A summer of draughts has caused supply chain struggles for one of America’s most lucrative industries.
Unless you spent your whole summer in a cool, crisp, 72 degree underground bunker, you probably noticed that this summer was exceptionally hot. Perhaps you spent the last three months only walking your dog early in the morning and after sundown, or you watched your front lawn turn into a lifeless graveyard of dry shrubs. Many of us had to make adjustments to our lives thanks to strains on water supplies and oppressively hot temperatures.
Sadly, summer droughts have become the norm over the last few years, especially in the American Southwest. And looking toward the future, the state of the atmosphere all but guarantees more hot, dry summers ahead. Climate and weather disasters also come with a major cost — in 2021, they cost the U.S. $145B.
Several industries across the globe are already seeing huge disruptions in their business thanks to the excessive heat. Electricity bills are set to increase as heat waves push residential users to require more energy to cool their homes. And the means by which we fuel our bodies is getting more expensive, too. Between the weather’s effects on the agriculture industry and the rise of inflation, a trip to the grocery store is hitting pocketbooks harder than ever before.
Livestock & Drought
Gather ye hamburgers while ye may, my friends, because according to Restaurant Dive, beef prices are expected to go up by a whopping 15%. This summer’s record drought caused by extreme heat waves forced most cattle farmers to sell off their herds early for slaughter. In fact, according to the U.S. Department of Agriculture, 60% of the nation’s cattle are affected by drought.
Thanks to this necessary move, cattle count for the next few years will likely be affected. So not only can you expect to see a higher price tag on a small cut of beef, but you may have to wait until as late as 2025 to see the supply improve.
The last three months have seen a substantial drop in the price of beef due to these early herd sales. But according to experts, the time to find filet mignon for a steal at your local grocery store is running out.
It’s A Good Time To Spice Up Your Meat Options
While beef is about to get astoundingly scarce, it’s very likely we’ll see a substantial deflation in the price of poultry. The price of chicken has gone up over the last few years, and saw an increase in value when Continental Grain acquired Sanderson Farms (SAFM) – Get Sanderson Farms Inc. Report for $4.5B. But according to Restaurant Dive’s report, the price of poultry is about to ease up for the everyday shopper.
For meat alternative companies like Beyond Meat (BYND) – Get Beyond Meat Inc. Report and Impossible Foods, this could be a time of growth for shareholders as consumers explore other ways to enjoy a classic hamburger cook-off. The report didn’t include any forecasts for the pork and seafood industries.
As for the realm of fast food, your favorite fast food burger may be in store for a hike in price as well. Meanwhile, chicken-based companies like Raising Canes, Chick-Fil-A, Wing Stop (WING) – Get Wingstop Inc. Report, Popeyes (PLKI) , and more could see a drop in the price of chicken.