Meat prices staying high as Missouri plants shut down

COLUMBA, Mo. (KMIZ)

The USDA is reporting losses in the meat industry, as high costs and low demand are impacting production. Meanwhile, consumers are still facing high prices at the grocery store.

Smithfield Foods, the world's largest pork producer, is closing 35 hog farms in Missouri in October. Locations include sites in Newtown, Lucerne and Princeton, Missouri. According to jobs.mo.gov, the closings are expected to affect 92 employees.

This comes just one day after Tyson Foods announced it is closing four chicken plants, including two in Missouri, located in Dexter and Noel.

The U.S. Department of Agriculture's July Outlook reports losses in the pork industry began in November 2022. Because of this, pork production is expected to fall in 2024. This is likely due to high feed costs and weak consumer demand, which the USDA said has led to losses of $32 per pig.

University of Missouri livestock economist, Scott Brown, said the demand for meat right now is not necessarily weak, but rather slowing after the industry is coming off of very strong years in 2021 and 2022.

He said pork demand has slowed considerably this year, as people have stopped spending stimulus money and are facing higher interest rates, causing consumers to think twice before purchasing more meat.

"Pork, in particular, probably some of the most negative returns that we've seen in decades," Brown said.

He said poultry is facing a slowing demand, as well. It's because of this and high production and processing costs that Brown thinks Tyson Foods and Smithfield Foods are trying to make changes.

"I think these companies are looking at the places where they can become more efficient," Brown said. "So, we're going to look for places for them to cut costs."

In a statement about the closings, a Tyson Foods spokesperson said, "This was a difficult decision, but necessary to improve performance and demonstrate our commitment to taking bold actions to improve our business moving forward.” 

Brown said he does not expect Missouri consumers to see any effects from the closures.

According to the Bureau of Labor Statistics, the price of bacon has dropped 15.9% from June 2022 to June 2023 from $7.40 to $6.22 per pound. The price of boneless chicken breasts decreased 8.2% in that same timeframe from $4.57 to $4.19 per pound.

The USDA reports pork retail prices are expected to remain high for the rest of 2023 and into 2024, as production has declined 4.3% this year and is expected to fall 8.5% in 2024. It also states wholesale poultry prices fell each week in June and into the beginning of July. Prices for the rest of the year are adjusted down by 2 cents.

Meanwhile, Brown said beef prices are at record highs. He said the high meat prices are being caused by the ongoing drought, high price of feed and a labor shortage.

The Bureau of Labor Statistics reports the price of ground beef has gone up 2.8% since June 2022 from $4.89 to $5.03 per pound.

Brown expects the price of beef to continue to rise in the coming months.

"We have the smallest beef cow herd that we've had in roughly 60 years now, I believe is what the data tells us," Brown said.

Brown said a good corn crop this fall could help lower feed prices, and therefore take some pressure off producers and consumers.