US Beef Packers Margins Approach Record High As Demand Soars Ahead Of Labor Day

US Beef Packers Margins Approach Record High As Demand Soars Ahead Of Labor Day

US live cattle prices in all regions are $128 per head Tuesday, but meat packer margins are somewhere out in orbit and continue to climb in the greatest squeeze since the beginning of the COVID-19 pandemic. 

Demand for beef is skyrocketing ahead of labor day. Bloomberg compiled ag data via HedgersEdge that showed increasing beef demand is pushing meat-packer margins to near the $1,000 per head mark last seen in May 2020 when the virus pandemic squeezed food supply chains. 

Bloomberg said, “restaurant reopenings, Labor Day grilling and more tourism around the world are boosting prices for the red meat. But with cattle prices lagging the eye-popping gains in meat, the profits that packers like Tyson Foods Inc. are making could bring more scrutiny in Washington for an industry that critics say is too concentrated.” 

With meatpackers, such as Tyson Foods raising its fiscal 2021 revenue forecast on strong beef demand, these companies are making hand over fist while raising retail prices. 

Tyson’s CEO Donnie King recently told investors that cost pressures would force the company to raise meat prices in the next two weeks. 

The notable trend within the food supply chain is that COVID disruptions continue to linger. Food prices have gone through the roof, and megacorporations like Tyson are handsomely profiting from market imbalances. 

No consumer is looking forward to this fall when supermarket prices are expected to spike even further. Perhaps, Labor Day cookouts will be the most expensive ever. 

Tyler Durden
Thu, 08/26/2021 – 09:53

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