Just a few days ago we marveled as wholesale beef prices had soared over 60% from their February lows to a record $331 per 100 pounds. Well, that was then, because today alone, the wholesale price soared by 8.6% or $32.60 to a new all time high of $410.05, almost doubling in less than a month.
The reason: an unprecedented collapse of the nation's food supply chain as over a dozen meat processing plants have been shuttered due to the coronavirus pandemic.
Beef prices are soaring even after Trump issued an executive order to address meat shortages, however with food workers scared and unwilling to return to work, Trump's attempt to normalize prices has backfired, because all it has achieved was a frantic scramble by consumers to hoard beef resulting in even bigger shortages and higher prices.
Call it a bacon run.
As a result of the wave of panic-shopping at supermarkets, more grocery stores are imposing limits on meat purchases. On Friday, we reported that supermarket chain Kroger said that it has put "purchase limits" on ground beef and fresh pork at some of its stores following growing concerns over meat shortages due to coronavirus-induced supply disruptions. Other large grocers said they expect to be out of stock on different types of cuts soon.
Sure enough, on Monday Costco joined Kroger, announced it was limiting customers to three packages of meat.
Costco has implemented limits on certain items to help ensure more members are able to purchase merchandise they want and need. Our buyers and suppliers are working hard to provide essential, high demand merchandise as well as everyday favorites.
Fresh meat purchases are temporarily limited to a total of 3 items per member among the beef, pork and poultry products.
Most if not all other supermarkets will follow suit in enforcing similar strict purchase limits.
With Trump's EO failing to ease the shortage, and beef supply chains crippled, it is unclear when or how the beef shortage will be resolved, even as prices explode with each passing day, making beef a luxury for America's 30 million suddenly unemployed who don't know when their next paycheck will arrive.
While so far the food crisis is limited to beef and to a lesser extent pork (whose price rose to the highest in 6 years today), how long before all other food supply chains are similarly crippled resulting in the kind of food hyperinflation that sparked the Arab Spring protests and rebellions which culminated with overthrown governments across much of northern Africa and the Middle East?