Wednesday, May 27, 2020

Huzzah! The Meat Shortage Has Ended (now there's a lack of demand)

From Bloomberg, May 21:

US meat squeeze eases on plant revival, slack in demand 
The squeeze on U.S. meat is easing. Wholesale prices are falling as slaughterhouses recover from Covid-19 related shutdowns and traders brace for lower demand than usual over the Memorial Day holiday.

Enough workers returned to American slaughterhouses that pork and beef plants through Wednesday were operating at 85% and 81%, respectively, of year-ago levels. That’s a rebound from late in April, when production of each meat fell by more than 30%.

While the uptick means more product will be available to grocers, the pandemic remains an issue for the unofficial start of summer grilling season with limitations on group gatherings still intact.
“It’s prime time for grilling and social events and you’re not seeing the meat features that you typically do,” Don Roose, president of U.S. Commodities in Iowa, said by phone. “So it’s disappointing from a demand standpoint.”

Wholesale beef prices have declined six straight days, dropping 15% from a record of $475.39, the biggest such drop since 2011, U.S. Department of Agriculture data showed Wednesday.
Pork prices climbed for the first time in four days but are still 18% below a five-year high of $121.66 per 100 pounds. Tuesday’s decline of 9% was the largest drop since 2017.
Grocers, weeks ago, facing smaller supplies and higher prices for red-meat started hawking other proteins including turkey, seafood and plant-based meat while consumers also pushed back against higher prices. “We’re looking at sticker shock,” Roose said....

I always appreciate when chartmeisters supply arrows for we, the directionally challenged.
On the other hand I was a bit leery about the "U.S. Meat Squeeze" headline.

If interested here are some of our posts on strange Bloomberg headlines.