Why Do Meat Prices Fluctuate?
Understanding the factors behind the rises (and occasional price drops!).
Meat, known as the world’s most popular source of protein, is often perceived as a luxury dietary option. The prices of meat products can fluctuate significantly, influenced by a range of factors that shape the global meat market. Understanding these dynamics is crucial for consumers, producers, and policymakers alike. In this article, we will explore the various factors that contribute to the rise and fall of meat prices, shedding light on recent trends and their implications for the Trinidadian marketplace.
Global Price Trends
According to the UN’s Food and Agriculture Organization, global lamb and beef prices experienced a decline towards the end of 2022 but have been steadily rising since the beginning of 2023. While they have not yet reached the all-time highs observed last year, the upward trajectory of meat costs contrasts with the downward trend in non-meat food prices during the same period. The poultry industry, in particular, has been severely affected, grappling with bird-flu pandemics that forced breeders out of business and increased the cost of health management in surviving flocks.
Production Cycles and Demand-Supply Mismatch
The production of meat operates on long cycles, varying from months for the likes of chicken, to up to three to four years for beef. This means that sudden increases in demand cannot be easily met by producers, resulting in significant price jumps. Even during periods of stable demand, when supplies are low, dealers must outbid each other to secure supply, further driving up prices.
When demand and supply are more balanced, producers and processes can make good efficiency improvements and offer better prices. However, it isn’t long before the balance is tipped, and the meat industry scrambles to adjust. Maybe it means finding new regions of supply, arranging different transport routes, etc.
Dependency on Animal Feed
The cost of animal feed, largely dependent on grain prices, plays a critical role in meat production. Increases in fertilizer costs directly affect grain prices, leading to higher expenses for animal feed. The global increase in both fertilizer and grain prices, triggered by factors like Russia’s full-scale invasion of Ukraine, has had a knock-on effect on the cost of meat production. Although these input costs have now started to recede, the repercussions continue to affect meat prices.
Transportation and Storage Costs
Transportation and storage expenses, including fuel and energy for freezer units, impact meat prices. During periods of reduced demand, suppliers may need to quickly sell off meat to prevent rising energy bills and product spoilage. Conversely, when demand surges, the costs of transportation and storage can contribute to higher meat prices.
Pork Industry Challenges
The largest European pig farmers have been grappling with the repercussions of the Covid-19 pandemic and the subsequent shutdown of many pork processors. These disruptions caused lost production and missed breeding programs, creating challenges for the pork industry as it works towards recovery. The lingering effects of these challenges are still impacting prices globally, however, at Westco Foods we’re doing all we can to bring you the best value pork.
Meat prices fluctuate due to a multitude of factors that influence the global meat market. Supply and demand dynamics, production cycles, feed costs, energy prices, government policies, currency exchange rates, and seasonal demand variations such as Christmas all play a role in shaping meat prices. Understanding these factors and their interplay is essential for consumers and those in the hospitality trade. By staying informed about the drivers behind price fluctuations, buyers can make more informed decisions regarding meat consumption and adapt to changing market conditions.
Westco Foods put a lot of effort into sourcing quality meats at affordable prices. Wherever we can, we pass on the savings we make to our valued customers.
You can get the best up-to-date price on meat products by adding your product to the quote list and submitting online. You’re welcome to contact our sales reps for advice on getting the best meat deals currently available.