Rising costs of labor, transportation, and grain are hitting many meat companies hard, and that will hit Americans hard at the grocery store.
Tyson Foods says higher costs have led them to raise prices on all of their products, the company saying the higher prices will continue into 2022.
The Wall Street Journal reports the Arkansas-based meat giant lifted prices across all of its major divisions. The spike is quite clear for the quarter that just ended Oct. 2, when compared with prices at this time last year. For the latest quarter, Tyson's beef prices are up by nearly one-third, pork prices by 38%, and chicken by 19%.
The company said it's because it has had to pay more for everything from ingredients to packaging materials.
"I can't think of a single thing that has either stayed the same or gone down," said Donnie King, Tyson's chief executive, on a Monday conference call with reporters.
But the Biden administration is blaming rising prices on the consolidation of the meat industry as a whole. Back in September, the White House commented on the rising meat prices, saying it would take "bold action to enforce the antitrust laws, boost competition in meat-processing, and push back on pandemic profiteering that is hurting consumers, farmers, and ranchers across the country."
In a blog post, White House officials wrote, "Four large conglomerates overwhelmingly control meat supply chains, driving down earnings for farmers while driving up prices for consumers. Today, just four firms control approximately 55-85% of the market for these three products, according to U.S. Department of Agriculture data."
Perfect Storm of Problems
But there are also other factors at play. For example, The Consumer Price Index (CPI) released by USDA Economic Research Service (ERS), rose at a higher rate than expected, up 6.2 percent since last October. That's the highest in more than 30 years.
"Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions, and high feed and other input costs," the report said. "Winter storms and drought-impacted meat prices this spring, and processing facility closures due to cybersecurity attacks impacted beef and other meat production in May."
The ERS report said there are several factors driving the increase in meat prices, not just consolidation in the meat industry. However, "Consolidation in the meat industry could also have an effect on prices," the report stated.
One agricultural economist says bacon prices are one of the biggest sticker shock items at the grocery store.
“We've certainly seen very strong increases in retail meat prices year over year. One big category is bacon. If you look back at the start of the pandemic compared to now, bacon prices are between 30% and 40% higher today than they were then,” Jayson Lusk, agricultural economist with Purdue University told Farm Journal late last month.
This Year's Thanksgiving Dinner Could be Most Expensive Ever
As CBN News reported, due to the rising inflation, the traditional Thanksgiving dinner of turkey and all of the fixings will also cost Americans more this year.
Turkey will by far be the most expensive element, largely due to the price of corn, which is what most commercial turkeys are fed.
Whole frozen turkeys between eight and 16 pounds already cost 25 cents a pound more than they did in 2020, according to a report released by the Department of Agriculture.
Packaged dinner rolls will cost more because the price of many ingredients used by commercial bakers has gone up. Canned cranberry sauce is also more expensive this year given that domestic steel plants are still trying to get caught up from shutdowns due to the pandemic.
Trey Malone, an agricultural economist at Michigan State University, says Americans will certainly see the price difference this harvest holiday.
"I can buy that this will be the most expensive Thanksgiving ever, but there's an income-inequality story here that matters a lot," Malone said. "The rich are going to be spending more on Thanksgiving than they have ever spent before, but not everyone is going to be able to do that."