STEINAUER, Neb.—It would be hard for Americans to miss that taking the family out for a steak dinner has become more and more of a luxury.
Wholesale price of beef was up some 40 percent in May, compared to the average in 2019, according to U.S. Department of Agriculture (USDA) data. Supermarkets and restauranteurs have partly absorbed the price increase and partly passed it on to customers.
Curiously, however, there seems to be neither a shortage of beef, nor a drop in demand. In fact, ranchers have so much cattle, they struggle to get it off their hands and meat packers, it appears, are running near capacity.
The unusual result is that small farmers struggle for survival even as packers haul in blockbuster profits.
The situation is tied to the CCP (Chinese Communist Party) virus pandemic and the government response to it. The initial outbreaks and lockdown measures disrupted beef processing capacity, creating a cattle glut that the industry still hasn’t cleared.
In addition, many Americans, shored up by unemployment and stimulus payments, are not too eager to pick up jobs. Meanwhile, trillions of dollars injected into the American economy are gradually being spent, bidding up prices of the products most in demand.
Finally, beef exports to China and other markets jumped in recent months, at least partially due to Argentina’s 30-day beef export ban instituted in mid-May to stymie soaring domestic beef prices.
Facing disappointing cattle prices and increasing feed prices, many American farmers have increasingly focused on alternative channels to get their beef to customers. They would team up with local meat lockers and offer the whole animal directly to consumers. Some even launched a project to build their own meat packing facility.
A March-April survey by Beef Checkoff, a marketing and research industry group, indicated that Americans plan to barbecue this year even more than in 2020, when the pandemic lockdowns forced people to stay home, prompting a massive grilling season.
With both prices and demand this strong, farmers are looking hard for ways to bypass the packers and market straight to consumers. That’s where local butchers and meat lockers come in.
BY PETR SVAB
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