Wendy's warns of menu changes because of beef supply challenges
Some major supermarkets are rationing beef and pork products too.
With beef and pork production plummeting the past few weeks -- down an unprecedented 35% since this time last year -- and major supermarket chains rationing the sale of meat products, fast-food restaurant chain Wendy's is alerting customers that some of its menu items "may be in short supply from time to time" at some of its eateries amid a growing food shortage and COVID-19 outbreaks in meat processing plants across the U.S.
"As you’ve likely heard, beef suppliers across North America are currently facing production challenges. ... We continue to supply hamburgers to all of our restaurants, with deliveries two or three times a week. We’re working diligently to minimize the impact to our customers and restaurants, and continue to work with our supplier partners to monitor this closely," Wendy's said in a statement Tuesday.
The menu modifications at Wendy's comes amid sobering figures released by the USDA Monday, which shed light on how meat-processing workers falling ill and the plant closures that came as a result -- not to mention restaurant and school closures -- had affected the production of meat. There are more than 100 plants shuttered in 19 states.
In just the last week, pork production plummeted 22% and beef production plummeted 9%.
Jayson Lusk, head of the department of agricultural economics at Purdue University, said it was basic economics: there's a scarcity of meat and reduced supply means rising prices.
"Across the board, the one thing that we know is almost certain to happen is meat prices are going to be rising over the next few weeks. We've seen at the wholesale level, so at the consumer level we can expect that to happen. Whether there is limited availability is going to depend a lot on where you live, on the retailers that you shop at and their relationships with their suppliers. And that's very difficult to predict from moment to moment," Lusk told ABC News on Tuesday.
Nationwide, production of beef and pork is down at least 35%. Meanwhile, wholesale meat prices have skyrocketed, up 60%, according to Lusk, and U.S. demand for meat is up an estimated 40%.
So far, supermarket giants have shielded consumers from the price hikes but Lusk said that was not likely to last and by the end of this week or next, consumers would likely start to see the prices of meat staples rise.
"I think we're starting to see it right now. ... Grocery stores will try to buffer some of those price increases because they don't want to lose customers. They don't want their customers upset, but they also can't lose money either," he said. "I think we can expect some price increases."
Recently, some major supermarket chains announced that they would be temporarily rationing the sale of meats. In a statement, Kroger said that it had added purchase limits "only on ground beef and fresh pork."
"At Kroger, we feel good about our ability to maintain a broad assortment of meat and seafood for our customers because we purchase protein from a diverse network of suppliers. There is plenty of protein in the supply chain; however, some processors are experiencing challenges," said Kristal Howard of the Kroger Co.
Costco said that as of Monday, fresh meat purchases were temporarily limited to a total of three items per member among the beef, pork and poultry products.
"Costco has implemented limits on certain items to help ensure more members are able to purchase merchandise they want and need. Our buyers and suppliers are working hard to provide essential, high demand merchandise as well as everyday favorites," it said on its website.
On Tuesday, Hy-Vee also announced that it would limit meat purchases at its locations starting Wednesday.
"Each customer will be limited to four packages of a combination of fresh beef, ground beef, pork and chicken when they checkout at all Hy-Vee locations," its statement said.
From March 2019 to March 2020, overall meat prices for consumers are 3.3% higher. Beef and veal prices are up 3.8% from March 2019 to March 2020 and pork is up 3.5%. Poultry is more than 2% more expensive than last year and dairy products are up almost 4%, according to the USDA Economic Research Service. Eggs have also seen the highest price increase of 3.2% and are forecast to go up to 6% to 7% higher than average by the end of the year.
The most recent Consumer Price Index for food found overall food prices decreased slightly between February and March of this year but are up almost 2% from this time last year.
"With the recent outbreak of coronavirus in the United States, many new and rapidly changing factors could influence food prices over the rest of the year. The effects of the coronavirus outbreak on food prices will likely be different for food at home and food away from home. Grocery stores are experiencing increased demand, while restaurant demand is decreasing. Even within retail stores, consumer buying patterns change weekly and some categories of products have supply chains with disruptions and new challenges," the USDA’s economic research service said Monday.
The agency hasn’t released data for April food prices yet. Those numbers will be out May 22.
This report was featured in the Wednesday, May 6, 2020, episode of “Start Here,” ABC News’ daily news podcast.
"Start Here" offers a straightforward look at the day's top stories in 20 minutes. Listen for free every weekday on Apple Podcasts, Google Podcasts, Spotify, the ABC News app or wherever you get your podcasts.
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