Where Is the Beef Wendy?
Back in 1984, Wendy's had a famous marketing slogan - "Where's the Beef?" Today decades later, we are asking the same question. In some locations, Wendy's has stopped serving beef products. As I have said all along, COVID-19 has literally touched every facet of life - including the beef industry. Back in March, President Trump declared that any company that affects the food chain is considered essential. It is unknown if meatpacking plants are such that they can't practice social distancing. As a result, there is a shortage of beef in the market due to breakouts of COVID 19 in these facilities. The number of cases is so bad that they have had to shut down numerous plants. The best-case scenario is that many have stayed open with fewer workers. John Tyson, CEO of Tyson's Foods, warned this would happen. He took out a full-page ad in many of the major newspaper publications in late April, stating, "the food supply chain is breaking." He warned, "there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed." To make things worst, we are sharing are supply with countries like China. Due to the phase one trade agreement signed in December 2019, China agreed to step up its purchases of U.S. farm goods by at least $12.5 billion in 2020 and $19.5 billion in 2021, over the 2017 level of $24 billion. That is a product that a healthy food chain could typically handle. Now that we have these challenges, we are sharing that supply. This illustrates how bad the collateral damage is of a pandemic. You can add this to a long list of problems caused by the virus. The bigger overall problem is that it is just another shortage that delivers an additional blow to the confidence of the consumer and global level of fear. Of course, with limited supply comes price increases. It is predicted that the prices of beef could rise as much as 30%.