Rising meat prices could stifle barbecue season
Record-high meat prices are having a chilling effect on summergrilling demand in the U.S.
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 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.”
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 U.S. chicken producer reported its highest earnings per share ever as easing worries about the coronavirus contributed to “significantly improved demand from food service 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.
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.
Wall Street breaks 7-week losing streak
Technology companies led a broad rally for stocks Friday as Wall Street notched its best week in 18 months. The gain broke a seven-week losing streak for the market, the longest such stretch since 2001.
The S&P 500 rose 2.5% and finished 6.6% higher for the week, its best weekly gain since November 2020. The Dow Jones Industrial Average rose 1.8% and the tech-heavy Nasdaq gained 3.3%.
The S&P 500 ended 100.40 points higher at 4,158.24. The Nasdaq rose 390.48 points to 12,131.13. It was the third straight gain for both indexes. The Dow rose 575.77 points to 33,212.96, its sixthstraight gain. The Russell 2000 rose 49.66 points, or 2.7%, to 1,887.90.
The broader market has been in a slump for nearly two months as concerns about inflation and rising interest rates pile up. Investors were spooked last week by disappointing reports from key retailers, including Walmart and Target, which stoked fears about rising inflation hitting profit margins and crimping consumer spending.
Trading remained choppy throughout the week, though the market mostly pushed higher, as retailers including Macy's and Dollar General released encouraging earnings reports and financial updates.
Retailers were among the biggest gainers Friday as investors continued reviewing the latest round of earnings to get a better sense of just how much pain rising inflation is inflicting on businesses and consumers.
Beauty products company Ulta Beauty surged 12.5% for the biggest gain in the S&P 500 after raising its profit forecast for the year. Amazon rose 3.7%.
Clothing retailer American Eagle fell 6.6% after reported weak first-quarter earnings.
The yield on the 10-year Treasury, which helps set mortgage rates, slipped to 2.74% from 2.75% late Thursday.