Surging beef prices hard to stomach for US shoppers

Beef prices have soared by as much as 23 per cent. PHOTO: AFP

WASHINGTON (AFP) - Her shopping cart is overflowing with food, but there is no trace of steak.

"Too expensive," said Lisa, a 48-year-old mother, as she left a Giant supermarket in Washington.

In the United States, land of barbecues and steakhouses, beef is becoming a luxury.

Overall consumer prices rose by 7 per cent over the course of 2021, an inflation rate not seen since 1982, and the data for January, due out on Thursday (Feb 10), is expected to show the yearly increase continued.

American shoppers saw prices for meats, poultry, fish and eggs jump 12.5 per cent last year, while beef has soared by as much as 23 per cent, depending on the cut.

On the shelves of the Giant grocery store in the Van Ness neighborhood of Washington, only ground beef remains affordable for Lisa, a mother of three teenagers.

"I buy mostly chicken and sausages. Sometimes ground beef," she said.

Prices for a quality cut of beef can cost up to US$25 a pound (S$34 for 454g).

Professor Jayson Lusk, head of the department of agricultural economics at Purdue University in Indiana, cited "a variety of factors that are combining to push food prices higher".

Consumption has been boosted by high savings rates - swelled by government aid - for Americans largely stuck at home during the pandemic.

"Foreign buyers of US meat, particularly China, have exhibited strong demand alongside strong domestic consumer demand," Prof Lusk said.

At the same time, wages in the meatpacking industry have increased by almost 20 per cent since the start of the pandemic amid a nationwide worker shortage that also has impacted manufacturing and transport, he said.

Tyson Foods, the largest US meat processor, this week justified its price increases by saying it had to offset rising costs for labour to satisfy demand that continues to outstrip its capacity.

Over the last three months of 2021, Tyson raised beef prices by an average of nearly 33 per cent compared with the same period of 2020, while the company's profits far exceeded expectations.

Now with savings dwindling and prices soaring, eating a steak is out of reach for many low-income families.

Concern for Joe Biden

Spiking prices have undermined US President Joe Biden's popularity, and the White House has mobilised to tamp down the increases, including rising beef prices, and rejected the idea that the pandemic is the sole culprit.

The White House calls the meatpacking and processing industry a "textbook case" where lack of competition hurts consumers. In the US$213 billion industry, just four companies control 85 per cent of beef processing and 54 per cent of poultry.

The Biden administration last month launched an investigation into price fixing, along with a plan to try to alleviate the price hikes.

Prices for a quality cut of beef in the US can cost up to US a pound (S for 454g). PHOTO: AFP

In the meantime, restaurants are adapting at the expense of their customers.

"Half of operators we surveyed in January have already reduced their menu size and raised menu prices in response to the challenges they are currently facing," said Mr Sean Jafar of Datassential, which tracks some 5,000 menus representing a wide range of American restaurants.

And more plan to take similar steps.

Americans remain among the biggest consumers of beef in the world. They ate 26.8kg a person last year, up from 26.5kg in 2020.

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