Pandemic wreaks havoc on market predictability


U.S. animal slaughtering and processing production (including poultry) during the three months through September was up 2.0 percent from one year ago. Though quarterly production is accelerating, foodservice and export demand remains hindered by the pandemic. Quarterly retail sales for foodservice and drinking places were down 16.4 percent for the third quarter, indicating the foodservice industry is still greatly affected by the pandemic. Quarterly U.S. exports of meat were down 13.0 percent in August, signaling demand outside the U.S. has not fully returned.


With relatively diminished demand from foodservice and abroad, rising production is placing downside pressure on consumer prices relative to a June peak, which occurred due to a surge in retail demand. Monthly consumer prices for beef and chicken were down 13.6 percent and 11.7 percent, respectively, from June to September, but were still above pre-pandemic levels. Difficult-to-predict consumer demand will create challenges for producers in the coming quarters. Retail demand for meat will likely remain high relative to pre-pandemic levels, until COVID-related safety concerns regarding eating out are assuaged.


U.S. retail sales at food and beverage stores during the third quarter were up 10.7 percent relative to the same quarter of 2019; the pace of growth is declining but still abnormally strong. There may be greater near-term opportunities tied to retail frozen beef and poultry products; grocery stores have started preparing for consumers to begin stockpiling goods as cases of COVID-19 spike across the country with the onset of colder weather.


Source : provisioneronline.com