professor McFadden said. “Right now, there’s no ability to process meat quickly.”

Thanks to the higher prices, some local businesses have received accusations of price gouging. But the increases at the store are in a response to price increases from the suppliers and packers.

Hastings Butcher Shop in Laurel posted on social media it had to raise prices due a price jump from its packers. Meat is now $4-$7 more a pound.

“We aren’t doing this to price gouge anyone,” it said on its Facebook page. “The packers have increased everything on us. We are terribly sorry for this. We didn’t start this fire and hopefully once we get past this, everything will get back to normal.”

Mr. Mola at Camden-Wyoming Market said he hopes the public can recognize how complicated the meat production system is right now, which explains the higher prices.

“For a business to stay afloat in any sort of way they have to raise their prices,” Mr. Mola said. “It’s caused a huge backlash in the public. The public is questioning it, thinking everyone is price-gouging. People are irritated, they’re stressed. Unfortunately with the rise of Amazon, people think everything is produced the same way. They don’t realize it takes hundreds of people a day to produce meat for this country. They don’t see that and quite frankly I don’t think they care because they’re used to clicking and it will be there in three days.”

How long will it last?

As long as COVID-19 is around to require social distancing regulations in the processing and packing plants, the light at the end of the tunnel of the shortage could take a while.

Once the plants can start operating fully again, things will start to get better, Mr. Mola said, but the market will still be high thanks to demand and bulk buying.

“Once the people who actually do the processing can get up and running, that will free up the choke point,” Mr. Mola said. “The market will be higher for some time because the demand is so high. I see people buying four steaks at once, at a very high price and they still want it. You can’t tell the customer, ‘Don’t buy it so the price will go down.’ In the culture we live in, the people want what they want and they want it when they want it.”

Professor McFadden said there could be a prolonged period of high prices for beef and pork.

Chicken on the other hand might not be as affected as much because it does not take as long to produce.

“There are two things working in chicken’s favor,” Professor McFadden said. “One, chicken only takes two months to get to slaughter while pork takes about six months and beef 18 months. You can increase a chicken flock faster than pork or beef. Two, I would expect chicken to do relatively better because it’s more automated when it comes to processing. It won’t get hit as hard.”

Customers line up waiting to enter Camden Wyoming Market on Saturday.

The beef and pork shortage isn’t currently caused by the farms. It’s the lack of workers in the plants.

This could lead to farmers cutting cost by reducing their herd size to save money, since they can’t ship as much product to the plants as they did before. Down the road, that could keep the supply low.

“This probably will continue with beef and pork, especially since the processing capacity for pork went down 60 percent and beef like 65 percent,” Professor McFadden said. “Growers of beef and pork will likely reduce herd size. They have to think about what is happening in the processing facilities, which is out of their hands. Because of that, we’re going to see a prolonged period of higher prices.”

“The demand is still high but the producers can’t produce anything,” Mr. Mola said. “The actual product is not in short supply, it’s the people who process it.”

In the stores

Not only should shoppers expect higher prices at grocery stores, but they could find limits on certain items.

ACME Markets is putting temporary purchase limits on high-demand products. These limits vary by location and will be marked by signage in-store for specific quantity restrictions.

For online orders at ACME, customers are limited to two packages of beef, two packages of chicken, two packages of fresh pork, and two packages of fresh turkey, a total limit of eight fresh meat packages.

Costco is temporarily limiting meat purchases to three items per member, the company announced earlier this month. This includes poultry, beef and pork.

“Costco has implemented limits on certain items to help ensure more members are able to purchase merchandise they want and need,” reads the company statement.

National meat production chains have been hit as well, lowering the supply for grocery stores. John Tyson, chairman of Tyson Foods, posted a blog and took full page ads in several major newspapers warning of upcoming troubles with the supply chain due to COVID-19.
“The food supply chain is vulnerable,” the post read. “As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain. … In addition to meat shortages, this is a serious food waste issue. Farmers across the nation simply will not have anywhere to sell their livestock to be processed, when they could have fed the nation. Millions of animals — chickens, pigs and cattle — will be depopulated because of the closure of our processing facilities. The food supply chain is breaking.”

Still, for the national stores like Food Lion and Walmart, they can afford to sell meat at a break-even margin or even at a loss because it makes up less than 10 percent of their profit margin, says Mr. Mola.

It’s the local butcher shops and meat markets who are currently under the most stress.

“It’s hard on us,” Mr. Mola said. “We’re all grateful for working but in no way is it a free meal ticket. We got people working very hard and it’s twice as stressful. I’ve got a great staff, I really do, and this has put them in a difficult situation because people are getting neurotic and have accused us of making up the rules.

“We’re extremely grateful to have a lot of people coming in but nothing is free,” he added. “The best way to handle it is to roll with the punches and stay off social media. We’re just trying to make everybody happy.”

Advice for consumers

For those looking to get the most bang for their buck, Professor McFadden said consumers should do their research while they shop.
“Check out all your local options, different stores, roadside stands or farmer markets,” Professor McFadden said. “Increase your search a little wider than it has been.”

Mr. Mola has reminded his customers the poultry market has about stabilized in Delaware. Camden-Wyoming Market also sells a lot of seafood, which is not in short supply, so he’s directed numerous customers in that direction if they are looking to save money.

If prices continue to rise, Mr. Mola also preaches self-responsibility because panic-buying he says, will just increase costs more.
“The best advice I can give someone is to shop normally for what you need,” Mr. Mola said. “Ask a lot of questions and look at the prices. You don’t have to ration yourself, just buy what you need. That will keep things as calm as it can.

“You can’t stop buying meat and you can’t hoard meat, just be normal. Don’t all of a sudden double everything you’re eating because you’re afraid next week it won’t be there. If everyone doesn’t overreact and has a little self-responsibility, it will make things a lot easier.”

Helpful Coronavirus links

Delaware Division of Health Coronavirus Page
CDC: About the Coronavirus Disease 2019
CDC: What to do if You Are Sick
Johns Hopkins Coronavirus Resource Center
AP News Coronavirus Coverage
Reopening Delaware: Resources for Businesses
Delaware Phase 2 guidance

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