Beef will be getting even more expensive at U.S. grocery stores in the months ahead, according to one of the country’s biggest meatpackers.
National Beef Co., controlled by the Brazilian giant Marfrig Global Foods, sees relatively stable margins in the next two quarters, according to Tim Klein, who heads Marfrig’s U.S. operations.
That means even though their costs to buy cattle are increasing, the company will ultimately be able to pass that on to consumers in the form of pricier steaks and burgers. “Cattle prices will go up, and beef prices will go up with them,” Klein said during an earnings interview.
The cost of meat has been a focus as consumers grapple with the fastest inflation in four decades. The average price for ground beef in American grocery stores has jumped 18% from a year ago, according to government data. American shoppers may adapt to inflation by switching to less expensive cuts, according to Klein.
Marfrig beat analysts’ estimates for earnings before items and revenue, posting a record for a first quarter. U.S. operations drove the gains, while South America’s unit started a recovery amid booming Chinese demand and improving cattle supply in Brazil, according to Miguel Gularte, who heads operations in the region. Marfrig’s slaughterings in Brazil rose 20% in the quarter, the double compared with the industry average, Gularte said.
Meanwhile, As shoppers pay more for anything from coffee to ketchup, some retailers have started to cut or cap the price of hundreds of products as they compete for customers and set themselves up to do battle in negotiations with major packaged food makers.
Eurostat said on Friday that eurozone inflation for food, alcohol, and tobacco rose by 6.4% in April versus last year, compared with a 5% increase in March, as the rising cost of living in Europe extends beyond expensive energy.
The head of Leclerc, France’s biggest retailer by market share, on Tuesday said it would identify the 120 items consumers buy most, including toilet paper, soap, rice, and pasta, and create a “shield” whereby Leclerc will guarantee the price of those items from May 4 until July.
Price increases have been anywhere between 6% and 20%. Pasta, for instance, has increased by 20%, as have some brands of coffee and chocolate, Michel-Edouard Leclerc said in an interview with French radio broadcaster franceinfo.
In March, European governments, some facing elections this year, spent tens of billions of euros to shelter households from energy costs. There is little sign they will offer similar help with food bills, which are a smaller part of domestic expenditure, but politicians are nervous as household incomes are squeezed and consumer groups have warned the poorest are having to choose between heating their homes and eating properly.
