DENVER, CO – Meat and poultry prices began the year fairly low, but by mid-May wholesale prices hit record highs as foodservice and retail grocery pipelines were primed for post-COVID summer celebrations.
Although prices have since eased a bit, economists with CoBank expect another round of aggressive buying with foodservice and institutional buyers loading up for September’s expected full return to schools and offices, followed quickly by expected holiday celebrations.
Foodservice sales regained pre-COVID levels in April (reaching an all-time monthly high of $75.3 billion) with overall retail grocery stores sales growth showing strength. Sales improved 7.3 percent from a year ago and are 15.3 percent higher than in 2019, which provides evidence of long-term change in consumer behavior.
With cash in the bank, job offers in hand, a new cookbook collection, and fancy cooking gear bought during the pandemic, the middle- and upper-classes are spending more on food at home and willing to pay for higher-end meat cuts.
From farm to supermarket, labor availability remains the biggest concern and continues to be a significant impediment to quick supply-side responses.
April job openings quickly surpassed 9 million after topping 8 million for the first time ever during March. Meanwhile, labor force participation has only marginally recovered
from its pandemic lows.
While worker availability should improve by September, when schools reopen and all enhanced unemployment benefits expire, CoBank projects that the labor market will still remain incredibly tight.
(SOURCE: All Ag News)