By Daniel Rosacci, CEO / President, Tony’s Meats & Market
If you look around your local grocery store, you may see empty meat cases, limits on meat purchases, high prices continuing to rise, and the news stories are all over the board(many of which are inaccurate, as I see it). I wanted to communicate directly with our customers as to what I see happening in the meat industry from an insider’s perspective. I will attempt to explain the situation, but please note, some of this is my own interpretation and opinion, and we all have learned in the past few months that no one can truly predict what is coming next.
We recently looked at our wholesale pricing and compared January 2020 to May 2020 and here’s what we saw: Chuck, Round, Knuckles, Brisket, Flanks, etc. (in the meat industry, these are known as “end meats”) seem to be hit the hardest. We are seeing 145% – 180% price increases on these incoming wholesale items. This pricing increase mostly affects your roast and ground beef prices as this is the product that we use to make our premium ground meats. Steak Primals, like NY Strip, Ribeye, Top Sirloin, Short Loins (T-Bones), and Tenderloin (“middle meats”) are up by 100%-120% in wholesale pricing.
Mainly, beef production is down. Some packing houses have been forced to close (temporarily) due to Covid-19. Those that have stayed open have new safety protocols & regulations in place to allow for social distancing, but at the cost of the production we are all used to. The closure of restaurants, schools, and other food service organizations have created a product-line interruption as well.
There is ample supply of beef in America still grazing the fields and the feed lots, so I am not worried about our nation’s beef inventory. Due to the reasons above, the beef is just not being processed as fast as usual. On an average, the U.S. processes about 553,000 cattle per week. Three weeks ago, these numbers dropped below 400,000. Since then, we have had three weeks in a row of increased numbers. It is improving each week. A few more weeks at this healthy & increased pace, coupled with restaurants re-opening (we all hope), and we should start seeing production levels back to normal and pricing softening. I am optimistic that in June we will all see some relief.
However, I would not expect beef pricing to be as low as it has been in the past few years, at least not for the next few months. Feed lots and ranchers are (temporarily) investing more in feed and care for these animals as cattle are currently being held longer. Packing houses now have new challenges to face: social distancing their employees, increased costs in disinfecting (although, I have ALWAYS been most impressed with the safety and cleanliness of the packing houses we use), increased labor, remodeling & redesigning production and storage, and even redesigning employee break rooms for safety. This, and more, has and will add costs to the production side of this business for the immediate future. These are just facts.
Your steaks may be larger
With beef being held in the fields for longer, eating and gaining weight, I expect to see larger cattle. Larger cattle equates to larger meat cuts for a while, with the same GREAT quality you have come to trust at Tony’s. Again, this should be short-term and settle quickly hopefully.
As I mentioned above, we will continue to provide you with only the highest quality meat. For 42 years, we have developed close relationships with our network of quality ranchers and suppliers, and that has not changed. If anything, the extra feed the cattle is consuming now should result in some exceptionally well-marbled meats soon. A silver-lining, I suppose.
Both now, and in the future, you must know that Tony’s will NEVER lower our quality simply to fill our cases. We would rather run out of few cuts than to ever lower our quality standards or shorten our aging times.
Poultry remains a great value
Poultry pricing remains steady. Small hits have occurred, but it appears most poultry houses are back open and close to full production again. In addition, chickens are amazingly fast to grow. A fully mature bird typically takes only 6-8 weeks from the egg to your table. I do not see any major problems with chicken this summer. Market prices always fluctuate throughout the Summer, but I do not expect any crazy price increases.
Late Summer is usually when poultry pricing increases the most. This has nothing to do with Covid-19, rather due to hot Summer temperatures. Extreme heat can take its toll on the flocks. For this reason, Tony’s only buys high-quality chicken breeds that are raised hormone, antibiotic, & cage free in a temperature-controlled chicken house. These houses remain cooler in the Summer months and warmer in the Winters, which I feel is by-far the most humane way to raise chickens.
Pork also remains a great value
Like chickens, the pork industry has taken some recent hits, but it recovers quickly. Yes, some wholesale pork prices have almost doubled, but the difference here compared to beef is the original price of pork is still just a fraction of the cost of beef. Most high-quality pork cuts remain under $7 – $8/lb. Again, we will not sacrifice quality in tight market conditions. We can buy cheaper pork, but we remain loyal to our smaller American farmers and suppliers. We are committed to our customers and committed to sticking with the high-quality heritage breeds of Berkshire and Duroc. These breeds offer HUGE differences in quality from your typical “commodity” grocery store pork.
Other great opportunities
Our meat, seafood, and produce buyer, Stefan Kosmicki, has been in high-stress mode for months now, but he is making some great buys as we speak. Norwegian and Alaskan Salmon, Mexican Shrimp (the world’s finest), and new recipes of prepared grill-ready meats are being developed and will roll out soon, just to name a few of our high-value offerings.
In this unsettling & upsetting time that America is experiencing, we know that we are all in this together and our hearts & minds are with our fellow Americans. We remain incredibly grateful that we can continue to operate, keep our team fully employed, support small & large farms, suppliers, and truckers. We’re also grateful that we can continue to bring you, our customers, a sense of “normalcy,” great food, ease of cooking, and all-important family and friend time. On your next visit and while you’re preparing to feed your families, you can count on the fact that you will see any number of our 200 finest team members, we are so proud of and fortunate to have, happy and ready to serve you.
We are very optimistic about the stability of our meat supplies. Hang in there with us as we do see all the indicators of this settling down soon. We wish only the best for our customers and their families. We will continue to work very hard to bring you the highest quality meats and attempt to absorb as much of these temporary pricing hiccups as we possibly can. We wish you a healthy and wonderful summer, even with these extraordinary times.
Please reach out to Jessica Wolford at Jessica@TonysMarket.com if you would like more information or simply have a comment or question for myself or Stefan. The Tony’s family is here for you and we are all in this together.
Tony’s Culture is: Grit, Integrity, Own Your Actions, Situationally Aware, Hustle, Intention, Kindness