Flashback: It’s February 2020. You’re at a dine-in restaurant, surrounded by family and friends. The biggest decision you have to make: what cut of beef do I want.
Cut to the COVID-19 facts: By April, your options would have been limited.
Beef has been in short supply during this pandemic and while you’d think that would boost prices, the market has been tricky to assess.
Like all meat proteins, beef supply chains continue to pivot product to food retail businesses when possible. But the damage has already been done to food service dependent cuts. Compared to a year ago, prices aren’t pretty:
- Beef Tenderloins: -25.6%
- Sirloin Top Butt: -18.4%
- Brisket: -13.9%
And on the supply side, feedlots are still playing catch up. Carcass weights are slowly edging down, a sign of reducing animal backlog to plants after shut downs. Estimates point to supply getting current in Q1 2021.
But brace yourself…
Winter is coming: The food service outlook is bleak as cases race to new records and outdoor dining will grind to a halt in northern states. Toss in macroeconomic concerns and any resurfacing supply chain disruptions, and uncertainty will continue to be the name of the game.
+ While we’re here: Cattle associations and legislators are playing tug-of-war with market reform. After extreme volatility in 2020, price discovery rules and transparency mandates are in-play to even the playing field between meatpackers and feeders/producers. More to come here.