— This is the script of CNBC's news report for China's CCTV on September 21, 2020, Monday.
According to the U.S. Department of Agriculture and Nielsen, the current price of major meat varieties in the United States
Has been down from earlier in the year. Some products, including chicken wings and steaks, are even cheaper than that before the outbreak.
B&R Stores Inc, a supermarket chain in Midwest, restricted purchases in the spring but now is on sale, according to the Wall Street Journal. Gordon Food Service Inc., one of the restaurant's biggest distributors, is selling some beef with 50% off, that is half of the price of several months ago.
The fall in prices is partly due to supply, as the closure of slaughterhouses and processing plants in April and May this year severely affected the ability to process meat in the United States, creating a shortage of supply.
Now, meat production has restored. According to USDA, the current level is far beyond that of the same period last year.
Also because of the earlier closure of these slaughterhouses and processing plants, many animals are kept longer and fattening than ever before. The result is a stronger supply of prime beef. The percentage of premium beef rated rose 12% this spring, double the five-year average, according to CoBank, a U.S. agricultural lender.
However, farmers have not fully benefited because demand from restaurants has not fully recovered, and because of the outbreak, U.S. meat exports remain weak.
In July, U.S. chicken exports fell 2.6% from a year earlier, beef exports fell 9%, and pork exports fell 4.8%. The price of some meat products that are more dependent on exports, the price of chicken leg meat, for example, is down 40% from a year ago. This is mainly because some countries, for example, Kazakhstan and Cuba, import less.
The price of major meat products in the United States fell in the week ended Sept. 5 compared with the beginning of the year, according to Nielsen. Among them, beef brisket price down nearly 20%. Falling meat prices are a good thing for consumers, but they may be bad for producers.
Although the U.S. livestock market has generally recovered, total cash receipts to U.S. producers for cattle and calves this year will be $5.1 billion less than last year, or about 8 percent, according to USDA's forecast. There is also growing concern about the bankruptcies of American farmers. About 580 U.S. farmers filed for bankruptcy protection in the 12 months ended June 30, up 8% from a year earlier. The Trump administration on Thursday announced another $13 billion in farmer subsidy program in order to increase support for agriculture.
However, in a previous report, the uneven distribution of subsidies was also a problem. Whether small farmers can fully benefit from these projects remains to be seen. We will keep an eye on this issue.