It’s been a record high for chicken prices lately in grocery stores across the United States. Consumers looking to save money on pricey beef and pork have opted to buy more chicken, tightening the supply chain, and making the demand higher.
So what’s driving the change? According to the U.S. Department of Agriculture U.S. consumption of chicken is projected to reach 100 pounds per person for the first time ever. Due to the pandemic, companies like Tyson have made drastic production reductions which has further made the supply of chicken tighter and higher in demand.
At the same time, U.S. consumers are consuming less beef and pork than before. Data from the USDA shows beef consumption in the U.S. is forecast to drop to its lowest since 2018, while Pork consumption is at its lowest since 2015 all thanks to Bidenflation. This means more customers are buying chicken than ever before, and the supply just isn’t there to fill the demand.
Data shows this move in consumer preference has translated to retail prices for whole fresh chickens and bone-in legs reaching nominal records. Wholesale prices for chicken have also rebounded and one index shows chicken producer profit margins at their highest in a year.
Tyson CEO Donnie King said in February that executives overestimated how strong consumer demand would be for chicken in late 2022, leaving the company to resell excess inventories at a discount.
But for some reason companies are dialing back production, scaling eggs in incubators and chicks for meat production down from a year earlier.
Right now, Tyson, Pilgrim’s Pride, and other major producers are in a good spot as the holiday season approaches. As for customers, they’re paying more in the short-term for chicken, but if prices creep too high, it could start to impact demand.
If people are buying chicken because they can’t afford beef or pork, what happens when they struggle to purchase chicken? Also, beef prices are about to go through the roof why are they ramping down production of chicken?
We are headed to a food crisis if our leaders don’t get on the ball.