Restaurant closures and shifting consumer eating habits during the pandemic could cause turbulence in the meat industry.
Food service has traditionally accounted for 55 to 60 percent of meat demand, but people are cooking at home more due to the pandemic. Though demand remains strong, "long-term concerns of how consumers will react to limited options will continue to add uncertainty to beef, pork and poultry prices and have a significant impact on livestock markets and producers during the upcoming year," Rick Kment reports for DTN/The Progressive Farmer. "Even though strong retail demand is expected to continue over the coming months, the transition back to 'normal' lives is expected to add even more uncertainty to the meat complex, but also could cause long-term market disruptions for years to come."
The meat industry has been able to bounce back from early pandemic levels over the past few months, but "concerns about the strength of demand through 2021 continue to grow," Kment reports. "The health and stability of the food-service industry is expected to have an even bigger impact on overall meat demand during 2021."
As of Dec. 1, 17% of restaurants — more than 110,000 establishments — have closed permanently or long-term during the pandemic, according to a National Restaurant Association study. Most were "well-established," averaging 16 years in operation, Kment reports. Another NRA study in early December found that total food and drink sales fell $2 billion in November, down nearly $12 billion from pre-pandemic levels. In the same survey, 83% of restaurateurs said they expect sales to decline more.