As we enter the summer months and try to find some sense of normalcy after the wild ride that was the spring of 2020, one can’t help but wonder where we go from here, or what the near future will look like. Over the last few weeks, things have certainly seemed a lot more “normal” in Nevada — restaurants and casinos opening back up, despite having limited capacity; some school and sporting events allowed to take place once again; and gatherings of family and friends happening with more regularity.
Yet the impact of COVID-19 does continue to be felt, and will so for a long time. For the Nevada Beef Council, we had to postpone our Stockmanship & Stewardship event planned for mid-August in Elko. After many discussions internally and with our event sponsors, it was determined there is simply too much uncertainty at this time to ensure a successful event held in a safe manner for all participants. While we are all disappointed to have to put this off for the time being, we are looking forward to a fun and successful event in the near future, and hope that many of you will be there.
With how quickly things seem to change these days, I hesitate to even share results and data that will be in print for a couple of months, which lately, seems like a lifetime. But I thought it would be helpful to drill down further into some insight as to where we landed (as of early June) in terms of beef at retail and food service.
From a beef supply issue, the widespread distribution challenges we saw early on during this ordeal seem to have evened out for the most part, but you may continue to see purchase limits in place as the retail sector continues to deal with high demand. With some of the restrictions put in place due to COVID-19 being eased in many parts of the country, and with the popular summer grilling months upon us, our expectation is that we’ll continue to see consumer demand for beef remain strong.
At the retail level, purchase limits remained in place for many popular cuts through May. Prices stayed mostly stable week-over-week but remained up significantly compared with a year ago. Despite the supply pressure, dollar sales grew 18.7% the week of May 31 versus year ago and volume grew 2.8%. Beef easily had the highest absolute dollar gains at more than $97 million.
Meat department sales boasted double-digit growth for 12 weeks running, and year-to-date through May 31 were up 24.4%. This reflects an additional $6 billion sold versus the same time in 2019. Year-to-date volume sales through May 24 were up 16.7% over the same period in 2019, reflecting an additional 1.2 billion pounds of meat and poultry sold versus the same time in 2019.
While demand at the retail level saw all-time highs, the story in the food service sector was the opposite. The restaurant industry lost three decades’ worth of employees in just six weeks as states closed dining rooms and restaurants closed their doors and laid off workers. The global pandemic and state closures of dine-in service cost the restaurant industry 5.9 million jobs, wiping out three decades’ worth of employees in just over six weeks, according to federal data released in May. The industry lost 5.5 million jobs in April, and numbers from March show restaurants lost 500,000 employees, the vast majority of them during the last two weeks of the month.
But there was also some positive news for food service — the restaurant industry brought back 1.37 million workers in May as consumers began eating out again and operators rehired workers furloughed in March and April. Yet the industry remains far below employment levels from before the coronavirus pandemic, suggesting that it could be years before the number of workers lost over that six-week period are fully regained. Despite the increase in restaurant workers in May, total restaurant industry employees are still 37% below February levels, or about 4.4 million workers.
And how are consumers reacting to all of the recent supply challenges? A May survey conducted with 1,000 U.S. consumers found that grocery shoppers say that while they are slightly more concerned about food shortages, they are still relatively confident in the safety of the food supply and are purchasing about the same amount of meat as they did pre-COVID pandemic.
When asked about their top concerns about food shopping, survey respondents ranked the health of grocery store employees (30%), running out of staple, non-food items (29%) and the health of other shoppers (28%) as the top worries. Additionally, 21% of consumers said they are concerned about running out of meat, as well as fresh food (19%) and healthy food (16%).
By the time you read this, it’s unclear what the landscape will look like, exactly. But given the stabilization we’ve seen the last several weeks, one can hope that the roller coaster ride has ended — at least for now.
So as we embrace the warmer months and try to get back to life as we knew it as much as possible, I hope you’ll do what my family and I will be doing a lot of over the next few months – buying our favorite cuts of beef, firing up the grill, and enjoying the taste of summer that you can find in a great steak or burger. Enjoy, and happy eating.
By Jill Scofield, Director of Producer Relations, California & Nevada Beef Council
All data referenced above courtesy of the National Cattlemen’s Beef Association, contractor to the Cattlemen’s Beef Board. Sources available upon request.