Pandemic Injects Volatility into Cattle and Beef Markets
Last Updated on Apr 9, 2020 at 1:33pm | Agribusiness
The self-distancing and quarantine protocols put in place to slow the spread of COVID-19 have reduced economic growth, shuttered consumers in their homes, and changed the way Americans purchase and consume food. A slowing economy is bad for all of the animal proteins, but beef -- typically the highest priced of the proteins and considered a luxury product in economic terms – stands to suffer the most when consumers spend less in response to wage cuts and job losses.
Additionally, beef is used more heavily in the food service channel than pork. We already know that consumers will be shifting more of their food dollars to at-home spending as opposed to eating out (a one-two punch to food service in the form of greatly reduced demand caused by the recessionary pressures and social distancing efforts practiced by consumers).
This shift by consumers, combined with panic buying as families stock up on supplies, is sending shockwaves through the American food, meat, and beef supply chain.