By Michael Hirtzer | Bloomberg
Record-high meat prices are having a chilling effect on summer-grilling demand in the US.
With costs for ground beef and chicken breasts at all-time highs, consumers have few alternatives to switch to different proteins — so some may skip them entirely.
The US Memorial Day holiday on Monday is considered the unofficial opening of the outdoor grilling season, and the surging costs are pointing to a disappointing start.
Price pain in meat comes after Russia’s invasion of Ukraine stalled crop exports in the Black Sea, pushing up the costs of animal feed. Even prices for propane used to power grills have soared.
“The inflationary environment is starting to take its toll,” said Michael Nepveux, senior analyst for animal protein at Stable USA, which offers risk-management tools for some commodities. ‘Instead of steak or chicken, we might have pasta or a pizza.’
Dining out will cost you, too
A resurgence in restaurant dining has prices for chicken rising faster than production costs, driving Sanderson Farms Inc. shares to a record high.
The third-biggest US chicken producer reported its highest earnings per share ever as easing worries about the coronavirus contributed to “significantly improved demand from foodservice customers,” the company said in a securities filing.
The company is being acquired by Cargill Inc. and Continental Grain Co., which is expected to be completed in the first half of this year.
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Sanderson said the average selling price for its chicken was about 34% higher than a year ago while costs for feed were up just 14%.
“This strong demand for chicken has coincided with constraints on the supply side,” it said.
The highly consolidated meat sector has been criticized by politicians in Washington for turning big profits even as consumers pay higher prices and farmers complain about missing out.
The Biden administration on Thursday unveiled a proposed rule that would overhaul chicken farming by forcing meat producers to disclose information on how pay is determined for the contract growers who raise the birds.