Surging meat prices coming to a store near you

Apr. 22, 2020 3:18 PM ETTyson Foods, Inc. (TSN)TSN, JBL, HRLBy: Stephen Alpher, SA News Editor288 Comments
  • The closings of the nation's meat processors are picking up steam, with Tyson's (NYSE:TSN) Waterloo, Iowa plant this morning being the latest. The situation has gotten so dire in Iowa that the National Guard has been activated to protect supplies.
  • "There is simply no spot pork available," says Dennis Smith with Archer Financial Services. "Meat shortages will be occurring two weeks from now in the retail outlets." But what about cold-storage? It's just not a lot, says market consultant Bob Brown - "Roughly a week's worth of production in the freezer."
  • It's led to some weird action, with prices for hogs headed sharply lower, but prices for pork belly (used to make bacon) doubling in the last four days. That means soaring margins for slaughterhouses, with one outfit figuring pork margins as up 340% since the start of the month.
  • If the prices for live hogs go low enough (and enough plants close that there's nowhere to send them), consider the prospect of mass euthanasia for parts of the country's hog herd, while the costs for pork at the nation's grocery stores goes through the roof.
  • See also: Hormel plant to halt production (April 22)
  • Other tickers of interest: JBL, HRL
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