Rising Grocery and Meat Prices: the Impact of COVID-19 on U.S. Food and Beverage Industry

Resilience360, a leader in supply chain risk management solutions, released a report that reveals that the meat industry could face $20 billion in losses due to COVID-19 related disruptions. The meat industry has been severely impacted by the infections of more than 20,000 workers, as well as a decreased demand for meat at schools and restaurants during COVID-19 government shutdowns. A number of meat production plants have closed, causing increased wholesale prices and decreased livestock prices, and the industry will most likely see long-term challenges due to disruptions caused by the pandemic.

The Resilience360 report also shows that COVID-related disruptions have led to temporary food shortages, increased grocery prices and limited selections in supermarkets. In fact, grocery prices increased a shocking 2.6 percent in April, which is the biggest one-month increase since 1974. And meat prices increased even more: chicken prices by 5.8 percent, processed meat by 5.7 percent, beef by 3.3 percent and pork by 3.0 percent.

“The United States domestic food supply chain showed resilience during the worst of the pandemic in the second quarter, but the long-term effects remain to be seen,” Shehrina Kamal, Product Director, Risk Monitoring, for Resilience360. “We could see a future disruption of food supply chains if we have a second wave of COVID-19 infections.”

The report also shares the following facts and statistics:

● Major food manufacturers, including meat packaging and processing plants, stopped their operations in recent weeks because of a large number of employees with COVID-19 infections.
● Meat packaging and processing plants were closed for about 11 days on average, and the plants most impacted by the COVID-19 disruptions are in leading meat processing states like Illinois, Indiana, Iowa, Minnesota and Pennsylvania.
● Meat processing and meat exports play a strong role in the United States economy. Pork exports continued to increase with demand from China in March and increased exports to Canada, Mexico and Japan.
● The beverage sector was also impacted by the COVID-19 pandemic, seeing limited availability and increased CO2 prices, but the easing lockdown restrictions will likely lead to increased CO2 supplies and a decrease in prices.

For a complete list of all of Resilience360’s COVID-19 supply chain research, please visit https://www.resilience360.dhl.com/coronavirus-supply-chain-resources/.

Resilience360 predicts, monitors, and mitigates disruptions both man-made and natural, including hurricanes, cyberattacks, labor strikes, protests, and a rapidly changing regulatory environment.