American consumers eagerly purchased retail meats throughout the coronavirus pandemic through August. Signs are beginning to emerge, however, retail meat sales may slow and that could add to price pressure on cattle and hogs.
Beef and pork production has largely recovered from last spring’s disruption to slaughter plants, and retailers have responded by slowly increasing the number of features they run in their weekly printed or web advertisements and by lowering the average price of product featured.
“This is critical in order to keep the flow of product moving this fall,” according to Len Steiner in The Daily Livestock Report. “It is also important as there are signs consumer buying behavior is starting to shift. At the start of the pandemic, consumers rushed to stock up their freezers, afraid of the unknown. Fear of the unknown and willingness to spend has been replaced by income uncertainty.”
That uncertainty is driven by the fact the U.S. Congress and the White House remain at odds over a second round of stimulus payments and/or an increase in unemployment benefits. Ahead of the Labor Day weekend, Steiner says retailers appear to be adjusting their marketing strategies. Citing USDA data on ground beef features and feature prices at retail, Steiner said for the week ending Aug. 28, the ground beef feature index remains below a year ago but near levels found in March, prior to the coronavirus lockdowns.
Calling the ground beef feature price somewhat mixed, Steiner said last week the weighted average feature price was up 9% from a year ago. However, the price of 80-89% ground beef was about the same as last year and the average price of ground sirloin was down 10% from a year ago. Ground beef patty prices were only 2% higher.
“Retailers appear to be featuring significantly more round cuts, which is reflected in the improvement of round beef prices at wholesale,” Steiner said. “Round beef cut features last week were up 89% from a year ago and the average feature price was down 2% compared to last year. Top sirloin steak was the most featured item and the average price was 13% lower than last year.”
Pork feature activity has also improved the last few weeks but remains below levels seen the same week a year ago.
“However, pork features are almost double what they were after the Memorial Day weekend,” Steiner said. “As was the case with beef, pork feature prices are now lower than a year ago. Loins are a ubiquitous item in the retail meat case. Overall loin features for the week ending August 28 were 17% lower than last year. The weighted average feature price for the week was also 15% lower than last year, a significant change compared to June when feature prices were up by more than 35% from last year.”
USDA data show backrib features down 76% from last year while their feature price is 53% higher. However, the feature price of assorted bone-in pork chops was down 34% from last year and features were up 53%. Sliced bacon features remain limited, down 64% from last year and prices were up 4%.
“Despite plentiful and inexpensive bellies, it appears processors are bumping up against processing capacity or labor issues,” Steiner said.