Production of meat was taken aback by the health crisis. But as it is picking up again, a news report shows that the beef producers are more at an advantage, with the demand for chicken still low.
The pandemic previously affected meat production, but it is recovering, according to Bloomberg. However, there is still a lower demand compared to supplies due to the slow rise in sales from food services. With this, Bloomberg noted that beef, which found footing in this health crisis, could match chicken in terms of retail store sales.
Low Demand for Chicken Meat
Moreover, it is also reported that chicken suppliers in both US and Brazil had to deal with oversupply with still lower demand. In turn, prices for chicken are dropping, Bloomberg reports.
One of the largest chicken producers in the US even previously said that production coming to the fourth quarter could likely be 5 percent lower than the year before. Sanderson Farms chief exec project that despite the holidays, there is an estimated lower demand in their company’s products.
Even Brazil, Bloomberg said, is also seeing weak chicken demand, both in local sales and exports. The country’s traditional buyers like the UAE are reported to have lowered down the import of chicken this year. Thus Brazil’s price for chicken export also fell.
While there are recent attempts to reopen the economy, chicken suppliers still see lower restaurant sales. Analysts say that scaling down production could potentially raise chicken prices and defend margin.
Beefing up Beef Sales
Bloomberg further suggests that beef producers are now even doing better compared to those chicken suppliers. The publication notes that there is a higher demand for beef, thus higher prices. That is the opposite of what chicken producers are currently facing.
In addition, a Bank of America analyst, Peter Garbo, projected that: “we are going to have this flood of red meat coming into the market.” He pointed out that there could be a significant climb in beef sales in the fall, according to the Bloomberg article.