Meat sales see big gains as grilling season heats up

The past two months have not seen a week that clearly reflects just everyday demand for meat and poultry. The week ending May 17 could have come close, however, tight supply and purchase limits along with the reopening of restaurant dine-in facilities in many states altered the demand landscape yet again.

Compared with the same week in 2019, the week of May 17 showed continued double-digit volume/dollar gaps for beef and pork, but for others dollars and volume started to track closer together, including chicken, turkey, lamb and exotic meats (IRI).
Compared with the same week in 2019, the week of May 17 showed continued double-digit volume/dollar gaps for beef and pork, but for others dollars and volume started to track closer together, including chicken, turkey, lamb and exotic meats (IRI).

The past two months have not seen a week that clearly reflects just everyday demand for meat and poultry. The week ending May 17 could have come close, however, tight supply and purchase limits along with the reopening of restaurant dine-in facilities in many states altered the demand landscape yet again.

In point of sale data, the gap between volume and dollar sales remained 13 percentage points for the week ending May 17 — signaling continued pressure on pricing due to tightness in the supply chain. Compared with the same week in 2019, the week of May 17 showed continued double-digit volume/dollar gaps for beef and pork, but for others dollars and volume started to track closer together, including chicken, turkey, lamb and exotic meats. Several processed items, including sausage and frankfurters continued to show double-digit volume/dollar gaps also.

“Most beef and pork products are in tight supply given ongoing plant challenges, whereas chicken and turkey volumes are adequate-to-oversupplied,” said Christine McCracken, Executive Director Food & Agribusiness for Rabobank. “We saw inventories of grilling items build in front of Memorial Day, whereas the slow ramp up in foodservice has set a floor on chicken prices.”

Despite the supply pressure, dollar sales grew 26.3% the week of May 17 versus year ago and volume grew 13.0%. The volume/dollar gap remained unchanged at 13 percentage points.

Year-to-date through May 17, meat department dollar sales were up 24.8%, boasting double-digit growth for ten weeks running. This reflects an additional $5.5 billion sold versus the same time period in 2019. Year-to-date volume sales through May 17 were up 18.0% over the same period in 2019, reflecting an additional 7.6 billion pounds of meat and poultry sold versus the same time period in 2019. IRI found that along with sales, meat’s presence in social media was extremely strong. Mentions of meat and related terms were up 66% versus pre-pandemic.

But supply is likely to continue to impact the dollar and volume performance in weeks to come.

“Beef and pork facilities continue to struggle, with cattle slaughter off 14% from year-ago levels and hog plants down 8% from the same period. The huge backlog of animals created during the downturn is only getting larger, which should limit price increases in coming weeks. The situation in poultry is a little worse this week, with growing numbers of plants experiencing COVID-19-related disruption in the Southeast and production dropping 1% from the prior week,” said McCracken.

“Grilling items gained support in front of the Memorial Day weekend, with grinds the clear winner. Chicken did not fare as well, with the ramp up in foodservice demand still the primary demand driver for most items and much of the early loading now complete. We expect to see chicken prices strengthen in the coming weeks, however, as we begin to see the impact of 7% production cuts taken earlier this spring. Higher prices are also impacting export demand, where we saw a sharp drop in shipments and some cancellations in the latest week. Softer exports may not translate into significantly lower pricing, however, as cuts heading into these markets are not commonly found on our store shelves.”

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