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Meat processors edging out farmers, causing inflation in meat prices

Farmers are upset over rising beef prices, saying while we’re paying more for beef and other meats at the grocery store, they're not seeing any of that extra money.

ARKANSAS, USA — Across Arkansas and the nation, Americans are seeing a price hike for beef.

Prices are up 5-6% statewide compared to last year, according to University of Arkansas Assistant Professor and Extension Economist, James Mitchell.

"One of the biggest issues that we've been working on is some of the labor issues, labor availability, quality of labor," Mitchell said. 

The issue doesn’t stem from farmers, but the meat processors. It's a supply and demand issue with the processors not being able to fulfill the demand.

Mitchell says it's because of the coronavirus pandemic and while meat processors like Tyson, JBS, National Beef and Cargill are increasing prices at the store, farmers aren’t getting any of that extra cash.

"Steaks are bringing anywhere from $12 to $20 a pound,” said Ben Anderson, a fifth-generation rancher in Northwest Arkansas. 

Anderson says his family has owned cattle since the 1850s. 

“Ground beef is brought $3 to $7 a pound," he said. "When we sell our local beef, we get about $5 a pound and that's for steaks and ground beef."

He says seeing manufacturing companies get more profits while farmers see none of the benefits is upsetting.

"It's kind of a little disheartening,” Anderson said. “You put your blood, sweat and tears, all your time into this and you're not seeing much growth."

However, he says he's seeing continual price increases for tractors and the cost of feed for cows is doubling while the price of his cattle is remaining flat.

"It's made it very hard and you have to be more of a money manager," Anderson said.

Economists say farmers won't see an increase in prices for their cattle anytime soon. While people are demanding beef at stores, the meat processors don't have a high demand for beef from farmers because of the lack of manpower.

"It really put a ceiling on what cattle prices have been able to do,” Mitchell said. “So, we haven't enjoyed the same increase in cattle prices that we've seen in the retail side."

Price increases on the retail side are expected to last until at least 2022.

In the Midwest, they are seeing an even higher price hike on meat, about a 15.5% increase over last year.

The reason Arkansas hasn't seen an increase that high is because we’re starting to see an increase in supply on the meat processors end, according to Mitchell.

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