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Beef Prices Skyrocket. Something Smells Rotten in the State of Emergency

Unprecedented price hiking has become one of the many faces of the current COVID-19 pandemic. In recent weeks the cost of beef has risen for us here at Celebrity Delly at an alarming rate. From our original $2.66/lb to $8.32/lb! That is close to a four-fold increase to our costs! This is in light of the COVID-19 crisis which is now being defined by rising costs across the board. In the beginning, chicken wings were the first to skyrocket among other items. At this time we are finding it more and more difficult to procure some of our staples for our menu as many factories, farms, and facilities have been forced to shut their doors.

Concerns of the Coronavirus has stopped many factories from collecting chicken livers for chopped liver, wings from chickens, even whitefish from whitefish salad. These jobs actually rely on individuals hand picking many of these items. Working in close proximity to others has prompted many companies to halt all manufacturing of these items and more outside of the items we purchase. While this is a responsible way to proceed as we all try to avoid spreading the virus, the bottom line becomes clear...many of our staples will not be able to be on our menu in the coming weeks as these company's overstock is becoming depleted.

But more recently, the rise in the price of beef has many skeptical. As of 3 days ago the Agriculture Department and prosecutors are investigating whether the meatpacking industry is fixing or manipulating prices. The Department of Justice is looking at the four largest U.S. meatpackers — Tyson Foods, JBS, National Beef and Cargill — which collectively control about 85 percent of the U.S. market for the slaughter and packaging of beef, according to a sources with knowledge of the probe. The USDA is also investigating the beef price fluctuations.

Meatpackers say beef prices have spiked during the pandemic because plants are running at lower capacity as workers fall ill, so less meat is making its way to shelves. But at the same time, the companies that process the meat for sale are paying farmers and ranchers staggeringly low prices for cattle. All the while, the coronavirus crisis is highlighting how the American system of getting meat to the table favors a handful of giant companies despite a century of government efforts to decentralize it. And it’s sparking new calls for changes in meatpacking.

Exactly 100 years ago, after years of litigation, the five biggest U.S. meatpackers — which were responsible for 82 percent of the beef market — agreed to an antitrust settlement with the Justice Department that helped break their control over the industry.

The Justice Department’s efforts to reduce concentration in meatpacking led to decades of competition. By 1980, the top four firms controlled only 36 percent of cattle slaughters in the U.S., according to a report by the Government Accountability Office.

But during the next 10 years, meatpacking experienced a huge wave of deals, enough that the USDA dubbed the time “merger mania.” By 1988, the new four biggest companies again controlled 70 percent of the beef meatpacking market.

The bottom line is similar to the old adage of Winston Churchill, "Never let a good crisis go to waste". It seems as though meatpackers may have taken this quote to heart.

Over the past several months, we at Celebrity Delly have tried -at our own expense- to try and lessen the blow by these rising costs and avoid raising prices to you, the consumer. But as there seems to be no end in sight during the coming summer months, we must raise some of our beef items prices to offset these rising costs.

We ask you to bear with us until we can find a suitable alternative. As it seems, more and more large companies try and take advantage of the public during these stressful times, however we can assure you that in no way will we be keeping these higher prices any longer than we must and will lower them as soon as beef costs lower, or a suitable alternative can be found that stands up to our test of quality. In times like these, transparency is what is needed and we hope you can continue to trust we would never take advantage of you.

Original basis for this article can be found at Politico.

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