Beef prices linger as meat plants begin to reopen: WSJ

Yahoo Finance’s Heidi Chung joins Yahoo Finance’s Zack Guzman to discuss how meat plans are moving to reopen but prices stay high as grocery executives say consumers will have few options for months.

Video Transcript

ZACK GUZMAN: Meantime, we're digging into the way that meat prices have soared in the wake of the coronavirus pandemic. As plants reopen, we have seen prices come back down, but not necessarily returning to normal levels we saw before the pandemic hit here in the US. And for more on that, I want to get to Yahoo Finance's Heidi Chung with more details. Heidi?

HEIDI CHUNG: Hey, Zack. Yeah, some good news and some concerning news when it comes to US meat producers. As we've talked about over the past couple of months, there have been a lot of challenges facing the big meat producing companies, like Tyson and Sanderson Farms, just amid the COVID-19 outbreak. Now, while it's not quite an all clear for the industry just yet, it might have turned a corner here, Zack. According to the US Department of Agriculture's report, there was a sharp decline in production of beef and pork from March to April, but the good news here is that production is up from those steep declines in April.

Now, for some perspective, looking at some recent data that Nielsen provided to Yahoo Finance, fresh meat sales in the US rose 24% in the week ending May 23rd compared to the same period last year, and average unit price of fresh meat is up about 16%. Beef sales are up nearly 25%, and average unit price is up nearly 22% year over year. Chicken sales up 19%, with average unit price up 15.5%, and pork sales surging 27%, and average unit price increased to 17% in the week ending May 23rd compared to last year.

Now, prices and sales remain elevated here for the meat category, and the meat industry still faces some challenges and some tests in the coming weeks. First, people aren't quite panic buying anymore like they were at the end of March and April, but restaurants are slowly starting to reopen their dining rooms, and that means the uptick in meat purchases could potentially put some more pressure on the meat supply in the US.

And second, meat production plants are still not operating at pre-COVID levels. Tyson announced just a few days ago that it would be temporarily halting operation at its pork facility in Storm Lake, Iowa. So still a lot of challenges ahead, but some little good news coming out of this industry over the past couple of weeks, Zack.

ZACK GUZMAN: Yeah, and also interesting note that it hasn't necessarily been the case that we've seen meat [INAUDIBLE] all across the board. Chicken breast still maintaining its place as kind of America's staple here, when we think about how prices there have been relatively less-- I guess they move less to the supply issues that we've seen here. [INAUDIBLE] just one of those things a little bit easier to process [INAUDIBLE] smaller chicken. But Heidi Chung, appreciate you bringing us the update on the meat front, as always.