That’s not Kobe beef at your grocery store

Have you noticed your grocery bill lately? If you’re like most people it’s 1520% or more per month! While many food staples are rising in cost, meat prices in particular have caught the attention of many consumers. As they walk through the meat department at the grocery store, they might think they are buying the delicacy KobeBeefbecauseofthehigh prices! In an attempt to figure out the cause of the rising meat prices, I spoke to a small-town farmer, Zachary Zimmerman, owner of Zimmerman Livestock in New York, to gain some insight.

What started the price increases for meat?

It seems almost everything can be blamed on the COVID-19 shutdowns. For the meat industry, slaughter houses were closed for a period of time or at least not running at 100% capacity from April to September 2020.

When cattle are born, a clock starts on when they need to be slaughtered or the meat will not be good. During the shutdown, there was nowhere to go with the cattle that reached their processing date. Farmers were forced to sell off the cattle at auctions, often at a loss, and sometimes poultry among others had to be disposed of in mass because there was nowhere to get them processed. This was the first link in the chain to higher prices.

QWhat’s to blame for the lack of slaughterhouses to handle the demand?

ASlaughterhouses have an extreme amount of regulation. It seems next to impossible for someone to enter the industry because of the red tape and costs to get started and to keep up with the regulations. This has created a monopoly for “The Big 3” (Tyson, JBS and Cargill) on the East Coast. Two are located in Pennsylvania. These slaughterhouses control the beginning phase of the meat processing industry. When they shut down or reduced production it reduced the supply of meat and prices began to soar.

Why are prices still high after they reopened?

Just like anyone else, you have to make a living to provide for your family. When farmers had nowhere to sell their cattle they converted fields they used for cattle to graze and planted crops instead. Again, with the supply chain slowed, grain, corn and other crop prices were up so farmers used it as an opportunity to earn enough to pay their bills.

Farmers who stayed the course and continued raising cattle struggled. The high grain prices compounded the financial hardship because the cost to feed the cattle rose dramatically. Corn increased from $4-5 a bushel to $7. Soy almost doubled from about $8 to $15. This high inflation impacted not only the farmers, but trickled down to consumers in the checkout line of the grocery store.

What’s next?

The challenge now is with so many farmers growing crops instead of raising cattle it’s difficult to find cattle to raise and move down the processing line. In other words, the processing and transportation side of the chain might be back up and running, but there is a limited amount of cattle to move down the line. It’s basic supply and demand.

As far as farmers are concerned, it seems small farms are all but done or at least in a dramatic decline. It is almost impossible to compete with the large competitors out there. They own the production line and can run the little guy out of business simply on price.

According to Zachary, we are at a tipping point where, “Consumers need to decide what they value most, quality or price. As a small-town farmer, I can tell you the whole life story of the meat you are about to eat and guarantee its quality. The big guy, not so much. I encourage you to support your local farmers market, buy fresh eggs from the side of the road and consider the quality of food you consume. The price might be cheaper at the big box store, but it might cost you more down the road in medical bills.”

Meat prices might be high, but it’s worth considering cutting back on cable, eating out or the weekly trip to the movies for quality food and better health. If you are interested in quality meat and supporting local farmers, contact Zimmerman Livestock at 484-663-4856. They deliver to Berks, Lancaster and surrounding areas.

Ryan Daniels is a financial coach/advisor. He is a U.S. Army Veteran who enjoys continuing to serve, “Supporting communities by building financially strong families.” Visit his website at www.RFinances.com.